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Presented by Alex Wyatt from SimplyVAT
Retailers Selling into the EU
@veeqo @simplyvat
VAT RULES FOR
Roadmap
• About SimplyVAT
• Why Sell in Europe?
• What is VAT?
• Amazon’s European Invasion
• Your EU VAT Tax Obligations
• Understanding VAT Tax – How it impacts your business
• Brexit
About SimplyVAT.com
19 years experience in
international VAT
Launched SimplyVAT.com to
help online retailers with the EU VAT rules
Launchedin 2013
Clients in over 20 countries
Ethos: we’re‘here to help’
SimplyVAT software platform launch
Summer 2017
In life…
International VAT Obligations
• Standard VAT rates range from 17% – 27% across the EU
• Favoured by over 140 countries world-wide including China
• Governments get revenue every transaction
• Not supposed to be a burden to a business
What is VAT? (Value Added Tax)
Applied every time value is added:
+ VAT
+ VAT
+ VAT
+ VAT
Single Set of Rules
• 28 sets of interpretation – includes VAT legislation
Selling in the EU…what do you need to know?
• 31 fulfilment centres distributed across 7
countries
• Access to a €500 billion market and growing
12% year-on-year
• 296 million online shoppers in Europe
currently
• Average spend of €1,540 each online last
year
‘s European Invasion
United Kingdom
GermanyFrance
Italy
Spain
5 Marketplaces
Merchant Fulfilled network (MFN)Goods fulfilled from the seller’s own warehouse
European Fulfilment Network (EFN)Goods stored in a single EU member state (country) with all deliveries being made from that one warehouse
Multi Country Inventory (MCI)Choose where to store goods in multiple warehouses around the EU
Central European FBA German marketplace + stock stored in Poland and Czech Republic
Pan-European FBAShip to a fulfilment centre. Amazon manage distribution across the EU FBA centres
‘s European Invasion
Uses warehouses in 7
countries – 5 market places
+ Czech Republic and Poland
‘s European Invasion – Pan-EU Fulfilment
United Kingdom
Germany
France
Italy
Spain
Products moved around to
get closer to final buyer
Aim to get your products to
your buyers more quickly
Do you know what your EU VAT obligations are?
?
‘s European Invasion
Selling in the EU…Import taxes & dutiesWho is ‘The Importer of Record’?
THE
SELLERORTHE
CUSTOMER
EORI Number – For Import into EU
+ Duties+ Insurance+Import VATCharged = % Cost
Value Freight
• EORI Number on Import Documents
• Reclaim Import VAT on VAT Return
• Stock in an EU country creates a taxable supply
• Amazon’s Pan EU – 7 VAT registrations – Germany,
France, Italy, Spain, UK, Czech Republic, and
Poland
Selling in the EU…using fulfilment centres
A VAT registration will be
required immediately in the EU
country where you are holding
stock in fulfilment centres –
there is no threshold to exceed
Signing Up for Amazon Pan-EU…
7 VAT
Registrations
64 VAT
Returns per year+Other reporting
eg. EC Sales Lists, Intrastat
Declarations+
You might already be signed up!
Signing up for Pan-EU…
Slow and Steady Wins the Race…?
Fiscal Representation for Non-EU Companies
Non-EU Companies Require Fiscal Representation
• Jointly and severely liable for VAT owed
• Bank guarantees or increased fees or both
How To Avoid Fiscal Representation
• Establish a company in a EU country eg. UK
• EU to EU rules apply
Selling Goods to EU B2C
UK Fulfilment Centre EU Private Customer
• Applies to anyone – registered business or not
• Also applies when selling through the online market places e.g. eBay or Amazon
• Different rules apply when selling to private customers in non-EU countries (Export of Goods)
Ebay and Amazon are not responsible for collecting or paying VAT on your behalf
The EU Distance Selling RulesCharge local VAT until the VAT registration threshold is exceeded in any other EU country where your goods are sold per calendar year
THRESHOLDS
Country Threshold Equivalent to approx.
Most EU countries
€35,000 $36,000
Germany, Netherlands, Luxembourg
€100,000 $105,000
UK £70,000 $85,000
Failure to register could result in significant penalties and interest on late payments
Selling Goods in Europe…It doesn’t take that much
to exceed thresholds
Sold 70 of these and not yet in the picture?
300 pairs of these could march you over the threshold
Just 175 of these could bring your business to a halt
35 of these could see your business carry a big fine
Ignorance is No Defence
€193 billion lost revenue in EU in 2011
£10 billion lost revenue by UK each year
Specialist sections within EU tax authorities are actively pursuing e-tailers and approaching
Amazon and eBay for seller sales data
Nowhere to Hide…the new rules
• 1. Making Amazon Responsible if Seller is not compliant
• 2. Amazon can shut your Amazon Store down in 30 days
• 3. HMRC can make you appoint a VAT representative who will be jointly liable
New powers to HMRC include:
+-x
%
VAT Rates & Your Margins
?
VAT Rates & Your Margins
VAT is Calculated on the
Product Sale Amount
VAT Rates & Your Margins…how to make VAT work for you!
Zero Rated Items – only in UK and Ireland
Brexit…
• UK will no longer access single market
• Goods from UK to EU will have to be imported
• Goods into UK from China imported (as now)
• UK should retain VAT system
• UK VAT registration required when stock held in UK FBA
Brexit – What’s the impact?
Increased cost of compliance
BEFORE
1 UK VAT registration to
access EU
1 UK company to avoid fiscal
representation
1 VAT registration to
access UK
1 VAT registration to
access EU
1 EU company to avoid fiscal
representation
AFTER
Brexit – What’s the impact?
Don’t let VAT be a barrier…
…to global domination!
We can help…
…. You Sleep At Night
Where To Find Us
www.simplyvat.com/cn
@simplyVAT
www.facebook.com/simplyvat
SimplyVAT.com
Presented by Alex Wyatt from SimplyVAT
Retailers Selling into the EU
@veeqo @simplyvat
VAT RULES FOR
