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How to Deal With a Vat Inspection

How to Deal With a Vat Inspection

November 17, 2018


1.Expansion into European Markets Is an Op for Digital Marketers and Business Alike Recent reports from the European B2C found the following information: You will find that in Europe you have over 296 millions people buying products online and spending over 1,800 dollars a year. You will notice that even with that information you still have some very important VAT rules and regulations that you have to abide by. With that being the case, we have decided to come up with eight times that we presented at SimplyVAT earlier this year to make compliance easy.

You will find that unlike what the vision is each country in the EU will have its own VAT rules. This means that you will have 28 different counties that you will have to file with, but also figure out how they are going to collect and how often they will collect the VAT information. If you want more info check out this gap report.


2. When you are using Amazon you will notice that they have five marketplace in the EU and have 31 centers to help distribute your products. This allows Amazon to have amazing access to the European market, which is growing at 12% each year. You will notice that you have five different options to start off your European campaigns.


3. When you do ship over your inventory you will have to pay the EU VAT upfront, but it is often paid at the first point of entry and then it is only if your goods are above the consignment threshold of roughly 20 dollars. You will have to figure out who is going to be responsible for all the import charges if it is going to be your or the customer.

If you have never exported before, then you have not had the charges yet, but it is most likely that the customer will be seen as the importer of record. This does not really help the customer or provide them a good experience because it often means they have to pay the EU VAT before they can get the package.

The other option you have: You will want to voluntarily register for the VAT which allows you to be seen as the importer of record. You will already be sending the goods with the duty already being paid, which means your customer will not be impacted by the taxes. Becoming the importer of record will be a lot better for your company than having to deal with a ton of returns or even the loss of customer base because of upset customers.


4. When you are exporting to Europe you will need to get an Economic Operator Registration and Identification number, which you can use throughout all of Europe to be identified as the importer of the products. You will need to use this number and use it as it will identify yourself as the person or business who is importing the products. You will want to look into obtaining an EORI here.


 

5. If you are going to store an inventory in the EU you will have to have a VAT registry to show your stock and this makes it easier to trigger the automatic obligation. If you are using the Amazon fulfillment center you will notice that it is going to be easier for you to have only one VAT registration and that is where your inventory is being held. If you are carrying stock in multiple places, though, you will notice that you will have to get a VAT in several countries. You will notice that the PAN EU FBA is going to require you to register on all countries. You can use an Amazon API for VAT to help you.


6. You will also need to make sure you have legal representation in the countries that you are going to be shipping to that are not part of the EU as you my have to have some type of fiscal representation to register and this is very true in France, Italy, and Poland. You will find that you are jointly responsible for all the VAT owed on the product. If you are a non-EU company you may have to get the bank to guarantee or have fees that are higher. You will notice that this is going to be a good option to avoid having this issue. If you are registered in the UK you will have the EU-to-EU rules only to follow.


7. You will notice that the marketplaces do not take responsibility for the EU VAT Marketplaces and they do not take any of the responsibility for getting the taxes from the customers and what is even worse is the governments are starting to crack down on the collection of taxes. You will notice that because of the loss of 193 billion Euros in 2011 from undeclared VAT the government had to crack down. You will notice that if you are not paying your taxes or not allowing for the VAT collection Amazon can shut down your store. So you want to make sure you are ahead of the games to avoid any serious problems.


8. You will find that from March of 2019 the UK may not have any type of access to the single market since the Brexit issue started and is supposed to finally happen. If you want to have access to the UK market, though, you will need to get a UK VAT registration even if you have one in the EU or using Amazon. As you can see making sales in the EU can be a huge chance for growth in the European markets. You will find that you will want to make sure you plan and prepare properly or you could have some big punishments. Using the tips you will be able to avoid all of these problems. Then you can star to expand with confidence.