amavat® Service Information | Distance Selling Regulations
20 September 2019
20 September 2019
It means sales that are purchased not face-to-face, but typically traded online via online mail order services. As you might know, ‘VAT Registrations’ are essential either when you set-up a business, or even store your goods in a European warehouse and, which is frequently overlooked, when you reach the ‘Annual Threshold Limit‘ of an EU country.
VAT duties are initiated by ‘Distance Selling’. Every EU Member State has its own ‘Distance Selling Threshold’ and once this limit is achieved within a calendar year, the seller has to get an additional VAT number in the country of import.
Due to the fact that VAT is a tax which has to be paid by the final consumer, EU countries will expect e-Commerce businesses to register with them, so that they are able to make these businesses pay the local VAT.
Please bear in mind: For electronic or digital services to consumers there are no ‘Distance Selling Thresholds’.
The key reason behind these “VAT Registration Thresholds” was to lessen the administrative spending for companies and to inspire them to develop and to expand to other EU countries.
|VAT treshold limits:|
|Austria||35,000 €||Italy||35,000 €|
|Belgium||35,000 €||Latvia||35,000 €|
|Bulgaria||70,000 BGN||Lithuania||35,000 €|
|Croatia||270,000 HRK||Luxembourg||100,000 €|
|Cyprus||35,000 €||Malta||35,000 €|
|Czech Republic||1,140,000 CZK||Netherlands||100,000 €|
|Denmark||280,000 DKK||Poland||160,000 PLN|
|Estonia||35,000 €||Portugal||35,000 €|
|Finland||35,000 €||Romania||118,000 RON|
|France||35,000 €||Slovakia||35,000 €|
|Germany||100,000 €||Slovenia||35,000 €|
|Greece||35,000 €||Spain||35,000 €|
|Hungary||8,800,000 HUF||Sweden||320,000 SEK|
|Ireland||35,000 €||United Kingdom||70,000 £|
There are many rules and guidelines for ‘Distance Selling’ in Europe. It is very important that you know, so that you on the safe side when it comes to taxation and VAT. The ‘Distance Selling’ Regulations (DSRs) relate to all distance sales. The purpose of the DSRs is to safeguard of the consumers throughout the EU sector.
Below is a brief list of regulations that relate to ‘Distance Selling’ and what you as the seller are necessary to provide to the customer:
Online sellers must comply with the Consumers Right Act 2015. When receiving consumer’s personal information, you must also comply with the Data Protection Act 1998.
The exception for B2C is not exceeding the €10,000.00 in cross-border sales within one calendar year, this means that the local VAT rate (the VAT rate of your home country) applies for those sales.
When you exceed the limit, then the VAT rate of the country of import will be charged. So before you achieve the ‘Annual Threshold Limit’ which makes a further ‘VAT Registration’ compulsory, there is also a limit that changes which VAT rate applies.
Briefly speaking, when it comes to B2B sales via ‘Distance Selling’, the VAT rate of the country of import applies.
You can find out more by clicking below via this link to the European Commission explaining the ‘Distance Selling Directive’.
amavat® help businesses throughout Europe with their cross-border trade by taking over the complexities of managing VAT and other indirect tax obligations. We ensure that our clients meet their compliance obligations around the EU and beyond. amavat® specialises in providing clients with bespoke VAT reviews that help them develop into new territories, with the appropriate controls in place to manage VAT effectively. We are continually developing our expertise in international VAT, whether you are an established company or an entrepreneurial online seller, amavat® will provide cross-border supply advice, while giving practical solutions.
Our VAT Compliance experts are here to help bring your EU online business dreams to life.
If you have any further questions, please do not hesitate to contact us.
The information contained above is of a general nature and does not concern the situation of a specific company. Due to the speed of changes occurring in EU legislation, we kindly ask you to determine, on the date of this information, whether it is still up to date.