In an article that appears in our latest e-Info magazine for online sellers, Chris O’Shea says that even if VAT isn’t top of your list, you should at least put it somewhere on your list.
Having worked with global online sellers for over 20 years, we’ve seen again and again that VAT is rarely at the top of anyone’s agenda. The over-riding priorities are to sell products, get paid, ship them and deal with any returns as quickly as possible.
VAT is simply down the list of priorities. However, this doesn’t excuse the fact that declaring the right amount of VAT in the right countries at the right time is a legal obligation and something that can’t be avoided. Our advice to sellers in 2016 is to determine either yourself or with the help of an expert whether or not you need to VAT register in another country.
As an online seller, the opportunity for you to sell beyond your domestic market is vast. Amazon has unified its five European marketplaces. This allows you to create and manage product offers in one or all of these five. You can control what and where you sell and you manage all your European business from a single seller account. Keep in mind that if you are selling across the European Union you may need to register for VAT in the country where customers are located.
From a tax perspective, becoming compliant in some countries is more difficult than in others. For example, the USA is the only country in the OECD that doesn’t have a VAT system. Instead it has a Sales and Use Tax system and over 11,000 taxing jurisdictions.
For many reasons it makes sense to sell to US customers, however I’d recommend speaking with a professional to determine if you have any Sales Tax liability, especially if you are using Amazon FBA.
From January 1st 2016 the distance selling threshold for France will be reduced from €100,000 to €35,000. This means that all non-French distance sellers who sell above €35,000 at some point in 2016 to private individuals in France must register for VAT in France. So for sellers who are new to France and who plan to sell on Priceminister, Cdiscount, La Redoute and Fnac, it’s a good idea to get a French VAT number sooner rather than later.