In this way, VAT is only due on the supply to the private individual and no longer because of the import of the goods. You will also receive a special VAT number that can be shown at customs to get exemption on import. In this instance, the tax authorities of your home country ensure that the applicable VAT is remitted to the country or countries in which the VAT should have been paid. However, you may also make use of the one-stop-shop reform which enables you to avoid multiple registrations and declare all EU transactions in one declaration. If you only operate in one or few EU countries aside from your home country, you may opt to register in each country individually. This means that you must also obtain a VAT identification number in every EU country in which you have made a sale. ![]() The major change here is that, regardless of revenue accrued from B2C e-commerce sales within the EU outside of your home country, you are obliged to pay the VAT rate of the EU country of destination (where the goods and/or services have been received). There are no longer thresholds for distance selling. As of July, 1 st, 2021, if the buyer does not file a VAT return, the VAT that is applicable in the buyer's country must be charged.This means that the supplier must register in the EU country of the buyer in order to pay the applicable VAT rate, or utilize the one-stop-shop reform to avoid too many VAT registrations. If you supply goods and/or services to consumers within the EU via an e-commerce website …ġ. When it comes to sending invoices from one EU country to another, different VAT rules apply depending on the situation. Sending an Invoice Within the EU: With or Without VAT? To guide you in the right direction when it comes to international (electronic) invoicing and VAT rate in particular, here’s some useful information that’ll help boost your confidence when it comes time for doing business with countries inside and outside of the European Union (EU). For instance, there has recently been a major VAT change in the e-commerce space that impacts many businesses (more on this below). And in addition to making sure that the correct rules are applied, it’s also very important to keep up with changes in VAT regulations. Mistakes like these can result in too much or too little VAT being paid, and it takes a lot of time to get everything sorted out. Another common mistake is forgetting to include foreign invoices in a VAT return. ![]() One of the most common mistakes is that the full VAT rate from the country of origin is charged on the invoice instead of applying the 0% rate. ![]() All of these VAT rate regulations and exemptions can be very confusing ( even for experienced professionals) and mistakes are often made. The same goes for the specific goods or services that must be taxed, along with the customer types that fall under the VAT obligation (i.e., consumer or business). That’s because most major economies rely on value-added tax (VAT) for charges related to goods and services. When sending invoices to different countries, different tax rules may apply than what you’re used to-especially if you’re used to dealing with sales and use tax in the U.S. One business owner deals with this business practice on a daily basis while another (almost) never has to deal with it: invoicing abroad.
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