How To Tell On Companies House If They Are Vat Registered

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Imported from Asia to the EU, or selling cross-border? In this guide, we explicate what importers, Amazon sellers, and cross-border east-commerce companies must know about the Value Added Tax (VAT) in the Eu.

We also collaborated with Alex Wyatt from SimplyVAT and Dr. Matthias Oldiges from KMLZ, two of Europes leading experts, to create this comprehensive VAT guide.

This is covered

VAT calculations for European importers
VAT rates in EU member states
How and when to pay VAT
VAT registration for European union companies
VAT registration for non-Eu companies
VAT when dropshipping products
VAT when selling products online inside the EU
VAT registration when selling from overseas to the EU
VAT when selling on Amazon

What is Value Added Revenue enhancement (VAT)?

The VAT is a consumption tax in the European union. In B2C transactions, VAT is always included in the cost. If you, for example, purchase a product online from an EU based online store, the price you pay includes VAT.

The seller can then subtract the VAT paid on imports, from VAT added on top of the sales price.

Below follows an instance:

Sales: $10,000 (Including VAT, 20%)
Expenses: $v,000 (Including VAT twenty%)

This allows us to make the following adding.

Sales VAT: $2,000
Paid VAT: $1,000
Total: $two,000 – $1,000 = $1,000

Thus, I would need to pay a VAT of $ane,000. If I'd spent more on VAT than I added on top of my sales, I would instead go coin back from the land.

However, when importing goods from China, you can't pay the VAT directly to the supplier. Just because Chinese businesses belong to a different revenue enhancement organisation, and are not VAT registered in the EU.

When importing products, the aforementioned principle applies. If you pay more VAT on your imports than y'all add on your sale price, you'll go a refund.

VAT forms

What is the customs value?

As the VAT calculation is based on the customs value, you need to be familiar with this term to understand the examples provided in this article.

In the European Union, the Community Value is the total sum of the products (including evolution costs paid to the supplier) and shipping to the edge.

Below follows an overview:

Ever included in the customs value

Product toll (as paid to the supplier)
Insurance
Shipping price to the Port of loading

Sometimes included in the Customs Value

Tooling and molds
Product samples
Design services (and related evolution services) paid to the supplier in China

Non included in the Customs Value

Transportation fees within the Eu
Fees and services paid in the Port of Loading

Exercise I need to pay VAT when importing from Asia to the EU?

Yeah, importers must pay VAT on top of the total sum of the Customs Value and the Import Duty.

The VAT is paid to the state, in the country of entry and according to the local rate.

If I import goods to Kingdom of spain, I pay VAT in Kingdom of spain, co-ordinate to Castilian VAT rates. If I am based in the Uk, I pay the Britain rate, to the HMRC, and so on.

How tin I summate the amount of VAT I must pay?

Yes. However, before you tin can practise that yous must know the following factors:

Customs Value
Import Duty Rate
VAT Rate

Beneath follows an case:

Community Value: $ten,000
Import Duty: 5% ($500)
Sum: $10,000 + $500 =$10,500
VAT Rate: 20% (UK Charge per unit)
Total VAT: 20% x $10,500 = $2100
Full Amount: $x,500 + $2100 = $12,600

How exercise I brand sure I pay the correct VAT amount?

As mentioned, the VAT is calculated as a percentage of the customs value. As such, yous have to ensure that the right customs value is alleged on the bill of lading, packing listing, commercial invoice, and other relevant documents.

Don't assume that your supplier, or even forwarder, know how to calculate the customs value.

Is the freight cost subject to VAT?

Yes, in the European union, the customs value includes the aircraft costs upwardly to the arrival in the port of destination.

Yet, any logistics costs that arise within the European union, such as unloading and community clearance, shall non be included in the customs value.

That said, the forwarder will all the same add together VAT on the invoice, simply that is paid separately.

Tin I pay VAT to the Chinese supplier?

No, you should non pay Eu VAT to any non-EU entity, equally they are not VAT registered in the European Union.

Neither shall yous pay China VAT, equally the supplier in China receives a VAT refund when exporting products.

What is the VAT charge per unit in my state?

So far, each European union member land sets its ain VAT rate. Each land can also prepare different VAT rates for different products or services – or fifty-fifty implement exemptions (0% VAT).

All the same, most products are taxed co-ordinate to the standard VAT rate. You lot can find a full listing hither, or see the list below for a few EU states:

United Kingdom: xx%
Sweden: 25%
Italy. 22%
Germany: nineteen%
Netherlands: 21%
France: 20%

When importing from China, how and when do I pay the VAT?

At that place are 2 means to pay VAT when importing appurtenances from China:

a. Pay VAT upon arrival in the Port of Destination

About Freight forwarders offer Community clearance as a paid service. As such, they help you declare Customs duties and VAT to the local authorities.

The Freight forwarder invoice the heir-apparent for the total amount (Import duties and VAT).

b. Declare the importation value on the quarterly or yearly VAT declaration form

All VAT registered companies in the European Union must fill in a quarterly or yearly (sometimes even monthly) VAT announcement.

In the VAT course, there are fields for declaring the total amount of Imported appurtenances, from which the local revenue enhancement government can summate a VAT corporeality.

The benefit is that the importer tin can then start this corporeality directly from the amount of "sales VAT".

Do I need to get VAT registered before importing from People's republic of china?

This depends on the regulations in your country, as each Eu fellow member state set their own VAT rates and VAT registration rules.

For example, in the United Kingdom, companies are simply required to get VAT registered once they reach a certain yearly acquirement (effectually Gross domestic product lxxx,000).

Yet, Uk companies must nonetheless pay VAT on imports from outside the EU, regardless of their revenue.

Hence, we recommend that y'all go VAT registered in your land, and a third country in instance you lot will import the goods to another Eu fellow member country.

Tin I deduct the VAT we've paid?

Yes, the corporeality of VAT you pay on your imported goods tin be subtracted to the amount of VAT you lot shall pay on meridian of your sales invoices.

Example:

Company A is based in the UK and imports products valued at $20,000 from a supplier in Hong Kong. During the kickoff year, they but manage to sell goods valued at $fifteen,000. This gives u.s. the following:

Sales VAT: $fifteen,000 x 20% = $3,000
Paid VAT: $20,000 x xx% = $4,000
Residue: $3,000 – $4,000 = -$1,000

Given that they've already paid in more than the amount they are owed, Company A is eligible for a VAT refund. Nevertheless, this may be reduced to naught in some cases.

Do I demand to pay VAT when buying product samples?

Yeah. There are two ways VAT can be paid when ownership product samples:

a. Upon inflow in the EU member state
b. Declared equally role of the Customs value of the starting time shipment

Are there any exemptions for importers?

Some EU member states set VAT thresholds betwixt x euros to 22 euros. Hence, small sample orders may pass through without VAT being added.

Do the Community authorities add VAT to every shipment?

No, information technology's up to the importer to properly declare the value of the imported goods in the quarterly or yearly VAT declaration.

Exercise you have more than questions well-nigh VAT when importing from China to Europe?

Write your questions in the comment class below, and we will add together them to this article.

Is the VAT rate ready based on the origin country?

Unlike duty rates, which can vary based on the country of origin, the EU VAT charge per unit is fixed. As such, you'll pay the same VAT on your imported products from China, as from Vietnam or the United States.

We are based in the European union, and dropship products from China back to customers in Europe. Who pays the VAT in this case?

Technically, the Importer shall pay the VAT. When y'all dropship products, your customer is the Importer, which therefore must pay VAT.

In reality, however, the community authorities don't take resource to add import duties and VAT on the tens of millions of e-packets coming into the European union, from Aliexpress, Wish and other dropshippers each year.

A likely scenario is that the tax authorities will go subsequently dropshippers.

VAT for East-commerce and Amazon Sellers in the EU: By SimplyVAT

Alex Wyatt

In the European Marriage, you must pay VAT on both the imported products and add VAT when selling to customers in various Eu member states. Given that at that place are 28 EU member states, all with their own VAT rates and registration procedures, it tin can exist mind-numbing to get a grip on how VAT actually works when importing products from Asia – and selling them in the EU.

And then, why not just ask an skillful, such every bit Alex Wyatt at SimplyVAT?

Said and done, we wrote a list of questions that comprehend all major VAT scenarios:

a. Importing to State A and selling in Country A

b. Importing to Country A and selling in Land B

c. Visitor in Country A, importing to Country B and selling to Country C

d. Non-Eu companies importing to, and selling in, an European union member state

Alex, please tell the states a scrap nearly what yous do at SimplyVAT

After starting at SimplyVAT just over a year ago, I now pb the business development team in the UK and Mainland china.

SimplyVAT helps eastward-commerce sellers VAT register and comply in all 28 Eu countries and Canada. Nosotros provide our clients with a proactive approach to their VAT needs to assist their businesses abound internationally, and sustainably.

Say that I am based in the United kingdom, and importing products to the UK. How and when do I pay VAT?

If your company is based in the UK, and y'all are importing stock and holding products within the UK, there are a few things to have note.

As a UK registered company, you do not have to VAT register until you have reached £85,000 turnover inside a 12 month period. During this time, you lot do non charge VAT on your products nor can you reclaim import VAT. Equally a Uk company, you will even so exist required to include corporation tax on profits in your margins.

You tin can also voluntarily VAT register before you accept reached £85,000. Once VAT registered, in that location are ii types of VAT you should be aware of:

Sales VAT
Import VAT

Sales VAT

There are 3 dissimilar rates of VAT in the UK: standard rated, reduced rated, and zero-rated. It is important to look into your specific products to ensure y'all are charging the correct VAT rate on your products.

In the instance that your products are standard rated, you will include twenty% VAT in the cost listed online. Within the EU, VAT is not included on check-out and should be included in your margins shown on the sale price.

Import VAT

Import VAT is paid on the cost value of the goods and is based on the country you are importing into in social club for your appurtenances to clear customs.

For example, in the United kingdom of great britain and northern ireland, yous would pay xx% import VAT and if you are VAT registered, you tin reclaim the import VAT paid when filing your VAT return. This means that your import VAT is offset against the sales VAT on your VAT return. If you have greater import VAT than sales VAT, you will receive money back from the Tax Authorities.

If you have greater sales VAT than import VAT, your import VAT will exist deducted from the money you lot've nerveless on sales VAT, significant you lot only give the total of Sales VAT minus Import VAT.

What if I am based in the Britain, but want to ship to (and distribute from) Federal republic of germany. How do I pay VAT in this case?

In general across the Eu, property stock in an EU country triggers an automated obligation to VAT register. This means if you lot are moving your stock into a High german fulfilment centre, yous must VAT register before moving your stock into Germany. The same applies in all 28 EU countries – holding your stock in an EU state creates a taxable supply and should be taxed nether the local VAT rate.

All products sold from the German VAT number (whether it be standard or reduced rated) will be paid to the High german Tax Authorities afterwards the VAT return is filed monthly.

One company can have multiple VAT registrations beyond the European union. It does not thing if your company is based outside the EU or inside the EU. It is important to sympathize that your company is liable to be VAT registered in each EU country where y'all hold your stock and/or where y'all surpass the distance selling thresholds.

Importing into Germany

There are many ways you can import into Federal republic of germany and your VAT obligations come from the country where yous are importing from.

For case, if you lot are importing your appurtenances from outside the EU into Germany, yous volition pay import VAT – which you tin can claim back when y'all file your VAT return.

If you are importing your goods from some other EU country, such as the UK, in that location are boosted reporting obligations that must be filed to certificate the movement of the taxable supply from 1 European union land to another.

These are called EC Sales Lists and are filed in the outbound country. Additionally, once your Intracommunity movements and sales accomplish specific arrivals and dispatches thresholds, you will also be required to file monthly Intrastat reports.

Exporting From Frg

All European union countries are governed past the Altitude Selling Rules. These are when you are belongings stock in one European union country, and selling directly to private customers in another European union country.

Yous will charge the VAT rate where your products are being held until set up thresholds are reached. Each country has its own threshold. For example, France, Italy, and Espana are all €35,000; Frg, the Netherlands, and Luxembourg are €100,000; and in the UK it is £seventy,000. Once you lot accomplish the threshold within a calendar year, yous must VAT register in that specific country.

For example, if you are selling from Germany into Spain, y'all will include Germany's VAT charge per unit and pay the German taxation authorities until you have reached €35,000 worth of sales in Spain within a agenda year.

Which VAT rate applies if I sell from my country to another Eu country?

As stated higher up, you lot are governed by the altitude selling rules until yous accept reached the inbound country's specific threshold. Before reaching the threshold, you are applying the VAT rate in the outbound state (where the stock is being held).

After the threshold has been passed in a specific country, you must VAT register in that country, and begin applying the local VAT rate for your product.

Does this mean that I demand to pay VAT in each and every land I sell to?

Yes, yous do. Unfortunately, the VAT system is not centralised. You must declare your sales in each country where yous are VAT registered. This differs if you are selling digital services so delight brand sure to ask this applies to yous.

The difference with digital services is that these come under VAT MOSS where the VAT rate is dependent on where the client is based. Only one VAT registration is required for the provider of the digital service and collects the VAT from where the customer is based. Once a return is filed, the VAT is paid to i tax dominance to afterward be divided between the tax authorities.

What virtually overseas (non-European union) companies. Do they need to add VAT when selling to the European union, even if their stock is not there?

If you are not belongings stock within the EU, you exercise not require a VAT registration. If yous are importing directly to the client, and the importer of record is listed as the customer, you will not exist required to pay any VAT or exist VAT registered.

In this case, the customer volition have to pay any import duties in order to receive their product so it is best to be transparent about the added costs.

Otherwise, you are able to become the importer of record and voluntarily VAT register. Once you lot are VAT registered, all products must include VAT in the sales cost unless they have been approved to be exempt by the specific tax authority.

What if an overseas (non-Eu) company wants to sell on Amazon.de, using a local fulfillment center. Hence, they must import the products to the EU before selling. How practice they pay VAT?

Before moving your products into the Eu – and in this instance, Germany – you must be VAT registered. In one case you are VAT registered, you will apply the VAT rate in your sale price and collect the VAT on behalf of the government.

Then, a VAT return must be filed (in Germany it is monthly) where you declare your total sales and imports. Once the return if filed, you will pay the government the corporeality specified on the return.

When looking at import VAT, your freight forwarder should help you lot pay the import taxes in order to clear customs.

Tin non-Eu visitor import products and pay VAT without an European union entity or do I demand to register a visitor?

Yes, yous can!

As stated above, y'all can import and pay VAT without having an Eu entity.

One thing to note is that as a not-EU company, specific Eu countries require a Financial Representative in society to VAT register.

Fiscal Representatives are jointly and severally liable for the VAT owed past a non-EU company. Typically this will mean extra fees and depository financial institution guarantees when operating in countries such as France, Italy, Spain, Poland, and many more.

And so, how do I find a Fiscal Representative in the European Union?

You can do your own research to observe financial representatives in each country yous crave, or you can employ a tax bureau, such as ourselves, who has relationships with many local fiscal representatives and will keep all correspondence in i location.

Thank yous Alex. How tin our readers learn more about your services?

I hope this commodity has cleared upwardly a bit of the mystery backside international VAT. SimplyVAT is ever available to assistance answer questions and provide a fully managed VAT service including VAT registration, return filing, and an all-inclusive software. Visit world wide web.simplyvat.com or email heretohelp@simplyvat.com to speak to one of the team members!

European union VAT Registration for American and Asian Importers: By KMLZ

Matthias Oldiges

Businesses in the Usa and Asia importing or selling products to the European union must become their act together when it comes to Value Added Tax (VAT). Yet, agreement how to annals and pay VAT, as a non-European visitor, is complicated.

As such, we decided to ask one of the Europes leading VAT experts, Dr. Matthias Oldiges – Managing Associate at KMLZ (Küffner, Maunz, Langer and Zugmaier) in Munich.

These topics are covered:

1. VAT when selling cantankerous-border (B2C) to customers in the European Union as a non-EU company

2. VAT when importing into the European Matrimony (i.east., Amazon FBA) every bit a not-EU company

3. VAT threshold in different European union states

4. How to go VAT registered as a non-EU company

5. How to pay VAT as a not-EU company

Matthias, how did y'all end up working for KMLZ?

Y'all tin can know something about everything or know a lot near something. KMLZ decided on the latter and concentrated on VAT law, customs police force and criminal police. I wrote my doctoral thesis on a VAT legal topic.

This ultimately led me to KMLZ, where I have at present been working as a lawyer (Managing Acquaintance) for virtually six years. We advise our clients on VAT and customs constabulary-related matters within Europe, every bit well every bit worldwide.

Our stiff network of experienced and leading VAT experts, in all Member States of the European union and beyond, enables us to provide our clients with international advice at the highest levels.

Permit's say that a US or Asian company desire to sell cross-edge (B2C) into the European union, practise they need to go VAT registered?

This depends on the individual case. The answer to the question of who is liable for import VAT is decisive. The person who lodges a customs proclamation is liable for import VAT. Therefore, it is very important that the seller and the customer agree on this question in the purchase agreement (east.g. [Website] Terms & Conditions).

The purchase agreement should cover the question of which party (seller or customer) is responsible to gild the community declaration in the Eu Member Land of importation. In this context, please see the following scenarios:

If the United states or Asian company (or their respective agent) lodges the customs proclamation in the EU, the The states or Asian company (or their corresponding agent) is liable for import VAT in the relevant Eu Member State.

The sale to the customer is deemed to be within the scope of VAT in the customer's Eu Fellow member State.

In this case, the The states or Asian company is required to register for VAT purposes in the customer'southward EU Member Country and to declare the sale in the VAT render of the Member State of importation.

Withal, the U.s. or Asian visitor tin can avoid the need for VAT registration in the European union Member State of importation. This is the case if the parties concur that the customer is responsible to lodge the customs declaration in the European union Member State of importation.

In this example, the customer is liable for import VAT in the said EU Member State. Consequently, there is no seller's obligation to register in the EU Member Land for VAT purposes.

Now, let'due south presume that I want to import goods into an EU country, and sell on Amazon.com. I guess this requires VAT registration?

Yes. Normally, you lot tin import appurtenances into an EU Member State and store them in an Amazon fulfillment centre.

In lodge to be able to be placed in a community process, the not-Union goods must be presented to community. The presented goods are and so declared for a community procedure. A community announcement must be submitted in order for this to accept place.

This is regularly submitted electronically using the ATLAS arrangement for electronic customs clearance, and will be until such time as a uniform Information technology organization for the whole of the European Union is in place. Announcement formalities must exist carried out by a company registered in the European union.

Submission of the customs declaration by a representative, such equally a forwarding agent, is permitted. Companies from non-Eu countries are allowed to submit a community declaration just in very express cases.

The importation is subject to import VAT in Europe. Even so, y'all tin deduct the import VAT in your VAT return. Therefore, in general, the importation is neutral from a cash perspective.

The subsequent sale to the customer is within the scope of VAT in the Eu and, therefore, requires a VAT registration in the European union. The subsequent auction to the customer is taxable with local VAT if it constitutes a local supply of goods in the customer's Member State.

You have to invoice the customer with local VAT. Moreover, y'all must declare the sale in your VAT return and must pay the relevant VAT corporeality to the local revenue enhancement authority.

Say that I import and store products in, for example, the Netherlands – merely sell online EU wide from there. Is it enough to go VAT registered in the Netherlands merely?

This depends on the individual example. If yous only sell B2B, y'all practice not demand to register in any EU Member States other than [in this specific example] the Netherlands.

Notwithstanding, in the case of B2C, you demand to register in the European union Fellow member State of the customer if your sales exceed a specific [yearly] threshold.

Thresholds, between EUR 35.000–100.000, be for every EU Member State.

If your sales to a detail EU Member Land exceed the relevant threshold, y'all will need to register for VAT purposes in that EU Member State. Otherwise, if your sales do not exceed the threshold, it is sufficient to be registered in kingdom of the netherlands but.

Is it possible, as a non-European union company, to go VAT registered EU broad?

Unfortunately, this is non possible. Yous are required to use for VAT registration in every single EU Fellow member Country. However, the application procedure is quite similar.

Once I know where to register, how do I actually get VAT registered equally a non-EU company?

VAT registration is a very formalistic process. It usually includes the identification of the competent revenue enhancement authority, training of the required documentation and responding to follow-up questions by the tax authority.

The visitor registering is required to complete a standard form provided past the tax function and, usually, an boosted questionnaire.

The questions contained in the latter relate to the company's business activities and its VAT handling. In full general, the tax authority provides all necessary information for foreign companies on their website.

Okay, so how long does it take to go VAT registered from overseas?

Information technology very much depends on the private taxation office. The registration procedure can accept up to ten weeks. Y'all tin generally say that the registration procedure is probably faster when the application is managed past a contact person in the EU.

How do I pay VAT to so many different countries at a fourth dimension?

Well, if the foreign visitor provides all necessary documentation and clarifies all follow-up questions, the tax authority will grant a tax number.

The registered company is obliged to file its VAT returns under its tax number. In general, the company has to file electronic VAT returns on a monthly basis. If the VAT return results in a liability to make a payment, this payment has to be made to the responsible revenue enhancement role in every EU Member Country.

There is no European union-wide VAT transfer betwixt the EU Member States. However, High german tax offices allow direct debit.

Practice I demand a bank account in the Eu to pay VAT?

No, a not-European union banking concern account is sufficient.

Thank you. How can KMLZ help non-European union companies to solve this VAT riddle?

We offering coordination of VAT registration at the relevant tax function, as well as the filing of all relevant VAT returns in Germany and all other EU Member States, from a single source.

Due to our existing contacts and adept relations with the tax government, we can guarantee the fastest possible registration and compliance with VAT announcement obligations in Federal republic of germany and all other EU Member States.

Specially in Frg, operators of electronic marketplaces, such as Amazon and eBay, are increasingly becoming the focus of the tax authorities. Operators of electronic marketplaces must provide the tax authorities with proof of their Chinese traders' VAT registration.

Otherwise, the Chinese traders will exist excluded from trading on the electronic marketplaces in Germany as from 1 January 2019, at the latest.

Therefore, all relevant traders, who are not yet registered for VAT, must apply for their registration as soon as possible.

A Chinese visitor doing business in Germany must obtain registration in Berlin-Neukölln. Due to our existing contacts and proficient relations with the taxation office in Berlin-Neukölln, we can guarantee a fast registration process and compliance with VAT annunciation obligations.

We are very happy to and in a unique position to help in this regard! Please detect this link for more information about our services.