{"id":9547,"date":"2020-06-05T08:52:35","date_gmt":"2020-06-05T00:52:35","guid":{"rendered":"https:\/\/www.zhenhub.com\/?p=9547"},"modified":"2022-10-07T18:24:33","modified_gmt":"2022-10-07T10:24:33","slug":"guide_to_vat_ecommerce_retailers_europe","status":"publish","type":"post","link":"https:\/\/zhenhub.com\/blog\/guide_to_vat_ecommerce_retailers_europe\/","title":{"rendered":"The Ultimate VAT Guide for Ecommerce Retailers in Europe"},"content":{"rendered":"

Reading time:\u00a0 3 min 45s\u00a0<\/em><\/p>\n

The Ultimate VAT Guide for Ecommerce Retailers in Europe<\/h3>\n

The EU is a massive market for retail sales.<\/p>\n

But ecommerce retailers have to understand the basics of EU VAT rules along with applicable VAT on online sales when selling into Europe. This is important to avoid unwanted risks and complications. These risks could come in the form of delivery delays that could affect customer experience as well as costly penalties that can affect your bottom line.<\/p>\n

Ecommerce sales in Europe peaked at 621 billion in 2019, according to ecommerce News<\/a><\/u>. If you\u2019re eyeing a piece of this cake, this guide has been compiled to help you get started.<\/p>\n

What is VAT?<\/h3>\n

According to Investopedia<\/a><\/u>;<\/p>\n

Value Added Tax is a consumption tax levied on products at every stage of the supply chain, where value is added. <\/em><\/p>\n

It is known as good and services tax (GST) in some countries and unlike the sales tax in the US that is only charged on the final consumer, VAT is paid by everyone involved from production to the point of sale. These include raw materials suppliers, product manufacturers, distributors, retailers, and the final consumer.<\/p>\n

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Key EU VAT rules<\/h3>\n

The VAT is applicable to almost all EU member states.<\/p>\n

Everyone from taxable individuals to businesses and corporate entities is liable to VAT. However, governments and public offices, and a few EU territories like Gibraltar, Channel Islands, and the Canary Islands are exempted from VAT.<\/p>\n

VAT is applicable to most sales and purchases made in the EU by companies based in the EU. However, insurance, postal services, and medical care services are often exempted from VAT.<\/p>\n

Exports to non-EU countries are also exempted from VAT if you can provide evidence of such exports. There are usually broad EU VAT Directives although member states still enjoy some sort of flexibility to apply them differently.<\/p>\n

VAT rates in Europe<\/h3>\n

Countries in Europe have different VAT rates.<\/p>\n

The VAT rate applied in any EU country will depend on the type of goods. You can check VAT rates online at Avalara<\/a><\/u>. Better still, you can confirm at your local VAT office.<\/p>\n

That said, here are the different types of VAT rates in Europe;<\/p>\n