As a dropshipper (or an aspiring dropshipper) selling to EU customers, you’ve probably heard about the EU’s VAT changes.
A lot of dropshippers are asking: What has changed? How will this affect my business? Do I need to increase my prices or stop selling to/in the EU?
In this article, we take a look at the new VAT changes coming into effect in July 2021, and how they might affect your business.
If Your Business Earns More
Than €10,000 per annum, you are now responsible for collecting, reporting and remitting (paying) VAT.
In the past, each country has a different sales distance threshold for distance sellers .
Distance sold threshold: revenue earned before the e-commerce business is responsible for collecting and reporting VAT
Distance seller: any business that sells Pharmaceutical Email List across the borders of EU countries
For example, the threshold in Germany is 100,000 euros and in Spain it is 35,000 euros. If you no longer ship to customers in Germany, you are not responsible for VAT if you earn less than 100,000 euros per year – but now you are responsible if you have earned more than 100,000 euros per year for the past two years VAT.
You Can No Longer Avoid Import Vat on Goods
Previously, remote sellers were exempt from import VAT on goods worth less than 22 euros. This rule no longer exists. Import VAT now applies to all purchases below €150.
This is why the EU has introduced the Import CNB Directory One-Stop Shop (IOSS). This tool gives sellers the option to declare and remit VAT to tax authorities, rather than having buyers pay VAT when the goods are imported into their home country.