VAT Frequently asked questions
Which country do you plan to sell in?
There are country specifics to how VAT works, VAT registration and VAT rates. Tell us more about where you plan to sell so we can help you answer the most common questions that are relevant for your business.
VAT in the EU
What is VAT and how it works?
Customs Duty and Import VAT
VAT in the UK
How UK VAT works?
Businesses established outside EU
Businesses established in an EU country
VAT in Germany
How German VAT works?
Businesses established outside EU
Businesses established in an EU country
VAT in France
How is VAT charged and reimbursed in France?
Businesses established outside EU
Businesses established in an EU country
VAT in Italy
How is VAT charged and reimbursed in Italy?
Businesses established outside EU
Businesses established in an EU country
VAT in Spain
How is VAT charged and reimbursed in Spain?
Businesses established outside EU
Businesses established in an EU country
What is VAT?
VAT is a tax on consumer expenditure. It is collected on business transactions, imports and moving goods between EU countries.
What are the consequences of non-compliance with the obligation to register for Value Added Tax (VAT) in the EU?
All EU member states operate a VAT system. The failure to comply with the VAT registration requirements within the EU has serious consequences:
- Typically you have to pay the VAT which you should have paid to the appropriate (EU) tax authorities, plus interest on the VAT from the date it should have been paid. This is normally from the date you should have obtained a VAT registration number, accounted for VAT on your sales and remitted VAT to the tax authorities (despite not charging VAT on your sales during this time).
- If the tax authorities become aware that you have failed to VAT register when required to do so you will likely have to pay a financial penalty. The amount of the penalty will typically depend on the amount of VAT due and the length of time you failed to meet your registration obligations. Late registration penalties are generally a percentage based on the VAT amount that should have been remitted to the tax authorities. The ways in which penalties are calculated differ by member state. In the UK, for example, penalties are calculated on the basis of the length of time which has passed since you should have first registered for VAT, and range from 5% to 15% of the VAT due.
- In the event that Amazon receives confirmation that you have failed to comply with your obligations to register for VAT we will de-list you from the Amazon website and you will be prevented from re-listing until such time you have demonstrated VAT compliance and this is evidenced by the appropriate tax authorities. For more information click here.
On this website we have provided you with some useful information which may assist you in considering your obligations with regards registration for VAT. However this information is not intended to be a comprehensive guide nor tax advice and if you are unsure of your obligations we recommend that you seek advice from either the applicable tax authority or an independent tax advisor.
How is VAT charged and reimbursed?
In order to charge VAT you must first be registered for VAT and obtain a VAT number.
Once you are VAT registered you are bound by the VAT rules applicable to the country in which you are registered but it normally means that you must charge VAT (where applicable) on your sales and show this VAT on a VAT invoice (please consult your tax advisor for specific advice regarding invoicing requirements).
The amount of VAT due to a local tax authority, i.e. charged to your customers, can be offset by the VAT which is incurred on your business purchases/costs (please consult a tax advisor regarding which costs can be recovered). For example, where you have been charged UK VAT on a purchase, including import VAT, you can offset this VAT against the VAT due on your UK sales on a UK VAT return.
The amount of VAT payable to the tax authority is the net value of your UK output VAT less the amount of UK input VAT which is recoverable.
Please note that you should check VAT reporting and invoicing requirements in each country in which you register. Although these requirements are similar there can be notable differences.
Once you are VAT registered you are bound by the VAT rules applicable to the country in which you are registered but it normally means that you must charge VAT (where applicable) on your sales and show this VAT on a VAT invoice (please consult your tax advisor for specific advice regarding invoicing requirements).
The amount of VAT due to a local tax authority, i.e. charged to your customers, can be offset by the VAT which is incurred on your business purchases/costs (please consult a tax advisor regarding which costs can be recovered). For example, where you have been charged UK VAT on a purchase, including import VAT, you can offset this VAT against the VAT due on your UK sales on a UK VAT return.
The amount of VAT payable to the tax authority is the net value of your UK output VAT less the amount of UK input VAT which is recoverable.
Please note that you should check VAT reporting and invoicing requirements in each country in which you register. Although these requirements are similar there can be notable differences.
What is the level of the VAT rates?
Given that EU law only requires that the standard VAT rate must be at least 15% and the reduced rate at least 5%, actual rates applied vary between EU countries and between certain types of products. In addition, certain EU countries have retained separate rules in specific areas.
The most reliable source of information on current VAT rates for a specified product in a particular EU country is that country's VAT authority. It is possible that you will need a tax advisor to help you in determining the VAT rate to be applied.
The most reliable source of information on current VAT rates for a specified product in a particular EU country is that country's VAT authority. It is possible that you will need a tax advisor to help you in determining the VAT rate to be applied.
How to register for VAT in multiple countries?
If you store, move or sell goods in multiple EU countries you may be required to register for VAT in multiple countries. If this is the case, you could be required to submit VAT returns in more than one country.
The requirements to register for VAT in multiple countries is complex and we recommend that you consult a tax advisor, particularly if you store goods in more than one EU country or make distance sales.
The requirements to register for VAT in multiple countries is complex and we recommend that you consult a tax advisor, particularly if you store goods in more than one EU country or make distance sales.
How to issue an EU VAT invoice?
In many European countries, customers expect a VAT invoice. VAT laws in the country where you ship your goods from and where the customer is located may require you to provide a VAT invoice, and customers' expectations usually go beyond the law. In Germany and Italy, for example, customers often expect an invoice for high-value items.
Generally, how do I go about asking for a VAT number in EU?
When you sell your products in EU, you may need to charge VAT. If so, you will need to request a VAT registration number, file VAT returns, and pay the VAT you collected from your customer to the tax authorities.
In many EU countries, you can register online on the tax authority's website for the country where you want to register. The majority of these websites provide the VAT information in English. The website will usually provide an online form for registering or a PDF form you can download to complete and return by mail. If there is no provision for registering online, you can find out where to go to register for a VAT number. After you have submitted your request for a VAT number, you may also be sent forms to sign and return through regular mail.
Registering for VAT may lead to a number of associated compliance requirements, including the need to file reports and issue VAT invoices.
In many EU countries, you can register online on the tax authority's website for the country where you want to register. The majority of these websites provide the VAT information in English. The website will usually provide an online form for registering or a PDF form you can download to complete and return by mail. If there is no provision for registering online, you can find out where to go to register for a VAT number. After you have submitted your request for a VAT number, you may also be sent forms to sign and return through regular mail.
Registering for VAT may lead to a number of associated compliance requirements, including the need to file reports and issue VAT invoices.
How do I know if I need to pay customs duty and import VAT when importing goods into the EU?
Goods which are imported into the EU from territories outside of the EU are subject to customs duty and import VAT. You can find further information on customs duty and import VAT in these FAQs, and can see an example of the process of importing goods into the UK from India (a non-EU country) here.
These FAQs are intended to give an overview of some of the key obligations when importing goods into the EU. They are not intended to be a comprehensive guide to importing nor tax advice and if you are unsure of your obligations we recommend that you seek advice from either the applicable tax authority or an independent tax advisor.
These FAQs are intended to give an overview of some of the key obligations when importing goods into the EU. They are not intended to be a comprehensive guide to importing nor tax advice and if you are unsure of your obligations we recommend that you seek advice from either the applicable tax authority or an independent tax advisor.
What is Customs Duty?
Customs duty is payable on the import of goods from outside the EU into an EU member state and can range from 0% to 25%. There are different rates of customs duty for products based on different HS commodity codes as well as the origin of the goods. The applicable rate will then apply to the valuation of the goods declared to the customs authorities. This valuation (commonly referred to as the customs value) includes all costs up to the point at which the goods enter into the EU.
To note the EU is a single Customs Union which consists of all the member states of the European Union.
Let’s look at a simple example and assume the duty rate is 5% for an import of goods from the US to the UK:
To note the EU is a single Customs Union which consists of all the member states of the European Union.
Let’s look at a simple example and assume the duty rate is 5% for an import of goods from the US to the UK:
Customs Value (components)
Cost £
Transaction value or costs of goods (where there is no transaction)
US inland transportation fee to US port
100
5
US port handling charges
5
International shipping cost
10
Insurance fee
5
Value declared to UK Customs authorities
125
The customs duty payable in the UK would be £6.25 (5% x (£100 + £5 + £5 + £10 +5).
Customs duty is generally irrecoverable and represents a hard cost.
Customs duty is generally irrecoverable and represents a hard cost.
What is Import VAT?
Import VAT is also payable on the same importation of goods from outside the EU into an EU member state. The rate of VAT due at import will be the same as would apply were the goods supplied within the EU country of import. Import VAT is payable in addition to any customs duty which is due, and is calculated on the customs value of the goods plus customs duty.
So, continuing with our example from above (What is customs duty).
We calculated above that the customs duty would be £6.25.
The import VAT would be 20% (assuming the goods are subject to the UK standard rate of VAT) x (£125 + £6.25) = £26.25.
Import VAT is normally recoverable provided you are registered for VAT in the country where the goods are declared to the customs authorities. This is achieved via your VAT return in accordance with the normal VAT recovery rules in that country.
Under EU rules goods which are imported from outside the EU into an EU member state may be exempted from import VAT where the goods are of a low value. The thresholds under which the goods must fall in order to qualify range from €10 to €22 per commercial good/parcel, depending on the member state into which the goods are being imported. The relevant import value will generally be the transaction value (ie sales price to the customer) plus certain additional cost elements (see example above). Consequently, it is important to note that any such relief does in general not apply to the import of low value goods which have not yet been sold to a customer but are (bulk) imported for subsequent sale to customers in the EU.
In the UK this relief is known as low value consignment relief or ‘LVCR’. If you think you might qualify for this relief we recommend that you consult with either the applicable tax authority or an independent tax advisor to confirm.
So, continuing with our example from above (What is customs duty).
We calculated above that the customs duty would be £6.25.
The import VAT would be 20% (assuming the goods are subject to the UK standard rate of VAT) x (£125 + £6.25) = £26.25.
Import VAT is normally recoverable provided you are registered for VAT in the country where the goods are declared to the customs authorities. This is achieved via your VAT return in accordance with the normal VAT recovery rules in that country.
Under EU rules goods which are imported from outside the EU into an EU member state may be exempted from import VAT where the goods are of a low value. The thresholds under which the goods must fall in order to qualify range from €10 to €22 per commercial good/parcel, depending on the member state into which the goods are being imported. The relevant import value will generally be the transaction value (ie sales price to the customer) plus certain additional cost elements (see example above). Consequently, it is important to note that any such relief does in general not apply to the import of low value goods which have not yet been sold to a customer but are (bulk) imported for subsequent sale to customers in the EU.
In the UK this relief is known as low value consignment relief or ‘LVCR’. If you think you might qualify for this relief we recommend that you consult with either the applicable tax authority or an independent tax advisor to confirm.
What is Excise Duty?
If you make sales of alcoholic beverages, tobacco products or energy products you will need to pay excise duty on these sales (in addition to any customs duty or import VAT due). If you make sales of these type of goods we recommend that you seek advice from either the applicable tax authority or an independent tax advisor.
What is the procedure for importing goods into the EU?
When goods imported from a non EU country arrive at the EU border a declaration must be made to the relevant customs authorities. This declaration is called a ‘Single Administrative Document’ (‘SAD’) / Form C88. Some importers use a third party freight agent to submit the SAD / Form C88 electronically on their behalf. You can find a copy of a SAD / Form C88 here.
The SAD / Form C88 must include information such as:
The SAD / Form C88 must include information such as:
- What the goods are;
- The value of the goods;
- Where the goods are from;
- The consignor (the person from whom the goods are being sent);
- The consignee (the person to whom the goods are being sent);
- The declarant (either the importer or the third party freight agent, if one has been used).
Any customs duty and import VAT will need to be paid outright at the time of importation, unless the importer or the third party freight agent is using an alternative means of payment approved by the tax/customs authorities.
HMRC have published guidance on importing goods into the UK, which is available here.
You can see an example of the process of importing goods into the UK from India (a non-EU country) here.
HMRC have published guidance on importing goods into the UK, which is available here.
You can see an example of the process of importing goods into the UK from India (a non-EU country) here.
How do I issue a UK VAT invoice?
If you are required to issue a UK VAT invoice it must legally hold a minimum level of information. This information, as shown on the HMRC website, is as follows:
- a sequential number based on one or more series which uniquely identifies the document
- the time of the supply (tax point)
- the date of issue of the document (where different to the time of supply)
- your name, address and VAT registration number - you may issue invoices under a trading name, but your legal name and address details must still be shown somewhere on the document
- the name and address of the person (consumer) to whom the goods or services have been supplied
- a description sufficient to identify the goods or services supplied
- for each description, the quantity of the goods or the extent of the services, and the rate of VAT and the amount payable, excluding VAT, expressed in any currency
- the gross total amount payable, excluding VAT, expressed in any currency
- the rate of any cash discount offered
- the total amount of VAT chargeable, expressed in sterling
- the unit price
- the reason for any zero rate or exemption
When do I charge VAT on my invoice to UK consumers?
If you are VAT registered and sell goods in the UK, you will be required to charge UK VAT to your customers. This is referred to as your output VAT.
If you sell to a B2B customer in the UK you will be required to issue a VAT invoice. If you sell to B2C consumers you are not legally obliged to issue a VAT invoice for domestic supplies in the UK but it is common practice to provide one when requested. In case of distance selling to UK B2C consumers (from an inventory in another EU Member State), an VAT invoice is always needed.
The VAT you collect on your sales is declared to HMRC by way of a VAT return, which is normally submitted on a quarterly basis. The amount of VAT due to HMRC can be offset by the VAT you incur on your purchases/costs (i.e. where you have been charged UK VAT, including import VAT). This is referred to as input VAT. The amount of VAT payable to HMRC is the net value of your output VAT less the amount of input VAT which is recoverable.
This is a very general overview and we recommend you consult a tax advisor regarding the preparation and submission of your VAT returns.
If you sell to a B2B customer in the UK you will be required to issue a VAT invoice. If you sell to B2C consumers you are not legally obliged to issue a VAT invoice for domestic supplies in the UK but it is common practice to provide one when requested. In case of distance selling to UK B2C consumers (from an inventory in another EU Member State), an VAT invoice is always needed.
The VAT you collect on your sales is declared to HMRC by way of a VAT return, which is normally submitted on a quarterly basis. The amount of VAT due to HMRC can be offset by the VAT you incur on your purchases/costs (i.e. where you have been charged UK VAT, including import VAT). This is referred to as input VAT. The amount of VAT payable to HMRC is the net value of your output VAT less the amount of input VAT which is recoverable.
This is a very general overview and we recommend you consult a tax advisor regarding the preparation and submission of your VAT returns.
How do I charge VAT on my invoice to Non-UK B2C consumers?
If you make distance sales from an inventory in the UK to B2C consumers in other EU countries (example: sell from UK to another EU country), and do not already have a VAT registration in the ship-to country, you are required to charge UK VAT. In these circumstances you must charge and account for VAT using the same method as for domestic sales (see above section). Please note that you must always issue a UK VAT invoice for distance sales from the UK which are subject to UK VAT.
However, if you exceed the distance selling threshold in another EU country you will be required to register for VAT in that country. This means you should no longer charge UK VAT on these types of sales into that country, instead you should charge the VAT of the ship-to country. For example, if you store goods in the UK and start selling those goods to B2C consumers in France you must charge UK VAT. As soon as it is clear you will exceed the distance selling threshold in France you must submit a French VAT registration application to the French tax authorities and you will be required to charge French VAT on B2C sales to France (i.e. issue French VAT invoices and submit French VAT returns).
Under distance selling, you can also opt to tax your sales in the ship-to country (before you exceed the distance selling threshold). As soon as such option has been made, VAT of the destination country needs to be collected (instead of UK VAT) and that country’s invoice requirements will apply.
If you store goods in the consumer’s EU country prior to the sale this is not considered to be distance selling. For example, if you sell to French consumers and supply those consumers with goods which are already stored in France you will be making a domestic sale in France and will need to consider your VAT registration position in France.
However, if you exceed the distance selling threshold in another EU country you will be required to register for VAT in that country. This means you should no longer charge UK VAT on these types of sales into that country, instead you should charge the VAT of the ship-to country. For example, if you store goods in the UK and start selling those goods to B2C consumers in France you must charge UK VAT. As soon as it is clear you will exceed the distance selling threshold in France you must submit a French VAT registration application to the French tax authorities and you will be required to charge French VAT on B2C sales to France (i.e. issue French VAT invoices and submit French VAT returns).
Under distance selling, you can also opt to tax your sales in the ship-to country (before you exceed the distance selling threshold). As soon as such option has been made, VAT of the destination country needs to be collected (instead of UK VAT) and that country’s invoice requirements will apply.
If you store goods in the consumer’s EU country prior to the sale this is not considered to be distance selling. For example, if you sell to French consumers and supply those consumers with goods which are already stored in France you will be making a domestic sale in France and will need to consider your VAT registration position in France.
How do I charge VAT on my invoice to Non-UK B2B consumers in other EU member states?
If you sell to B2B customers in another EU country you are not required to charge VAT if a number of conditions are met. In the UK these conditions, as set out on the HMRC website, are as follows:
- a supply from the UK to a customer in another EU country is liable to the zero rate where:
- you obtain and show on your VAT sales invoice your customers’ EU VAT registration number, including the 2-letter country prefix code, and
- the goods are sent or transported out of the UK to a destination in another EU country, and
- you obtain and keep valid commercial evidence that the goods have been removed from the UK within the time limits set by HMRC
There are a number of other conditions which must be met, for example, additional specific invoicing requirements, and therefore we recommend you consult a tax advisor prior to making sales to B2B customers in another EU country.
There is also a requirement to submit further supporting documents such as an EC Sales List (periodic report to be submitted to HMRC, listing total EU cross border sales from the UK to VAT registered customers in other EU country).
There is also a requirement to submit further supporting documents such as an EC Sales List (periodic report to be submitted to HMRC, listing total EU cross border sales from the UK to VAT registered customers in other EU country).
What is the process for claiming UK VAT back?
Once you are VAT registered, if you incur UK VAT which relates to your business activities you can recover this VAT by way of your VAT return, i.e. the VAT incurred on your purchases/costs can be offset against the VAT due on your sales. VAT incurred on costs is called input VAT. It is possible to recover input VAT outside of the UK VAT return process if you do not have a place of business in the UK and are not required to be registered in the UK. If this applies to you we recommend that you consult a tax advisor for more details on the formalities to be fulfilled.
What is the level of the VAT rates?
If you sell goods in the UK the VAT rate applicable can vary depending on the type of goods you sell. At present, the VAT rates applicable are either 20%, 5% or 0%. It is worth noting that the vast majority of goods sold in the UK are subject to the 20% rate - please consult your tax advisor if you are uncertain on which VAT rate(s) to apply on your products.
I sell products into an EU country from outside EU (I don’t have a business establishment in EU) and I do not store goods in EU). Do I need to register for VAT?
If you import goods into the EU for onward sale you will generally be required to pay import VAT (and possibly import duty) to the tax authority where the goods are imported. Please note you will be required to register for VAT if you store goods in an EU country. There are many ways to structure and pay import VAT, if you require more detailed advice we recommend you consult with a tax advisor with experience of UK VAT.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
Although my company is located outside EU, for my business operations I store goods in UK and only sell to UK based customers. Do I need to register for VAT in UK?
If you store goods in the UK, sell and move these goods to the UK based customers, you are required to VAT register in UK immediately (from the moment the goods enter the UK). Please note that an overseas (non EU) business may also be required to appoint a UK tax representative. Similarly, if you store goods in any other EU country you will be required to VAT register in that country as well.
Although my company is located outside EU, I store goods in UK and sell to non-UK based customers. Do I need to register for VAT in UK?
If you store goods in the UK, sell and move these goods to the UK based customers, you are required to VAT register immediately. This is because the UK domestic VAT registration threshold only applies to persons that have a place of business in the UK. Please note that an overseas (non-EU) business may also be required to appoint a UK tax representative. Additionally, if you store goods in the UK, sell and move these goods to private individuals in other EU countries (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
I sell products from an EU country into another EU country. Where do I need to register for VAT?
When selling products from one EU country into another EU country, you should be aware that the tax rate can be different from country to country. If you store your goods in an EU country you are required to VAT register in that EU Country once your sales exceed the VAT registration threshold, if any. Additionally if you transfer your own goods from one EU Country to another, or if FBA transfers your goods from a fulfilment center into another country where your products will be stored, the transfer may also be treated as a transaction subject to VAT. You are responsible for meeting any VAT obligations that apply, including VAT obligations in the Amazon marketplace website locations, the countries from which you are delivering your products, the countries to which you are delivering or shipping your products, or any other countries (e.g. country of importation in case you import products from non EU). Please also refer to the distance selling section above.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
My business address is in UK and I sell goods to UK based customers. Do I need to register for VAT in UK?
If you store goods in the UK and only sell those goods to UK based customers you are required to VAT register once your sales exceed the UK VAT registration threshold.
If additionally you sell and move these goods to consumers in another EU country (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
If additionally you sell and move these goods to consumers in another EU country (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
My business address is in another EU country but I sell goods to UK based customers. Do I need to register for VAT?
If you store goods in another EU country, sell and move these goods to private individuals based in the UK you will be required to VAT register in the UK if you exceed the UK distance selling threshold. Also in case you store goods in another EU country and move your own goods to a storage location in the UK (either by your own means or by way of Amazon) there may be a requirement to register for VAT in the UK.
How do I issue a German VAT compliant invoice?
If you are required to issue a German VAT invoice it must legally hold a minimum level of information. This information is as follows:
- name and address of the supplier;
- name and address of the recipient of the supply;
- issuance date of the invoice;
- invoice number (sequential numbering);
- general tax number (Steuernummer) or VAT number (USt-IdNr) of the supplier and the customer in so far as the latter is VAT registered;
- quantity and commercial description of the goods or services supplied;
- date (at least calendar month) of the supply and date of receipt of prepayments (if known);
- the consideration (amount excluding VAT), divided into standard and reduced rated as well as exempt supplies;
- price reduction (if agreed upon beforehand); and the amount of VAT with applicable VAT rate or, if an exemption applies, a reference that the consideration is exempt (e.g. in the case of intra-Community or export supplies of goods).
Which tax administrative office do I contact for VAT compliance in Germany?
According to the German VAT Responsibility Ordinance, the list of tax offices locally responsible for the VAT of foreign entrepreneurs can be found here
When do I charge VAT on my invoice to German consumers?
If you are VAT registered and sell goods in Germany, you will be required to charge German VAT to your customers. This is referred to as your output VAT.
If you sell to a B2B customer in Germany you will be required to issue a VAT compliant invoice. If you sell to B2C consumers you are not legally obliged to issue a VAT compliant invoice for domestic supplies in Germany but it is common practice to provide one when requested. In case of distance selling to German B2C customers (from an inventory in another EU country) a VAT invoice is always required.
The VAT you collect on your sales is declared to the local tax office by way of a VAT return, which is normally submitted on a quarterly basis. The amount of VAT due to the local tax office can be offset by the VAT you incur on your purchases/costs (i.e. where you have been charged German VAT, including import VAT). This is referred to as input VAT. The amount of VAT payable to the local tax office is the net value of your output VAT less the amount of input VAT which is recoverable.
The above is a limited and general overview and we recommend you consult a tax advisor regarding the preparation and submission of your VAT returns.
If you sell to a B2B customer in Germany you will be required to issue a VAT compliant invoice. If you sell to B2C consumers you are not legally obliged to issue a VAT compliant invoice for domestic supplies in Germany but it is common practice to provide one when requested. In case of distance selling to German B2C customers (from an inventory in another EU country) a VAT invoice is always required.
The VAT you collect on your sales is declared to the local tax office by way of a VAT return, which is normally submitted on a quarterly basis. The amount of VAT due to the local tax office can be offset by the VAT you incur on your purchases/costs (i.e. where you have been charged German VAT, including import VAT). This is referred to as input VAT. The amount of VAT payable to the local tax office is the net value of your output VAT less the amount of input VAT which is recoverable.
The above is a limited and general overview and we recommend you consult a tax advisor regarding the preparation and submission of your VAT returns.
How do I charge VAT on my invoice to Non-German B2C consumers?
Given that EU law only requires that the standard VAT rate must be at least 15% and the reduced rate at least 5%, actual raIf you make distance sales from an inventory in Germany to B2C consumers in other EU countries (example: sell from Germany to another EU country), and do not already have a VAT registration in the ship-to country, you are required to charge German VAT. In these circumstances you must charge and account for VAT using the same method as for domestic sales (see above section). Please note that you must always issue a German VAT compliant invoice for distance sales from Germany which are subject to German VAT.
However, if you exceed the distance selling threshold in another EU country you will be required to register for VAT in that country. This means you should no longer charge German VAT on these types of sales into that country, instead you should charge the VAT of the ship-to country. For example, if you store goods in Germany and start selling those goods to B2C consumers in France you must charge German VAT. As soon as it is clear you will exceed the distance selling threshold in France you must submit a French VAT registration application to the French tax authorities and you will be required to charge French VAT on B2C sales to France (i.e. issue French VAT invoices and submit French VAT returns).
Under distance selling, you can also opt to tax your sales in the ship-to country (before you exceed the distance selling threshold). As soon as such option has been made, VAT of the destination country needs to be collected (instead of German VAT) and that country’s invoice requirements will apply.
If you store goods in the consumer’s EU country prior to the sale this is not considered to be distance selling. For example, if you sell to French consumers and supply those consumers with goods which are already stored in France you will be making a domestic sale in France and will need to consider your VAT registration position in France.
However, if you exceed the distance selling threshold in another EU country you will be required to register for VAT in that country. This means you should no longer charge German VAT on these types of sales into that country, instead you should charge the VAT of the ship-to country. For example, if you store goods in Germany and start selling those goods to B2C consumers in France you must charge German VAT. As soon as it is clear you will exceed the distance selling threshold in France you must submit a French VAT registration application to the French tax authorities and you will be required to charge French VAT on B2C sales to France (i.e. issue French VAT invoices and submit French VAT returns).
Under distance selling, you can also opt to tax your sales in the ship-to country (before you exceed the distance selling threshold). As soon as such option has been made, VAT of the destination country needs to be collected (instead of German VAT) and that country’s invoice requirements will apply.
If you store goods in the consumer’s EU country prior to the sale this is not considered to be distance selling. For example, if you sell to French consumers and supply those consumers with goods which are already stored in France you will be making a domestic sale in France and will need to consider your VAT registration position in France.
How do I charge VAT on my invoice to Non-German B2B consumers in other EU member states?
If you sell to B2B customers in another EU country you are not required to charge VAT if a number of conditions are met. In Germany these conditions, as set out on the Tax Authority’s website, are as follows:
- a supply from Germany to a customer in another EU country is liable to the zero rate where:
- you obtain and show on your VAT sales invoice your customers’ EU VAT registration number, including the 2-letter country prefix code, and
- the goods are sent or transported out of Germany a destination in another EU country, and
- you obtain and keep valid commercial evidence that the goods have been removed from Germany within the time limits set by BZSt.
There are a number of other conditions which must be met, for example, additional specific invoicing requirements, and therefore we recommend you consult a tax advisor prior to making sales to B2B customers in another EU country.
There is also a requirement to submit further supporting documents such as an EC Sales List (periodic report to be submitted to Tax Authority, listing total EU cross border sales from Germany to VAT registered customers in other EU country).
There is also a requirement to submit further supporting documents such as an EC Sales List (periodic report to be submitted to Tax Authority, listing total EU cross border sales from Germany to VAT registered customers in other EU country).
What is the process for claiming German VAT back?
Once you are VAT registered, if you incur German VAT which relates to your business activities you can recover this VAT by way of your VAT return, i.e. the VAT incurred on your purchases/costs can be offset against the VAT due on your sales. VAT incurred on costs is called input VAT. It is possible to recover input VAT outside of the German VAT return process if you do not have a place of business in Germany and are not required to be registered in Germany. If this applies to you we recommend that you consult a tax advisor for more details on the formalities to be fulfilled.
What are the VAT rates in German?
If you sell goods in Germany the VAT rate applicable can vary depending on the type of goods you sell. At present, the VAT rates applicable are either 19%, 7% or 0%. It is worth noting that the vast majority of goods sold in Germany are subject to the 19% rate – please consult your tax advisor if you are uncertain on which VAT rate(s) to apply on your products.
I sell products into an EU country from outside EU (I don’t have a business establishment in EU) and I do not store goods in EU). Do I need to register for VAT?
If you import goods into the EU for onward sale you will generally be required to pay import VAT (and possibly import duty) to the tax authority where the goods are imported. Please note you will be required to register for VAT if you store goods in an EU country. There are many ways to structure and pay import VAT, if you require more detailed advice we recommend you consult with a tax advisor with experience of German VAT.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
Although my company is located outside EU, for my business operations I store goods in Germany and only sell to German based customers. Do I need to register for VAT in Germany?
If you store goods in Germany, sell and move these goods to German based customers, you are required to VAT register in Germany immediately (from the moment the goods enter Germany). Please note that an overseas (non EU) business may also be required to appoint a German tax representative. Similarly, if you store goods in any other EU country you will be required to VAT register in that country as well.
Although my company is located outside EU, I store goods in Germany and sell to non-German based customers. Do I need to register for VAT in Germany?
If you store goods in Germany, sell and move these goods to non-German based customers, you are required to VAT register immediately. This is because the German domestic VAT registration threshold only applies to persons that have a place of business in Germany. Please note that an overseas (non-EU) business may also be required to appoint a German tax representative. Additionally, if you store goods in Germany, sell and move these goods to private individuals in other EU countries (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
Although my company is located outside EU and I do not store goods in Germany, I sell them directly to German-based customers, shipping from an outside EU location. Do I need to register for VAT in Germany?
If you import goods into the EU for onward sale you will generally be required to pay import VAT (and possibly import duty) to the tax authority where the goods are imported. There are many ways to structure and pay import VAT, if you require more detailed advice we recommend you consult with a tax advisor with experience of German VAT.
I sell products from an EU country into another EU country. Where do I need to register for VAT?
My business address is in Germany and I sell goods to German based customers? Do I need to register for VAT in Germany?
My business address is in Germany and I sell goods to German based customers? Do I need to register for VAT in Germany?
If you store goods in Germany and only sell those goods to German based customers, you are required to VAT register once your sales exceed the German VAT registration threshold. If you want to find out more about the VAT thresholds applicable in your case, please consult Tax Authority’s website here.
If additionally you sell and move these goods to consumers in another EU country (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
If additionally you sell and move these goods to consumers in another EU country (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
My business address is in another EU country but I sell goods to German based customers. Do I need to register for VAT in Germany?
If you store goods in another EU country, sell and move these goods to private individuals based in Germany you will be required to VAT register in Germany if you exceed the German distance selling threshold. Also in case you store goods in another EU country and move your own goods to a storage location in Germany (either by your own means or by way of Amazon) there may be a requirement to register for VAT in Germany.
How is VAT charged and reimbursed?
In order to charge VAT you must first be registered for VAT and obtain a VAT number. Once you are VAT registered you are bound by the VAT rules applicable to the country in which you are registered but it normally means that you must charge VAT (where applicable) on your sales and mention this VAT on a VAT compliant invoice (please consult your tax advisor for specific advice regarding invoicing requirements).
The amount of VAT due to a local tax authority, i.e. charged to your customers, can be offset by the VAT which is incurred on your business purchases/costs (please consult a tax advisor regarding on which costs VAT can be recovered). For example, where you have been charged French VAT on a purchase, including import VAT, you can offset this VAT against the VAT due on your French sales in a French VAT return. The amount of VAT payable to the tax authority is the net value of your French output VAT (sales) less the amount of French input VAT (purchases) which is recoverable.
Please note that you should check VAT reporting and invoicing requirements in each country in which you register. Although these requirements are similar, there can be notable differences.
The amount of VAT due to a local tax authority, i.e. charged to your customers, can be offset by the VAT which is incurred on your business purchases/costs (please consult a tax advisor regarding on which costs VAT can be recovered). For example, where you have been charged French VAT on a purchase, including import VAT, you can offset this VAT against the VAT due on your French sales in a French VAT return. The amount of VAT payable to the tax authority is the net value of your French output VAT (sales) less the amount of French input VAT (purchases) which is recoverable.
Please note that you should check VAT reporting and invoicing requirements in each country in which you register. Although these requirements are similar, there can be notable differences.
How do I issue a French VAT compliant invoice?
If you are required to issue a French VAT invoice it must legally hold a minimum level of information. This information is as follows:
- Name and address of the supplier;
- name and address of the recipient of the supply;
- issuance date of the invoice;
- invoice number (sequential numbering);
- VAT number of the supplier
- VAT number of the customer in so far as the latter is VAT registered (this is a requirement for cross border B2B supplies of goods/services as well as for domestic sales in France where the customer needs to account for the French VAT due);
- Quantity and unit price of the goods/services being supplied and applicable VAT rate for each
- Commercial description of the goods or services supplied;
- Date (at least calendar month) of the supply and date of receipt of prepayments (if known);
- The consideration (amount excluding VAT), divided into standard and reduced rated as well as exempt supplies;
- Price reduction (if agreed upon beforehand); and
- The amount of VAT with applicable VAT rate or, if an exemption applies, a reference that the consideration is exempt (e.g. in the case of intra-Community or export supplies of goods).
When do I charge VAT on my invoice to French customers?
If you are VAT registered and sell goods in France, you will be required to charge French VAT to your customers. This is referred to as your output VAT.
If you sell to a B2B customer in France, you will be required to issue a VAT compliant invoice. If you sell to B2C consumers, you are not legally obliged to issue a VAT compliant invoice for domestic supplies in France but it is common practice to provide one when requested. In case of distance selling to French B2C customers (from an inventory in another EU country) a VAT invoice is always required.
The VAT you collect on your sales is declared to the local tax office by way of a VAT return, which is normally submitted on a monthly basis. The amount of VAT due to the local tax office can be offset by the VAT you incur on your purchases/costs (i.e. where you have been charged French VAT, including import VAT). This is referred to as input VAT. The amount of VAT payable to the local tax office is the net value of your output VAT less the amount of input VAT which is recoverable.
The above is a limited and general overview and we recommend you consult a tax advisor regarding the preparation and submission of your VAT returns.
If you sell to a B2B customer in France, you will be required to issue a VAT compliant invoice. If you sell to B2C consumers, you are not legally obliged to issue a VAT compliant invoice for domestic supplies in France but it is common practice to provide one when requested. In case of distance selling to French B2C customers (from an inventory in another EU country) a VAT invoice is always required.
The VAT you collect on your sales is declared to the local tax office by way of a VAT return, which is normally submitted on a monthly basis. The amount of VAT due to the local tax office can be offset by the VAT you incur on your purchases/costs (i.e. where you have been charged French VAT, including import VAT). This is referred to as input VAT. The amount of VAT payable to the local tax office is the net value of your output VAT less the amount of input VAT which is recoverable.
The above is a limited and general overview and we recommend you consult a tax advisor regarding the preparation and submission of your VAT returns.
How do I charge VAT on my invoice to Non-French B2C consumers?
If you make distance sales from an inventory in France to B2C consumers in other EU countries (example: sell from France to another EU country), and do not already have a VAT registration in the ship-to country, you are required to charge French VAT. In these circumstances you must charge and account for VAT using the same method as for domestic sales (see above section). Please note that you must always issue a French VAT compliant invoice for distance sales from France which are subject to French VAT.
However, if you exceed the distance selling threshold in another EU country you will be required to register for VAT in that country. This means you should no longer charge French VAT on these types of sales into that country, instead you should charge the VAT of the ship-to country. For example, if you store goods in Germany and start selling those goods to B2C consumers in France you must charge French VAT. As soon as it is clear you will exceed the distance selling threshold in France you must submit a French VAT registration application to the French tax authorities and you will be required to charge French VAT on B2C sales to France (i.e. issue French VAT invoices and submit French VAT returns).
Under distance selling, you can also opt to tax your sales in the ship-to country (before you exceed the distance selling threshold). As soon as such option has been made, VAT of the destination country needs to be collected and that country’s invoice requirements will apply.
If you store goods in the consumer’s EU country prior to the sale this is not considered to be distance selling. For example, if you sell to French consumers and supply those consumers with goods which are already stored in France you will be making a domestic sale in France and will need to consider your VAT registration position in France.
However, if you exceed the distance selling threshold in another EU country you will be required to register for VAT in that country. This means you should no longer charge French VAT on these types of sales into that country, instead you should charge the VAT of the ship-to country. For example, if you store goods in Germany and start selling those goods to B2C consumers in France you must charge French VAT. As soon as it is clear you will exceed the distance selling threshold in France you must submit a French VAT registration application to the French tax authorities and you will be required to charge French VAT on B2C sales to France (i.e. issue French VAT invoices and submit French VAT returns).
Under distance selling, you can also opt to tax your sales in the ship-to country (before you exceed the distance selling threshold). As soon as such option has been made, VAT of the destination country needs to be collected and that country’s invoice requirements will apply.
If you store goods in the consumer’s EU country prior to the sale this is not considered to be distance selling. For example, if you sell to French consumers and supply those consumers with goods which are already stored in France you will be making a domestic sale in France and will need to consider your VAT registration position in France.
How do I charge VAT on my invoice to Non-French B2B customers in other EU countries?
If you sell to B2B customers in another EU country you are not required to charge VAT if a number of conditions are met. In France these conditions, as set out on the Tax Authority’s website, are as follows:
- A supply from France to a customer in another EU country is liable to the zero rate where:
- you obtain and show on your VAT sales invoice your customers’ EU VAT registration number, including the 2-letter country prefix code, and
- the goods are sent or transported out of France a destination in another EU country, and
- you obtain and keep valid commercial evidence that the goods have been removed from France within the time limits set by the French tax authorities.
There are a number of other conditions which must be met, for example, additional specific invoicing requirements, and therefore we recommend you consult a tax advisor prior to making sales to B2B customers in another EU country.
There is also a requirement to submit further supporting documents such as an EC Sales List (periodic report to be submitted to Tax Authority, listing total EU cross border sales from Germany to VAT registered customers in other EU country).
There is also a requirement to submit further supporting documents such as an EC Sales List (periodic report to be submitted to Tax Authority, listing total EU cross border sales from Germany to VAT registered customers in other EU country).
What is the process for claiming French VAT back?
Once you are VAT registered, if you incur French VAT which relates to your business activities you can recover this VAT by way of your VAT return, i.e. the VAT incurred on your purchases/costs can be offset against the VAT due on your sales. VAT incurred on costs is called input VAT. It is possible to recover input VAT outside of the French VAT return process if you do not have a place of business in France and are not required to be registered in France. If this applies to you we recommend that you consult a tax advisor for more details on the formalities to be fulfilled.
What are the VAT rates in France?
If you sell goods in France the VAT rate applicable can vary depending on the type of goods you sell. At present, the VAT rates applicable are either 20%, 10%, 5.5% or 2.1%. It is worth noting that the vast majority of goods sold in France are subject to the 20% rate. In case you sell goods in France to French based B2B customers, and your business is not established in France, you are not allowed to charge French VAT on your sales invoices to these customers. In such a case, the customer will need to self-assess the French VAT due in its periodic VAT returns.
Please consult your tax advisor if you are uncertain on which VAT rate(s) to apply on your products.
Please consult your tax advisor if you are uncertain on which VAT rate(s) to apply on your products.
I sell products into an EU country from outside EU (I don’t have a business establishment in EU) and I do not store goods in EU). Do I need to register for VAT?
If you import goods into the EU for onward sale you will generally be required to pay import VAT (and possibly import duty) to the tax authority where the goods are imported. Please note you will be required to register for VAT if you store goods in an EU country. There are many ways to structure and pay import VAT, if you require more detailed advice we recommend you consult with a tax advisor with experience of French VAT.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
Although my company is located outside EU, for my business operations I store goods in France and only sell to French based customers. Do I need to register for VAT in France?
If you store goods in France, sell and move these goods to French based consumers, you are required to VAT register in France immediately (from the moment the goods enter France). Please note that an overseas (non-EU) business may also be required to appoint a French tax representative. Similarly, if you store goods in any other EU country you will be required to VAT register in that country as well.
Although my company is located outside EU, I store goods in France and sell to non-French based customers. Do I need to register for VAT in France?
If you store goods in France, sell and move these goods to non-French based customers, you are required to VAT register immediately. This is because the French domestic VAT registration threshold only applies to persons that have a place of business in France. Please note that an overseas (non-EU) business may also be required to appoint a French tax representative. Additionally, if you store goods in France, sell and move these goods to private individuals in other EU countries (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
Although my company is located outside EU and I do not store goods in France, I sell them directly to French-based customers, shipping from an outside EU location. Do I need to register for VAT in France?
If you import goods into the EU for onward sale you will generally be required to pay import VAT (and possibly import duty) to the tax authority where the goods are imported. There are many ways to structure and pay import VAT, if you require more detailed advice we recommend you consult with a tax advisor with experience of French VAT.
I sell products from an EU country into another EU country. Where do I need to register for VAT?
When selling products from one EU country into another EU country, you should be aware that the tax rate can be different from country to country. If you store your goods in an EU country, you are required to VAT register in that EU Country once your sales exceed the VAT registration threshold, if any. Additionally if you transfer your own goods from one EU Country to another, or if FBA transfers your goods from a fulfilment center into another country where your products will be stored, the transfer may also be treated as a transaction subject to VAT. You are responsible for meeting any VAT obligations that apply, including VAT obligations in the Amazon marketplace website locations, the countries from which you are delivering your products, the countries to which you are delivering or shipping your products, or any other countries (e.g. country of importation in case you import products from non EU).
Please also refer to the distance selling section above.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
Please also refer to the distance selling section above.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
My business address is in France and I sell goods to French based customers? Do I need to register for VAT in France?
If you store goods in France and only sell those goods to French based customers, you are required to VAT register once your sales exceed the French VAT registration threshold. If you want to find out more about the VAT thresholds applicable in your case, please consult Tax Authority’s website here.
If additionally you sell and move these goods to consumers in another EU country (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
If additionally you sell and move these goods to consumers in another EU country (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
My business address is in another EU country but I sell goods to French based customers. Do I need to register for VAT in France?
If you store goods in another EU country, sell and move these goods to private individuals based in France you will be required to VAT register in France if you exceed the French distance selling threshold. Also in case you store goods in another EU country and move your own goods to a storage location in France (either by your own means or by way of Amazon) there may be a requirement to register for VAT in France.
How is VAT charged and reimbursed?
In order to charge VAT you must first be registered for VAT and obtain a VAT number (please see section below regarding VAT registration requirements). Once you are VAT registered you are bound by the VAT rules applicable to the country in which you are registered but it normally means that you must charge VAT (where applicable) on your sales and mention this VAT on a VAT compliant invoice (please consult your tax advisor for specific advice regarding invoicing requirements).
The amount of VAT due to a local tax authority, i.e. charged to your customers, can be offset by the VAT which is incurred on your business purchases/costs (please consult a tax advisor regarding on which costs VAT can be recovered). For example, where you have been charged Italian VAT on a purchase, including import VAT, you can offset this VAT against the VAT due on your Italian sales in an Italian VAT return. The amount of VAT payable to the tax authority is the net value of your Italian output VAT (sales) less the amount of Italian input VAT (purchases) which is recoverable.
Please note that you should check VAT reporting and invoicing requirements in each country in which you register. Although these requirements are similar, there can be notable differences. Please see section 5.1.5 below regarding VAT invoicing.
The amount of VAT due to a local tax authority, i.e. charged to your customers, can be offset by the VAT which is incurred on your business purchases/costs (please consult a tax advisor regarding on which costs VAT can be recovered). For example, where you have been charged Italian VAT on a purchase, including import VAT, you can offset this VAT against the VAT due on your Italian sales in an Italian VAT return. The amount of VAT payable to the tax authority is the net value of your Italian output VAT (sales) less the amount of Italian input VAT (purchases) which is recoverable.
Please note that you should check VAT reporting and invoicing requirements in each country in which you register. Although these requirements are similar, there can be notable differences. Please see section 5.1.5 below regarding VAT invoicing.
How do I issue an Italian VAT compliant invoice?
If you are required to issue an Italian VAT invoice it must legally hold a minimum level of information. This information is as follows (exceptions could be applicable, please check them):
- Name and address of the supplier;
- name and address of the recipient of the supply;
- issuance date of the invoice;
- invoice number (sequential numbering);
- VAT number of the supplier
- VAT number of the customer in so far as the latter is VAT registered (this is a requirement for cross border B2B supplies of goods/services as well as for domestic sales in Italy where the customer needs to account for the Italian VAT due);
- Quantity and unit price of the goods/services being supplied and applicable VAT rate for each
- Commercial description of the goods or services supplied;
- Date (at least calendar month) of the supply and date of receipt of prepayments (if known);
- The consideration (amount excluding VAT), divided into standard and reduced rated as well as exempt supplies;
- Price reduction (if agreed upon beforehand); and
- The amount of VAT with applicable VAT rate or, if an exemption applies, a reference that the consideration is exempt (e.g. in the case of intra-Community or export supplies of goods).
When do I charge VAT on my invoice to Italian customers?
If you are VAT registered and sell goods in Italy, you will be required to charge Italian VAT to your customers. This is referred to as your output VAT.
If you sell to a B2B customer in Italy, you will be required to issue a VAT compliant invoice. If you sell to B2C consumers, you are not legally obliged to issue a VAT compliant invoice for domestic supplies in Italy but it is common practice to provide one when requested. In case of distance selling to Italian B2C customers (from an inventory in another EU country) a VAT invoice is always required.
The VAT you collect on your sales is declared to the local tax office by way of a VAT return, which is normally submitted on a monthly, quarterly or an annual basis. The amount of VAT due to the local tax office can be offset by the VAT you incur on your purchases/costs (i.e. where you have been charged Italian VAT, including import VAT). This is referred to as input VAT. The amount of VAT payable to the local tax office is the net value of your output VAT less the amount of input VAT which is recoverable.
The above is a limited and general overview and we recommend you consult a tax advisor regarding the preparation and submission of your VAT returns.
If you sell to a B2B customer in Italy, you will be required to issue a VAT compliant invoice. If you sell to B2C consumers, you are not legally obliged to issue a VAT compliant invoice for domestic supplies in Italy but it is common practice to provide one when requested. In case of distance selling to Italian B2C customers (from an inventory in another EU country) a VAT invoice is always required.
The VAT you collect on your sales is declared to the local tax office by way of a VAT return, which is normally submitted on a monthly, quarterly or an annual basis. The amount of VAT due to the local tax office can be offset by the VAT you incur on your purchases/costs (i.e. where you have been charged Italian VAT, including import VAT). This is referred to as input VAT. The amount of VAT payable to the local tax office is the net value of your output VAT less the amount of input VAT which is recoverable.
The above is a limited and general overview and we recommend you consult a tax advisor regarding the preparation and submission of your VAT returns.
How do I charge VAT on my invoice to Non- Italian B2C consumers?
If you make distance sales from an inventory in Italy to B2C consumers in other EU countries (example: sell from Italy to another EU country), and do not already have a VAT registration in the ship-to country, you are required to charge Italian VAT. In these circumstances you must charge and account for VAT using the same method as for domestic sales (see above section). Please note that you must always issue an Italian VAT compliant invoice for distance sales from Italy which are subject to Italian VAT.
However, if you exceed the distance-selling threshold in another EU country you will be required to register for VAT in that country. This means you should no longer charge Italian VAT on these types of sales into that country, instead you should charge the VAT of the ship-to country. For example, if you store goods in Germany and start selling those goods to B2C consumers in Italy you must charge German VAT. As soon as it is clear, you will exceed the distance selling threshold in Italy you must submit an Italian VAT registration application to the Italian tax authorities and you will be required to charge Italian VAT on B2C sales to Italy (i.e. issue Italian VAT invoices and submit Italian VAT returns).
Under distance selling, you can also opt to tax your sales in the ship-to country (before you exceed the distance selling threshold). As soon as such option has been made, VAT of the destination country needs to be collected and that country’s invoice requirements will apply.
If you store goods in the consumer’s EU country prior to the sale this is not considered to be distance selling. For example, if you sell to Italian consumers and supply those consumers with goods that are already stored in Italy you will be making a domestic sale in Italy and will need to consider your VAT registration position in Italy.
However, if you exceed the distance-selling threshold in another EU country you will be required to register for VAT in that country. This means you should no longer charge Italian VAT on these types of sales into that country, instead you should charge the VAT of the ship-to country. For example, if you store goods in Germany and start selling those goods to B2C consumers in Italy you must charge German VAT. As soon as it is clear, you will exceed the distance selling threshold in Italy you must submit an Italian VAT registration application to the Italian tax authorities and you will be required to charge Italian VAT on B2C sales to Italy (i.e. issue Italian VAT invoices and submit Italian VAT returns).
Under distance selling, you can also opt to tax your sales in the ship-to country (before you exceed the distance selling threshold). As soon as such option has been made, VAT of the destination country needs to be collected and that country’s invoice requirements will apply.
If you store goods in the consumer’s EU country prior to the sale this is not considered to be distance selling. For example, if you sell to Italian consumers and supply those consumers with goods that are already stored in Italy you will be making a domestic sale in Italy and will need to consider your VAT registration position in Italy.
How do I charge VAT on my invoice to Non-Italian B2B customers in other EU countries?
If you sell to B2B customers in another EU country, you are not required to charge VAT if a number of conditions are met. In Italy, these conditions, as set out on the Tax Authority’s website, are as follows (few exceptions could be applicable, please check):
- A supply from Italy to a customer in another EU country is liable to the zero rate where:
- You obtain, retain in your records and show on your VAT sales invoice your customers’ EU VAT registration number, including the 2-letter country prefix code, and
- The goods are sent or transported out of Italy to a destination in another EU country, and
- You obtain and keep valid commercial evidence that the goods have been removed from Italy
There are a number of other conditions which must be met, for example, additional specific invoicing requirements, and therefore we recommend you consult a tax advisor prior to making sales to B2B customers in another EU country.
There is also a requirement to submit further supporting documents such as an EC Sales List (periodic report to be submitted to Tax Authority, listing total EU cross border sales from Italy to VAT registered customers in other EU country).
There is also a requirement to submit further supporting documents such as an EC Sales List (periodic report to be submitted to Tax Authority, listing total EU cross border sales from Italy to VAT registered customers in other EU country).
What is the process for claiming Italian VAT back?
Once you are VAT registered, if you incur Italian VAT which relates to your business activities you can recover this VAT by way of your VAT return, i.e. the VAT incurred on your purchases/costs can be offset against the VAT due on your sales. VAT incurred on costs is called input VAT. It is possible to recover input VAT outside of the Italian VAT return process if you do not have a place of business in Italy and are not required to be registered in Italy. If this applies to you, we recommend that you consult a tax advisor for more details on the formalities to be fulfilled.
What are the VAT rates in Italy?
If you sell goods in Italy the VAT rate applicable can vary depending on the type of goods you sell. At present, the VAT rates applicable are either 22%, 10%, or 4%. In case you sell goods in Italy to Italy based B2B customers, and your business is not established in Italy, you are not allowed to charge Italian VAT on your sales invoices to these customers. In such a case, the customer will need to self-assess the Italian VAT due in its periodic VAT returns.
Please consult your tax advisor if you are uncertain on which VAT rate(s) to apply on your products.
Please consult your tax advisor if you are uncertain on which VAT rate(s) to apply on your products.
I sell products into an EU country from outside EU (I do not have a business establishment in EU) and I do not store goods in EU). Do I need to register for VAT?
If you import goods into the EU for onward sale you will generally be required to pay import VAT (and possibly import duty) to the tax authority where the goods are imported. Please note you will be required to register for VAT if you store goods in an EU country. There are many ways to structure and pay import VAT, if you require more detailed advice we recommend you consult with a tax advisor with experience of VAT.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
Although my company is located outside EU, for my business operations I store goods in Italy and only sell to Italy based customers. Do I need to register for VAT in Italy?
If you store goods in Italy, sell and move these goods to Italy based consumers, you are required to VAT register in Italy immediately (from the moment the goods enter Italy). Please note that an overseas (non-EU) business may also be required to appoint an Italian tax representative. Similarly, if you store goods in any other EU country you will be required to VAT register in that country as well.
Although my company is located outside EU, I store goods in Italy and sell to non- Italy based customers. Do I need to register for VAT in Italy?
If you store goods in Italy, sell and move these goods to non- Italy based customers, you are required to VAT register immediately. Please note that an overseas (non-EU) business may also be required to appoint a Italian tax representative. Additionally, if you store goods in Italy, sell and move these goods to private individuals in other EU countries (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
Although my company is located outside EU and I do not store goods in Italy, I sell them directly to Italy-based customers, shipping from an outside EU location. Do I need to register for VAT in Italy?
If you import goods into the EU for onward sale you will generally be required to pay import VAT (and possibly import duty) to the tax authority where the goods are imported. There are many ways to structure and pay import VAT, if you require more detailed advice we recommend you consult with a tax advisor with experience of Italian VAT.
I sell products from an EU country into another EU country. Where do I need to register for VAT?
If you are required to issue a French VAT invoice it must legally hold a minimum level of information. This information is as follows:Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
My business address is in Italy and I sell goods to Italy based customers? Do I need to register for VAT in Italy?
If you store goods in Italy and only sell those goods to Italy based customers, you are required to VAT register once your sales exceed the Italian VAT registration threshold. If you want to find out more about the VAT thresholds applicable in your case, please consult the Italian Tax Authority’s website here.
If additionally you sell and move these goods to consumers in another EU country (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
If additionally you sell and move these goods to consumers in another EU country (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
My business address is in another EU country but I sell goods to Italy based customers. Do I need to register for VAT in Italy?
If you store goods in another EU country, sell and move these goods to private individuals based in Italy you will be required to VAT register in Italy if you exceed the Italian distance selling threshold. Also in case you store goods in another EU country and move your own goods to a storage location in Italy (either by your own means or by way of Amazon) there may be a requirement to register for VAT in Italy.
How is VAT charged and reimbursed?
In order to charge VAT you must first be registered for VAT and obtain a VAT number. Once you are VAT registered you are bound by the VAT rules applicable to the country in which you are registered but it normally means that you must charge VAT (where applicable) on your sales and mention this VAT on a VAT compliant invoice (please consult your tax advisor for specific advice regarding invoicing requirements).
The amount of VAT due to a local tax authority, i.e. charged to your customers, can be offset by the VAT which is incurred on your business purchases/costs (please consult a tax advisor regarding on which costs VAT can be recovered). For example, where you have been charged Spanish VAT on a purchase, including import VAT, you can offset this VAT against the VAT due on your Spanish sales in a Spanish VAT return. The amount of VAT payable to the tax authority is the net value of your Spanish output VAT (sales) less the amount of Spanish input VAT (purchases) which is recoverable.
Please note that you should check VAT reporting and invoicing requirements in each country in which you register. Although these requirements are similar there can be notable differences.
The amount of VAT due to a local tax authority, i.e. charged to your customers, can be offset by the VAT which is incurred on your business purchases/costs (please consult a tax advisor regarding on which costs VAT can be recovered). For example, where you have been charged Spanish VAT on a purchase, including import VAT, you can offset this VAT against the VAT due on your Spanish sales in a Spanish VAT return. The amount of VAT payable to the tax authority is the net value of your Spanish output VAT (sales) less the amount of Spanish input VAT (purchases) which is recoverable.
Please note that you should check VAT reporting and invoicing requirements in each country in which you register. Although these requirements are similar there can be notable differences.
How do I issue an Spanish VAT compliant invoice?
If you are required to issue a Spanish VAT invoice it must legally hold a minimum level of information. This information is as follows (exceptions could be applicable, please check them):
- Name and address of the supplier;
- name and address of the recipient of the supply;
- issuance date of the invoice;
- invoice number (sequential numbering);
- VAT number of the supplier
- VAT number of the customer in so far as the latter is VAT registered (this is a requirement for cross border B2B supplies of goods/services as well as for domestic sales in Spain where the customer needs to account for the Spanish VAT due);
- Quantity and unit price of the goods/services being supplied and applicable VAT rate for each
- Commercial description of the goods or services supplied;
- Date (at least calendar month) of the supply and date of receipt of prepayments (if known);
- The consideration (amount excluding VAT), divided into standard and reduced rated as well as exempt supplies;
- Price reduction (if agreed upon beforehand); and
- The amount of VAT with applicable VAT rate or, if an exemption applies, a reference that the consideration is exempt (e.g. in the case of intra-Community or export supplies of goods).
When do I charge VAT on my invoice to Spanish customers?
If you are VAT registered and sell goods in Spain you will be required to charge Spanish VAT to your customers. This is referred to as your output VAT.
If you sell to a B2B customer in Spain, you will be required to issue a VAT compliant invoice. If you sell to B2C consumers, you are not legally obliged to issue a VAT compliant invoice for domestic supplies in Spain but it is common practice to provide one when requested. In case of distance selling to Spanish B2C customers (from an inventory in another EU country) a VAT invoice is always required.
The VAT you collect on your sales is declared to the local tax office by way of a VAT return, which is normally submitted on a monthly, quarterly or an annual basis. The amount of VAT due to the local tax office can be offset by the VAT you incur on your purchases/costs (i.e. where you have been charged Spanish VAT, including import VAT). This is referred to as input VAT. The amount of VAT payable to the local tax office is the net value of your output VAT less the amount of input VAT which is recoverable.
The above is a limited and general overview and we recommend you consult a tax advisor regarding the preparation and submission of your VAT returns.
If you sell to a B2B customer in Spain, you will be required to issue a VAT compliant invoice. If you sell to B2C consumers, you are not legally obliged to issue a VAT compliant invoice for domestic supplies in Spain but it is common practice to provide one when requested. In case of distance selling to Spanish B2C customers (from an inventory in another EU country) a VAT invoice is always required.
The VAT you collect on your sales is declared to the local tax office by way of a VAT return, which is normally submitted on a monthly, quarterly or an annual basis. The amount of VAT due to the local tax office can be offset by the VAT you incur on your purchases/costs (i.e. where you have been charged Spanish VAT, including import VAT). This is referred to as input VAT. The amount of VAT payable to the local tax office is the net value of your output VAT less the amount of input VAT which is recoverable.
The above is a limited and general overview and we recommend you consult a tax advisor regarding the preparation and submission of your VAT returns.
How do I charge VAT on my invoice to Non-Spanish B2C consumers?
If you make distance sales from an inventory in Spain to B2C consumers in other EU countries (example: sell from Spain to another EU country), and do not already have a VAT registration in the ship-to country, you are required to charge Spanish VAT. In these circumstances you must charge and account for VAT using the same method as for domestic sales (see above section). Please note that you must always issue a Spain VAT compliant invoice for distance sales from Spain which are subject to Spanish VAT.
However, if you exceed the distance selling threshold in another EU country you will be required to register for VAT in that country. This means you should no longer charge Spanish VAT on these types of sales into that country, instead you should charge the VAT of the ship-to country. For example, if you store goods in Germany and start selling those goods to B2C consumers in Spain you must charge German VAT. As soon as it is clear you will exceed the distance selling threshold in Spain you must submit a Spanish VAT registration application to the Spanish tax authorities and you will be required to charge Spanish VAT on B2C sales to Spain (i.e. issue Spanish VAT invoices and submit Spanish VAT returns).
Under distance selling, you can also opt to tax your sales in the ship-to country (before you exceed the distance selling threshold). As soon as such option has been made, VAT of the destination country needs to be collected and that country’s invoice requirements will apply.
If you store goods in the consumer’s EU country prior to the sale this is not considered to be distance selling. For example, if you sell to Spanish consumers and supply those consumers with goods which are already stored in Spain you will be making a domestic sale in Spain and will need to consider your VAT registration position in Spain.
However, if you exceed the distance selling threshold in another EU country you will be required to register for VAT in that country. This means you should no longer charge Spanish VAT on these types of sales into that country, instead you should charge the VAT of the ship-to country. For example, if you store goods in Germany and start selling those goods to B2C consumers in Spain you must charge German VAT. As soon as it is clear you will exceed the distance selling threshold in Spain you must submit a Spanish VAT registration application to the Spanish tax authorities and you will be required to charge Spanish VAT on B2C sales to Spain (i.e. issue Spanish VAT invoices and submit Spanish VAT returns).
Under distance selling, you can also opt to tax your sales in the ship-to country (before you exceed the distance selling threshold). As soon as such option has been made, VAT of the destination country needs to be collected and that country’s invoice requirements will apply.
If you store goods in the consumer’s EU country prior to the sale this is not considered to be distance selling. For example, if you sell to Spanish consumers and supply those consumers with goods which are already stored in Spain you will be making a domestic sale in Spain and will need to consider your VAT registration position in Spain.
How do I charge VAT on my invoice to Non-Spanish B2B customers in other EU countries?
If you sell to B2B customers in another EU country you are not required to charge VAT if a number of conditions are met. In Spain these conditions, as set out on the Tax Authority’s website, are as follows (few exceptions could be applicable, please check):
- Supply from Spain to a customer in another EU country is liable to the zero rate where:
- You obtain and show on your VAT sales invoice your customers’ EU VAT registration number, including the 2-letter country prefix code, and
- The goods are sent or transported out of Spain to a destination in another EU country, and
- You obtain and keep valid commercial evidence that the goods have been removed from Spain
There are a number of other conditions which must be met, for example, additional specific invoicing requirements, and therefore we recommend you consult a tax advisor prior to making sales to B2B customers in another EU country.
There is also a requirement to submit further supporting documents such as an EC Sales List (periodic report to be submitted to Tax Authority, listing total EU cross border sales from Spain to VAT registered customers in other EU country).
There is also a requirement to submit further supporting documents such as an EC Sales List (periodic report to be submitted to Tax Authority, listing total EU cross border sales from Spain to VAT registered customers in other EU country).
What is the process for claiming Spanish VAT back?
Once you are VAT registered, if you incur Spanish VAT which relates to your business activities you can recover this VAT by way of your VAT return, i.e. the VAT incurred on your purchases/costs can be offset against the VAT due on your sales. VAT incurred on costs is called input VAT. It is possible to recover input VAT outside of the Spanish VAT return process if you do not have a place of business in Spain and are not required to be registered in Spain If this applies to you we recommend that you consult a tax advisor for more details on the formalities to be fulfilled.
What are the VAT rates in Spain?
If you sell goods in Spain the VAT rate applicable can vary depending on the type of goods you sell. At present, the VAT rates applicable are either 21%, 10% or 4%. In case you sell goods in Spain to Spain based B2B customers, and your business is not established in Spain, you are not allowed to charge Spanish VAT on your sales invoices to these customers. In such a case, the customer will need to self-assess the Spanish VAT due in its periodic VAT returns.
Please consult your tax advisor if you are uncertain on which VAT rate(s) to apply on your products.
Please consult your tax advisor if you are uncertain on which VAT rate(s) to apply on your products.
I sell products into an EU country from outside EU (I do not have a business establishment in EU) and I do not store goods in EU). Do I need to register for VAT?
If you import goods into the EU for onward sale you will generally be required to pay import VAT (and possibly import duty) to the tax authority where the goods are imported. Please note you will be required to register for VAT if you store goods in an EU country. There are many ways to structure and pay import VAT, if you require more detailed advice we recommend you consult with a tax advisor with experience of VAT.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
Although my company is located outside EU, for my business operations I store goods in Spain and only sell to Spain based customers. Do I need to register for VAT in Spain?
If you store goods in Spain, sell and move these goods to Spain based consumers, you are required to VAT register in Spain immediately (from the moment the goods enter Spain). Please note that an overseas (non EU) business may also be required to appoint a Spanish tax representative. Similarly, if you store goods in any other EU country you will be required to VAT register in that country as well.
Although my company is located outside EU, I store goods in Spain and sell to non- Spain based customers. Do I need to register for VAT in Spain?
If you store goods in Spain, sell and move these goods to non- Spain based customers, you are required to VAT register immediately. Please note that an overseas (non-EU) business may also be required to appoint Spanish tax representative. Additionally, if you store goods in Spain sell and move these goods to private individuals in other EU countries (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
Although my company is located outside EU and I do not store goods in Spain, I sell them directly to Spain based customers, shipping from an outside EU location. Do I need to register for VAT in Spain?
If you import goods into the EU for onward sale you will generally be required to pay import VAT (and possibly import duty) to the tax authority where the goods are imported. There are many ways to structure and pay import VAT, if you require more detailed advice we recommend you consult with a tax advisor with experience of Spanish VAT.
I sell products from an EU country into another EU country. Where do I need to register for VAT?
When selling products from one EU country into another EU country, you should be aware that the tax rate could be different from country to country. If you store your goods in an EU country you are required to VAT register in that EU Country once your sales exceed the VAT registration threshold, if any. Additionally if you transfer your own goods from one EU Country to another, or if FBA transfers your goods from a fulfilment center into another country where your products will be stored, the transfer may also be treated as a transaction subject to VAT. You are responsible for meeting any VAT obligations that apply, including VAT obligations in the Amazon marketplace website locations, the countries from which you are delivering your products, the countries to which you are delivering or shipping your products, or any other countries (e.g. country of importation in case you import products from non EU).
Please also refer to the distance selling section above.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
Please also refer to the distance selling section above.
Tip: When selling in multiple Amazon European marketplaces, keep in mind that you may be liable to pay VAT to different EU countries and so may need to apply for different VAT numbers with different countries. Consult your tax advisor to help you understand your VAT obligations in the EU.
My business address is in Spain and I sell goods to Spain based customers? Do I need to register for VAT in Spain?
If you store goods in Spain and only sell those goods to Spain based customers, you are required to VAT register once your sales exceed the Spanish VAT registration threshold. If you want to find out more about the VAT thresholds applicable in your case, please consult the Spanish Tax Authority’s website here.
If additionally you sell and move these goods to consumers in another EU country (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
If additionally you sell and move these goods to consumers in another EU country (often referred to as distance selling) you may also be required to register for VAT in the EU country where the goods are received.
My business address is in another EU country but I sell goods to Spain based customers. Do I need to register for VAT in Spain?
If you store goods in another EU country, sell and move these goods to private individuals based in Spain you will be required to VAT register in Spain if you exceed the Spanish distance selling threshold. Also in case you store goods in another EU country and move your own goods to a storage location in Spain (either by your own means or by way of Amazon) there may be a requirement to register for VAT in Spain.
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