Do I need to register for VAT for my new ecommerce business?

[baemaya]

Hi everyone! 
I am starting a new small ecommerce business but I am confused if I need to register for vat since I am USA based business and intend to sell and ship worldwide including EU. I can't find good information on how to register for vat or where to. or if i even need one. If someone could help me with this ❤️

[Victor]

Hi @baemaya,

Thank you for getting in touch. Understanding tax laws can be confusing, and especially so when you are looking to sell abroad. I would recommend reading our Help Center pages on EU taxes and registration-based taxes in the EU as a starting point as these should give you an introduction to how VAT is charged in the European Union.

I would also recommend checking out our blog post on new EU VAT rules that came into place in 2021. There is a section here which outlines the key considerations for international businesses exporting into the EU.

As per this blog post, all orders shipped to the EU are now subject to VAT and merchants can now charge VAT on orders below €150 to simplify the buying process for their customers. You can register for and use the Import One-Stop Shop (IOSS) scheme to charge VAT to your customers:

The Import One-Stop Shop (IOSS) scheme, also called the Non-Union OSS, is for merchants outside the EU that sell to customers located in any EU member country. After July 1, 2021, you can use the IOSS scheme if you are located outside the EU and sell to customers located in an EU member country, and you don't want your customers to be charged tax upon delivery.

Using IOSS, you can choose to collect VAT on orders equal to or less than 150 EUR at checkout so that your customers don't pay taxes upon delivery.

I believe that doing this will likely be the best and most convenient option for both you and your customers, although please note that Shopify cannot give tailored tax advice and we would always recommend speaking to a tax professional if you are unsure of your obligtations. 

I'd also like to point you in the direct of some third-party resources that might help you gain a better understanding of how to proceed:

• European Commission - VAT identification numbers
• Avalara - Everything you need to know about a EU VAT registration number
• Bean Ninjas - VAT EU: What non-EU businesses need to know

I hope this information helps, but please feel free to get back in touch if you have further questions.

[TeemuEAS]

Hi Baemaya! 

For better customer service ALWAYS make sure your solution does not require post-purchase actions. Only DDP with couriers for the time being or, if below 150€ to EU with IOSS. You only need VAT registration if you are warehousing goods from EU (or UK for that matter). 

For below 135£ sales to UK you should register for VAT. You can do it here: https://www.access.service.gov.uk/login/signin/creds?aoc=Y

For EU IOSS registration we we can help, as you are a non-EU company you will need an intermediary and self-registration is not possible. 

We re commend you have a look at our solution and blogs for a crash course at www.easproject.com 

[Kristina1907]

Hey Baemaya, perhaps your question is still relevant to you...a great service can be provided by Lovat https://vatcompliance.co/vat-guides/

I hope it helps you to manage properly your business.