How does VAT handling work worldwide on new e-commerce platforms?

How does VAT handling work worldwide on new e-commerce platforms?

johanlittorin
Visitor
1 0 0

We're selling a product with one part hardware and one part subscription. 

 

We're currently using Fastspring which makes VAT handling very easy (basically, Fastspring sells the product to the end consumer and collects/reports/pays VAT to each market). 

 

How does this work for me when switching to Shopify? I'm assuming there are reports, but what else is needed to complete the whole cycle (collect VAT from user, make reports, pay VAT to each market).

 

Thanks.

Reply 1 (1)

Rostislav
Shopify Partner
196 12 31

 

Hi,

It all very much dependent on the merchandise that you sell and you location. IF you are in US, the UK or any other Non - EU country , technically you have two different EU VAT schemes to be applied - IOSS (for physical goods) and Non-Union OSS (for downloadables). Additionally , if you have orders over 150 EUR for physical goods you would have to go DDU (with basic or standard Shopify) or possibly with DDP (Advanced Shopify plan plus a logistics partner that supports DDP).  I do not know how Fastspring handles it today , since they seem to have little to do with physical goods.

In standard Shopify yoy will not be able to accomodate the use of the both VAT Schemes.  If you install our application EAS EU  VAT complience , you will be able to use both schemes. 

If you are an EU established comapany situation is a bit easier for you  - it is OSS VAT scpecial scheme which can accomodate both physical goods and downloadables.  Then it is easier with Shopify but you still need registration for OSS and have to be very careful about you fixed establishments statuses . I cannot tell you more unless I have more understanding on the scope of your business. 

We are EU VAT complience IT company , check us here www.easproject.com . If you need help or IOSS registration book a meeting with us here

www.easproject.com - the best EU and UK VAT compliance solution.