Access a community of over 900,000 Shopify Merchants and Partners and engage in meaningful conversations with your peers.
I hope someone can assist (sorry if this has been asked already, I am new to drop-shipping and shopify if so please direct me to the thread or url 😉 )
Could someone please explain how VAT/Taxes work with drop-shipping in the following situations (scenario to be considered after the 1st of July 2021 EU introduction of the new VAT E-Commerce Package):
1. Non-EU, non-registered company/sole proprietor (don’t meet the sales threshold required to register for VAT in own country), with a drop-shipping supplier/manufacturer in Germany:
A. Do I need to charge VAT to my EU customers – let’s say French as an example (if intra-European cross border sales are under 10,000 euro)?
i. If yes, what VAT rate (my own country VAT rate / German VAT rate (supplier location) / French VAT rate (customer location).
B. Do I need to charge VAT to my EU customers – let’s say French as an example (if intra-European cross border sales are over 10,000 euro)?
i. If yes, what VAT rate (my own country VAT rate / German VAT rate (supplier location) / French VAT rate (customer location).
C. Could my EU customers expect to have to additionally pay import VAT when receiving the product?
i. If yes, is there a way to determine this price and inform the customer accordingly?
ii. If yes, is there a way to take on this cost, so the customer does not?
D. Do I need to report intra-European cross border sales using the Import One Stop Shop or the One Stop Shop?
i. Is this based on where my company/sole proprietor is located or is it based on where my drop-shipping supplier is located?
2. Non-EU, registered company (meet the sales threshold required to register for VAT in own country), with drop-shipping supplier/manufacturer in Germany:
A. Do I need to charge VAT to my EU customers – let’s say French as an example (if intra-European cross border sales are under 10,000 euro)?
i. If yes, what VAT rate (my own country VAT rate / German VAT rate (supplier location) / French VAT rate (customer location).
B. Do I need to charge VAT to my EU customers – let’s say French as an example (if intra-European cross border sales are over 10,000 euro)?
i. If yes, what VAT rate (my own country VAT rate / German VAT rate (supplier location) / French VAT rate (customer location).
C. Could my EU customers expect to have to additionally pay import VAT when receiving the product?
i. If yes, is there a way to determine this price and inform the customer accordingly?
ii. If yes, is there a way to take on this cost, so the customer does not?
Any feedback is much appreciated.
Connect your PayPal account to allow your customers to checkout using the PayPal gateway a...
ByYour online store speed can enhance your store’s discoverability, boost conversion rates a...
ByShopping is at our fingertips with mobile devices. Is your theme optimized to be user-frie...
By