Do I have to pay EU VAT? Dropshipping

[banafinfodafuggiano]

The legal entity is based in Canada, and the goods sold are purchased from local suppliers in the EU.
Customers are also within the EU.

Since my entity doesn't technically ship products to the EU, do I still have to charge / collect VAT from customers
and remit it to the European union or not since my suppliers are already collecting VAT from me?

 

[Marzio]

Do you sell to the final user?

Is the final user in EU?

If yes you'll need to collect VAT

For more consult this form

https://europa.eu/youreurope/business/taxation/vat/cross-border-vat/index_en.htm

 

[banafinfodafuggiano]

Marzio said:
Do you sell to the final user?

Is the final user in EU?

If yes you'll need to collect VAT

For more consult this form

https://europa.eu/youreurope/business/taxation/vat/cross-border-vat/index_en.htm
Click to expand...

Yes.

So, is there a way to collect VAT and pay it all in one go without having to register and pay each individual european copuntry?

 

[CyprusBusiness]

banafinfodafuggiano said:
Yes.

So, is there a way to collect VAT and pay it all in one go without having to register and pay each individual european copuntry?
Click to expand...

Yes, you can use OSS/IOSS platform. You need to register to a single Member State for VAT and make B2C declarations in OSS platform to that State. The payment is done to a single Authority (the Central Bank) which distributes VAT payments to each tax office of each Member State. Pm me if you need more info on this

https://vat-one-stop-shop.ec.europa.eu/one-stop-shop_en

 

[banafinfodafuggiano]

CyprusBusiness said:
Yes, you can use OSS/IOSS platform. You need to register to a single Member State for VAT and make B2C declarations in OSS platform to that State. The payment is done to a single Authority (the Central Bank) which distributes VAT payments to each tax office of each Member State. Pm me if you need more info on this

https://vat-one-stop-shop.ec.europa.eu/one-stop-shop_en
Click to expand...

the thresold is 10,000 euro right? before that it's not mandatory to collect VAT? as a foreign company

 

[CyprusBusiness]

banafinfodafuggiano said:
the thresold is 10,000 euro right? before that it's not mandatory to collect VAT? as a foreign company
Click to expand...

The threshold is 10,000 Euro for intra-European sales. If this is not exceeded and the seller is established in just one Member State, the seller should only have to charge VAT in the Member State where he is established, unless he opts for VAT in the Member State of destination of the goods/services. If the threshold is exceeded, VAT of the Member State to which the goods are dispatched or transported (or where the non-taxable person to whom the service is supplied, is established) shall be charged

 

[banafinfodafuggiano]

CyprusBusiness said:
The threshold is 10,000 Euro for intra-European sales. If this is not exceeded and the seller is established in just one Member State, the seller should only have to charge VAT in the Member State where he is established, unless he opts for VAT in the Member State of destination of the goods/services. If the threshold is exceeded, VAT of the Member State to which the goods are dispatched or transported (or where the non-taxable person to whom the service is supplied, is established) shall be charged
Click to expand...

my company is based in Canada, is the thresold applicable to me or not and I must register for VAT from day one?

 

[CyprusBusiness]

banafinfodafuggiano said:
my company is based in Canada, is the thresold applicable to me or not and I must register for VAT from day one?
Click to expand...

Yes, the threshold applies to both EU and non-EU sellers that perform supplies to consumers in the EU. See all info here: VAT for e-commerce

 

[Hydrox]

CyprusBusiness said:
Yes, the threshold applies to both EU and non-EU sellers that perform supplies to consumers in the EU. See all info here: VAT for e-commerce
Click to expand...

I do dropshipping from China to Germany, when i register for IOSS do i have to pay the VAT on the price that i solt the item to the customer or do i have to pay it on the actual product price from my supplier in China?

 

[CyprusBusiness]

Hydrox said:
I do dropshipping from China to Germany, when i register for IOSS do i have to pay the VAT on the price that i solt the item to the customer or do i have to pay it on the actual product price from my supplier in China?
Click to expand...

Hello, VAT should be charged on the total selling price to the consumer. You have eligibility to claim VAT back from VAT imposed through customs in Germany. You will need a German VAT number and fill the VAT forms