Delivering products within the EU – these are the new VAT-rules
July 1st a lot will change for entrepreneurs delivering products to consumers (or entrepreneurs without VAT number) across the border but within the EU. Do you have a webshop in jewellery, ceramics or clothing for instance? Whatever you’re selling, keep in mind that as of July 1 there are different rules for declaring VAT in the EU.
At the moment a sale to a foreign consumer or organisation that is not VAT-liable, is charged with VAT in the Netherlands. But every EU country has it’s own threshold amount that you need to keep in mind. When your sales surpass this threshold you’ll have to pay VAT in your customer ’s country. You’ll need to apply as an entrepreneur for their national sales tax. Quite complicated and it could cause a lot of extra administration!
New situation from July 1
As of July 1 the threshold amounts for these so called ‘distance sales’ (afstandsverkopen) will be cancelled and the main rule is that the products will be charged with VAT in the country of the recipient. For you as an entrepreneur this means you’ll have to declare VAT in that country. There is an exception for small business owners. When you annually deliver for less than € 10.000 in products to customers in other EU countries, you can still choose to charge Dutch VAT and declare your VAT in the Netherlands.
When you deliver products to customers in a lot of different EU countries and you don’t want to declare your VAT in every country separately, you can choose to apply for the One-Stop-Shop system at the Tax and Customs Administration (Belastingdienst). You can declare the total amount of VAT over your deliveries to other EU-countries for each term. Do make sure you use the correct VAT per country. The Tax and Customs Administration will then take care of your VAT declaration with the other member states.
You have to meet these requirements:
When you provide services to customers in other EU-countries, you can also choose to apply for OSS, from July 1. This is also a part of the Union scheme, just like delivering products.
Do the products you deliver come from outside the EU? Then you’ll also need to declare VAT in the country you’re delivering to. You can use the import scheme in the One-Stop-Shop. To use these schemes you need to register. You can register here.
How to prepare?
With the threshold amounts being cancelled , you might have to declare VAT in another EU country sooner than you used to. That’s why it’s smart to find out in which EU countries your customers live, how much revenue you have in each country and what VAT percentage applies there.
Also think about the consequences this will have for your product. Will you need to adjust the prices for certain countries? And do you want your prices including or excluding VAT in your webshop? Make sure to inform what the possibilities are with the supplier of the sales system you use.
Above all, consider if you want to use the schemes mentioned in this article or if you want to declare VAT for each country separately. Then make sure you have everything up and running by July 1 2021!