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Learn more
about distance
selling

 

In this day and age, one of the most promising ways of developing business is a foreign market expansion.


This can be achieved by expanding a scope of services through cross-border distance selling, currently being one of the most popular ways of selling goods – popular, yet subject to a number of tax regulations. It should not however deter anyone who is willing to take advantage of trading across Europe – ensuring a proper procedural compliance is sufficient to avoid criminal liability for breaching the law.


VAT-OSS


Sellers who want to take advantage of intra-EU distance selling through e-commerce must be VAT payers. They declare to deliver goods within European Union to private persons or companies not registered for VAT. It's important to remember that the VAT settlement (in the country of origin or the recipient's country) and the tax-free allowance are subject to, among others, the distance selling threshold, which was lowered to the range of EUR 10,000 as of July 1st, 2021. It is a limit to the distance selling for all European Union countries altogether.


Once this limit is reached, a tax-payer who is operating in a distance selling model is obliged to register in the VAT-OSS system in the country of origing. By registering in the system and filing quarterly VAT declarations, the tax-payer benefits from a simplified process - the tax due from transactions can now be settled with the home country's tax office, which then transfers it to the tax authorities in the EU country of an end-consumer.


After reaching a distance selling threshold in the EU, a tax-payer is obliged to issue sales documents with local VAT rates of the consumer's home country. This means that the VAT number of the taxpayer and the VAT rate of another EU country will appear on the final invoice.


Country-specific standard VAT rates:

 
Austria
20%
Belgium
21%
Bulgaria
20%
Croatia
25%
Cyprus
19%
Czech Republic
21%
Denmark
25%
Estonia
20%
Finland
24%
France
20%
Greece
24%
Spain
21%
The Netherlands
21%
Lithuania
21%
Luxembourg
17%
Latvia
21%
Malta
18%
Germany
19%
Poland
23%
Portugal
23%
Romania
19%
Slovakia
20%
Slovenia
22%
Sweden
25%
Hungary
27%
Italy
22%

 

Intrastat threshold is another type of a threshold. Intrastat is a statistical system which enables collecting information and establish the status of intra-community transactions. After surpassing the threshold in the recipient country, the seller must register in that country for Intrastat and submit periodical declarations, reporting their sales to a given EU country. Intrastat thresholds are set by a local government.


Intrastat thresholds:

 
Country
Arrivals
Dispatches
Austria
750.000 EUR
750.000 EUR
Belgium
1.500.000 EUR
1.000.000 EUR
Bulgaria
430.000 BGN
270.000 BGN
Croatia
2.200.000 KN
1.200.000 KN
Cyprus
180.000 EUR
55.000 EUR
Czech Republic
12.000.000 CZK
12.000.000 CZK
Denmark
6.900.000 DKK
5.200.000 DKK
Estonia
230.000 EUR
130.000 EUR
Finland
600.000 EUR
600.000 EUR
France
460.000 EUR
460.000 EUR
Germany
800.000 EUR
500.000 EUR
Greece
150.000 EUR
90.000 EUR
Hungary
170.000.000 HUF
100.000.000 HUF
Ireland
500.000 EUR
635.000 EUR
Italy
200.000 EUR
0 EUR
Latvia
220.000 EUR
120.000 EUR
Lithuania
250.000 EUR
120.000 EUR
Malta
700 EUR
700 EUR
Netherlands
1.000.000 EUR
800.000 EUR
Poland
4.000.000 PLN
2.000.000 PLN
Portugal
350.000 EUR
250.000 EUR
Romania
900.000 RON
900.000 RON
Slovak Republic
200.000 EUR
400.000 EUR
Slovenia
140.000 EUR
220.000 EUR
Spain
400.000 EUR
400.000 EUR
Sweden
9.000.000 SEK
4.500.000 SEK
United Kingdom (non-EU)
1.500.000 GBP (2021 only)
250.000 GBP (Northern Ireland only)

Selling on Amazon


The sales threshold mentioned above are not the only variable that should be considered. The registration for VAT requirement may also depend on the adopted sales model.


A seller who is selling goods through Amazon - which proves to be a popular method among companies focused on cross-border selling - can opt for direct selling from a warehouse in Poland or for using FBA (Fulfillment by Amazon) service, which enables sending goods to one of Amazon warehouses abroad where they are further dispatched directly to the recipients.


Each of these operating methods is govern by different regulations regarding VAT settlement. For instance, you can place your inventory in Amazon warehouses in seven different countries across Europe, which then calls for registering for VAT in all of them.

 

Why us?


There is a variety of complex reporting obligations that have to be taken into consideration when you are preparing to sell abroad. Deadlines and filing periods for VAT return differ from country to country. Polish VAT regulations not necessarily translate into VAT regulations in other countries. Monitoring all of international sales in order to calculate whether or not you have exceeded the sales threshold in a given country requires additional time and means allotted to it.


When preparing for cross-country trade, it is a good idea to reach out to specialists with many years of experience on international market under their belt. Our team of experts ensures meeting all necessary formalities and compliance with international VAT requirements.


Our experts handle these types of complex issues every working day. We pride ourselves on having many satisfied customers we built a comprehensive, trustworthy partnership with.


Should you have any doubts whether your company could benefit from above mentioned solutions or not, please do not hesitate to reach out to one of our experts to schedule a free of charge and non-binding phone consultation.

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Do you sell your products online?


Are you planning a foreign market expansion of your business? Are you starting selling on Amazon or eBay? Did your company exceed sales thresholds in cross-border selling and you are obliged to register for VAT in the recipient countries?


Aleksandra Ogińska-Nowak
VAT Compliance Coordinator

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