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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.