As of January1, 2021, England, Wales, Scotland, Jersey and Guernsey have become Éthird countries of the European Union. We give you a feedback one year and a half later and propose you new solutions for the problems encountered concerning dropshipping from UK!
European e-tailers who dropship from the UK
Direct sales through their own website of packages worth less than 150€.
The operation is subject to an import VAT exemption. On the other hand, the e-merchant must invoice his customer including VAT in the country of the purchaser.
The e-merchant must register with IOSS (Import One Stop Shop) in his country of establishment, declare and pay the VAT collected at the rate applicable in the various countries where he sells.
Direct sales through their own website of packages worth more than 150€.
The e-merchant must register for VAT in the buyer’s country. He must then pay the import VAT and invoice the final customer including VAT in the country of the buyer.
The e-merchant can deduct the import VAT and pay back the collected VAT via his VAT number and his local VAT return.
Sales through a marketplace of packages worth less than 150€.
The operation is subject to an import VAT exemption. On the other hand, the e-merchant must invoice his customer including VAT in the country of the purchaser.
VAT is collected, declared and remitted by the marketplace through its own IOSS portal.
Sales through a marketplace of packages worth more than 150€.
The e-merchant must register for VAT in the buyer’s country. He must then pay the import VAT and invoice the final customer including VAT.
The e-merchant can deduct the import VAT and pay back the collected VAT via his VAT number and his local VAT return.
In practice
E-merchants who make both sales below and above 150 euros via a marketplace must be careful to distinguish between the two types of operations, which have different applicable VAT regimes.
Indeed, very often, e-merchants treat the two types of operations in the same way and pay VAT to the Administration regardless of the value of the package.
However, below 150 euros per package, it is up to the marketplace to pay the VAT. If the e-merchant also pays VAT on the same transaction, there will be double taxation.
