Value added taxes general principles
When selling and importing goods to and from another country, some considerations to taxation should be made. On this page is a general guideline to get you started. OGOship recommends VAT compliance but the responsibility for being compliant is for the Merchant. Certain OGOship warehouses (e.g. warehouse in the United Kingdom) require VAT compliance to enable their usage.
OGOship has partnered with SimplyVAT that helps online sellers in stress-free VAT compliance.
Importing and storage of goods
When importing / moving goods inside Europe, VAT registration in the place where the goods are stored is required. We recommend reading through this guideline page from SimplyVAT to learn more about when you need to register and where to.
When goods are imported into a country, the customs duties and taxes need to be paid to the country where the goods 1st arrive, if the goods cross a customs border. In case e.g. importing to Estonia, the customs duties and taxes would need to be paid to the Estonian authorities. There are some things to consider:
- If importing to Europe, your company needs an EORI number. You may apply for this number from the local customs authorities where your company is currently registered in. If your company is registered in Sweden, you must apply for an EORI number from Sweden. This is a simple process but might take time between 1 - 4 weeks.
- Regarding VAT: When you import the goods to another country, you need to pay the local value added taxes to the country in question. In e.g. Estonia the VAT rate is 20 % and therefore when importing from outside the EU to Estonia, you need to pay the 20 % VAT to the Estonian authorities.
Please note: your freight company can be asked to handle all customs duties and VAT payments on your behalf, however the EORI number is needed nevertheless in Europe.
Application for an EORI number: guide
Selling to another country
Online sales to consumers in another country is called "distance selling" within the EU. The basic princinple for VAT payments for consumers is that VAT always needs to be paid to the country where you are selling to. For instance, if you are selling to France, you would need to pay the sales VAT to the French tax authorities. However, there is an exception: if your sales volumes to foreign countries are below the minimum VAT threshold, you may pay the sales VAT to the country where you ship from. If you ship from e.g. Sweden, you can pay the VAT to Sweden.
The VAT thresholds per country are available from many online sources, either official of unofficial (see below our recommended link). The levels are commonly between EUR 10 000 - EUR 50 000 per year total sales to one country. As soon as the threshold crosses over, the VAT payments need to be made to the destination country.
There is also a rule that you can always voluntarily pay the VAT to the target country, even though you are below the threshold. If you e.g. stock your goods in The Netherlands and sell to Sweden, you can voluntarily pay the VAT to Sweden even if you are below the annual threshold of SEK 320 000.
Distance selling thresholds: listing
Help from OGOship or from SimplyVAT
In the above guide, we have given you the basic principles of VAT in distance selling. For in-depth guidance and registration help, OGOship has negotiated a partnership deal with SimplyVAT. Please contact firstname.lastname@example.org for an introduction to SimplyVAT and a discount from standard rates.