VAT, as well as VAT registration and VAT billing are a very big problem and challenge for online traders who have and operate within the European Union.

VAT, as well as VAT registration and VAT billing are a very big problem and challenge for online traders who have and operate within the European Union. The existing differences between the VAT rates due depend on the country in question. For a seller, mainly a small one, who operates or intends to operate in the EU, terms such as VAT registration limit, EU VAT invoicing, VAT shipping limit, place of shipping are very discouraging to increase sales, to grow the business.

If you want to sell your goods, you operate in the e-commerce market, where you face many difficulties. Every year more online shops are registered, which means the competition is constantly growing. New services, sales portals on the Internet. And the seller has to fight for every customer in the market, to top it all off, there is that unfortunate VAT.

VAT what is it ?

VAT, an acronym for Value Added Tax, is a consumption tax. It is levied on almost all goods, services purchased and services sold for consumption and use within the European Union. Its value is added to the net value of all commercial transactions. VAT is charged irrespective of whether the transaction is between private individuals or businesses, both when importing and when transferring goods within the European Union.

New settlement rules

how to register for EU VAT. Internet sales occur between an entrepreneur, i.e. in our case an online shop, and a private person. The following rules must be observed when selling online:

There are no limits for deliveries to individual EU countries (between EUR 35,000 and EUR 100,000), until which internet sales, i.e. mail order sales to a private individual were subject to VAT.

There is a uniform threshold of EUR 10,000, this is the net amount for the online seller for all his sales from one country to another EU country, i.e. so-called intra-Community distance selling of goods.

Once the EUR 10,000 threshold is exceeded or waived, the online retailer is obliged to register in every country to which it dispatches goods, even for a small shipment value.

The online retailer can choose a simplified and centralised settlement method via the One Stop Shop (OSS) in the country in which it is established.

With the OSS, the online retailer declares all sales with foreign VAT in a single declaration and pays the VAT in the country of registration.

OSS declarations for online sales are submitted quarterly, by the end of the month after the end of the quarter.

Participation in the OSS is voluntary. The online retailer has the option of opting for OSS or registering in each country to which it ships.

If the online seller uses Amazon warehouses (e.g. within Amazon Pan EU or CEE), the online seller still has to be registered for VAT in the countries where the goods are stored.

If the online seller uses the option to settle via OSS, the online seller must settle all CTSO sales via OSS. It is not possible to account for part of the sales through the OSS and mail order sales to individual countries in local declarations.

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