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Most complete EU countries VAT tutorial for shopify dropshipping

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According to the statistics, the population of Europe, Germany, France, West and Italy has more than 300 million people, including more than 68 million in the UK and more than 80 million in Germany. The sales volume of these two countries accounts for 60% of the total sales Amazon Europe. France, Italy and Spain account for 40% of the three countries, although the scale is small, but e-commerce development is fast, competition is relatively low, there are more than 174 million potential customers, is a high-profit market for shopify dropshipping business. You should know the VAT rules if you want to sell goods to those EU countries especially you are selling on Amazon.

What’s VAT?

VAT (Value Added Tax) is a kind of turnover tax levied on the value-added of taxpayers’ production and management activities.  Take United Kingdom for example, when goods enter the UK, the goods are subject to import duty (mainly import value-added tax); when the goods are sold, the merchant can apply for the customs value-added tax (Custom Duty)  return as an input tax application, and then pay the corresponding tax by sales.

VAT applies to import, commercial transactions and service activities generated within the UK. It also applies to sellers who use overseas warehousing (such as AMAZON, EBAY Shopify sellers) because your products are shipped and completed deal within the UK. The goods were already sold in the UK at the time of sale and the goods were not imported into the UK by British buyers (customers). That is: merchants using UK warehousing services are required to pay VAT according to law.

The VAT status and specific information can be found at the following website:

http://ec.europa.eu/taxation_customs/vies/vatRequest.html

Why you need to pay VAT:

  1. If you do not use your VAT tax number when exporting goods, you will not be able to refund the import tax;
  2. If it is found that borrowing someone else’s VAT or VAT tax number is invalid, the goods may be detained and cannot be cleared;
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