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]

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]

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]

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

 

[CyprusBusiness]

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]

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

 

[CyprusBusiness]

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]

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]

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