stands for Value Added Tax.
It is a tax that sellers registered in Europe add to the price of the products they sell, and transfer it to the national tax authorities when they file their tax returns.
If you sell products in any European country, you will likely need to register a VAT number for each country you sell to. Remember that it is the responsibility of the Amazon seller to ensure that they comply with VAT regulations and to seek professional help in case of doubt.
How does VAT work?
The basic principle is that companies can recover the VAT they have paid on their purchases and collect VAT on their sales. At the same time that you pay VAT to the taxreliefservices agency, the final consumer pays VAT as part of the purchase price.
In this way, the customer knows how much VAT he has to pay for the product he has purchased.
What are the EU VAT rates?
The current VAT rates that apply vary between European countries (the standard rate must be at least 15%) and for certain types of products.
In addition, some European countries set other rates for specific products.
The VAT guidelines offer national governments the freedom to set whatever VAT rate they want, subject to just two basic rules:
- The standard rate for all goods and services.
- A European country can choose to apply one or two reduced rates, but only to goods or services listed in the VAT Directive.
The standard VAT rate is the one that European countries apply to all non-exempt goods and services. It cannot be less than 15%, but there is no maximum.
What is the VAT return?
VAT reporting is the process of preparing and reporting to the tax authorities to provide them with information about your transactions in the relevant period and to communicate the amount of VAT you are due to pay (or receive in the case of VAT deduction).
A VAT return includes information on VAT due to customers, VAT deductible from suppliers, along with cross-border sales, cross-border acquisitions, imports and exports.
Consult your tax advisor for more information.
What is customs duty?
What is billing?
In most European countries, customers receive an invoice with VAT. The process of issuing a VAT invoice varies by country. For more information
If you are a non-EU resident seller, you will need to appoint a tax representation in some EU countries to register for VAT purposes.
Fiscal representation is the process in which a person or company acts on behalf of a non-resident company for VAT purposes in the EU.
Tax representatives in many EU countries are jointly and severally liable for the VAT debts of a non-EU seller. These additional requirements depend on the specific requirements of the country and the service provider of the fiscal representation.