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Top Tips on Cross Border VAT Compliance in the EU

cross-border e commerce vat

Top Tips on Cross Border VAT Compliance in the EU

Partner Article by SimplyVAT

Are you an online seller looking to expand your business online?


Ecommerce is a booming sector, and with around 742 million people in Europe alone, online sellers have huge potential to grow their business throughout lucrative markets.

So, why aren’t more eCommerce sellers cashing in?
One of the most common problems facing sellers who are looking to expand cross borders is the confusion around VAT and staying on the right side of it. It’s more complex as it varies from each member state and it depends what you are selling and who you are selling too!
According to Ecommerce News EU, there are over 800,000 online stores in Europe. With year on year growth expected in eCommerce sales in Europe, the number of online sellers is increasing. So why not be part of it? To help we’ve created some top tips to navigate the complexities of VAT across Europe.
As a small or medium business, it may appeal to you using a marketplace such as eBay or Amazon or perhaps having ownership of your own website. Not sure which route to go down?
Either way you need to consider the rules and regulations of selling across a border otherwise you could face hefty fines. Ignoring VAT is not an option.

#1 –Find out whether you’re liable for the VAT

This is not a clear-cut answer, as it all depends on several factors such as who, what and where you are selling to.
As an eCommerce seller you need to ask yourself the following to better understand your VAT position.
– Are you based inside or outside the EU?
– Are you selling to businesses or customers?
– What is it that you’re selling; goods or services?
– Where are the customers you’re selling to; inside or outside the EU?
Either way the EU VAT distance selling rules will still apply to you. Please note there are some exceptions for excise products. For further information, head to the European Commission or Web Retailer.

#2 – Keep up to date with your thresholds

If you’re an EU-based business selling goods to consumers in EU member states, you need to consider if the total of your annual sales (including postage) and whether this falls below the threshold set for the respective country. If they are under you are not obliged to register for VAT.
However, the thresholds vary throughout the different EU member states. Furthermore, they can be relatively easy to hit, as in the case of Poland where it’s €35,000 and on the other end of the scale you have a big margin of €100,000 in Germany.
If you are selling in multiple countries it might be worth investing in a software that monitors your threshold level. The other negative to not registering, is that your sellers may become liable, resulting in bad customer feedback. For the full list of thresholds, please see or if you need a free VAT check to understand your position.
how long to get vat registered

#3 – Storing goods in another European country

If you choose to use a fulfilment centre in the EU to sell to private consumers and businesses, you must VAT register in that country regardless of whether it is done through a marketplace such as Amazon.
For example, if you use Amazons Pan EU programme, where goods could be stored in up to Seven EU countries, you would automatically need to VAT register in seven different countries.
Failure to do so could result in penalties, hefty backdated payments and if you use an online marketplace your account could be shut down.
In a recent report by Tamebay, the European Commission has proposed new standards on transparency and fairness for online platforms in a bid to help small and medium businesses.
So if your account is suspended, the rules would require the marketplace to provide ‘a statement of reasons’.

#4 – Keep track of your sales and invoices

Make sure you have systems in place to track the sales information including which country your consumers are in. If you’re struggling, benefit from the advance of technology, there are some great software options, which can do this for you.
In order to make your selling process seamless, investing in some technology can really help you to stay on top of your shipping, sales and invoices.

#5 –All 28 European countries have VAT, but as well as each country applying its own VAT rate, you may come across different names for VAT. For example:

TVA – France
IVA – Spain
MWST – Germany
VAT rates for all EU countriesMake sure you are to speed with member states’ language and if need be, utilise an expert who knows the ins and outs of VAT.

#6– Know which VAT rates apply to your goods and services.

In the EU the classification system can vary from country to country. Similar to the thresholds, rates of VAT can vary from 17% to 27%, so you need to ensure you are charging the correct amount of VAT to ensure that you don’t loose any of your hard-earned profits. For a full list click here.

#7 – How long will it take to be VAT registered?

You will need to allow anything from 3-10 weeks to obtain a VAT registration, though timings of course differ dependant on which country you have registered in. In order to be safe allow the maximum.

#8 – Once VAT registered, ensure you are filing correctly to meet the deadlines and frequencies of the member state.

This can be monthly, bi-monthly, quarterly, bi-annual and annual. You need to check with each individual member state.

#9 – Ensure you don’t need to comply with these reporting requirements.

If you are using Amazons Pan EU service, you may need to file an EC sales Lists. Another potential requirement is Intrastat Declarations – Find the Intrastat reporting thresholds here.

#10 Digital Goods

This is a whole other minefield when it comes to VAT. VAT MOSS is applicable for sales of digital services in the EU. This includes supplying telecommunications, broadcasting and digital services (such as apps) to consumers. The European Commission has proposed a threshold for Cross Border sales of electronic services which could be introduced as early as this year. This is likely to be €10,000.
For full guidance from HMRC on VAT Mini One Stop Shop (VAT MOSS)cross border vat compliance
At SimplyVAT we have over 20 years in VAT compliance expertise. We aim to be as informative and helpful to assist ecommerce sellers and ensure the headache of international VAT is taken away. If you just want to ask a question, or perhaps let us know a topic you would like us to cover. Drop us an email at [email protected].

Holly Hawes

Brand and Marketing Manager at Through education, support and practical industry knowledge we make cross-border VAT simple.

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