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Looking to increase your cross-border sales in quarter 4?

E commerce VAT rules

Looking to increase your cross-border sales in quarter 4?

Partner Article by SimplyVAT

Looking to increase your cross-border sales in quarter 4? Warning! You may need to VAT register in an EU country.

We know quarter 4 is the busiest time of year for most retailers with the run up to Christmas including major shopping days such as Black Friday and Cyber Monday. With sales soaring, it is easy to forget about your VAT obligations however turning a blind eye, may just leave you with fines and penalties.
Here’s our simple guide to what you need to know:

The EU VAT Distance Selling Rules

Did you know any sales you make online to local and other EU private consumers are governed by what’s known as the EU VAT Distance Selling Rules?
The rules state that you charge local VAT until you exceed set thresholds in each EU country.
Once a Distance Selling Threshold is exceeded in any one calendar year, you will need a VAT registration in that EU country.

The current set thresholds are:

• €35,000 (or local currency equivalent) in every EU country, except:
• €100,000 (or equivalent) in Germany, Netherlands and Luxembourg;
• £70,000 in the UK.

The Distance Selling Thresholds and Using Fulfilment Centres in the EU

As a non-locally established company, if you put your stock in a warehouse or fulfilment centre e.g. Parcelhub’s fulfilment centres in the UK, this triggers an immediate need to VAT register – there are no thresholds to exceed.
Once you are selling from a fulfilment centre to private customers in other EU countries, you must monitor your distance sales from each location where your stock is stored. If you sell medium to high value goods, it doesn’t take long to cross over the €35,000 threshold.
This can happen to you!
To put this into perspective, an online seller named Tom came to us in June of this year. He had been holding his stock within the UK and selling to customers in Germany and France through online marketplaces. Tom didn’t know about the rules surrounding distance selling and was approached by the French tax authorities. Once he came to us, we uncovered that he had exceeded the €35,000 threshold in France over two years ago! Tom had to back date his registration in France, pay €25,000 worth of VAT to the French Tax Authorities, and pay a further 10% penalty of the VAT owed.
Unfortunately, ignorance was no defence. It is important to understand all of your obligations when selling internationally to ensure you provide longevity and sustainability for your business.

SimplyVAT can help!

VAT rules for online salesOur market-leading new software can pull data from multiple channels to work out if you’ve exceeded your distance sales thresholds in any EU country. Once we know this, we can help you stay the right side of the local laws, help you avoid penalties and most importantly ensure you keep selling!
Sign up today at:
We are here to help you concentrate on your international expansion plans!
Any questions – Don’t hesitate to ask at [email protected]<

Simon Wright

As SEO and Content Marketing Manager at the Whistl Group, Simon has over 10 years' experience in both B2B and B2C marketing, and as a result, offers a unique perspective on the pre- and post-checkout delivery experiences. Simon writes regularly for both the Parcelhub and Whistl blogs and is passionate about helping retailers make delivery their competitive advantage.

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