Do European independent websites need to pay VAT? What is the difference between paying VAT on platforms?

There are still many merchants doing cross-border e-commerce now. In fact, cross-border e-commerce is divided into several modes. One is the independent station model, and the other is the traditional platform-dependent store. So do cross-border e-commerce merchants doing independent station model in the European market need to pay VAT?

Do European independent sites need to pay VAT?

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According to UK and EU laws, independent site sellers need to register for a VAT number and pay taxes if the following conditions are met.

(1) Annual sales exceed the distance sales threshold of the UK or the EU (after July 1, 2021, the distance sales threshold of the EU will be adjusted to the general threshold of EUR 10,000);

(2) Using European warehouses to store and sell goods in Europe;

(3) The company is established in a European country.

What is the difference between VAT paid by the platform?

Taking the UK as an example, the platform will charge a VAT fee of 20% (standard tax rate). Some platforms will display this fee to customers separately, while others will display it in the original selling price. Customers need to pay this part of the fee.

Platform sellers need to provide the corresponding VAT number when clearing customs. After the platform collects VAT on behalf of the tax bureau, it will make a unified declaration with the platform as the main body. All the seller's data on the platform will be stored for 6 years for subsequent inspection.

Note: All platforms withhold and pay taxes according to the standard tax rate. For platform sellers using low tax rates, it is recommended that you exit the low tax rate.

Cross-border e-commerce stores with independent sites in Europe need to pay VAT because this is the legal requirement in Europe. Therefore, as long as you do e-commerce there, you need to pay this tax. Generally, merchants with independent sites are required to register a VAT tax number, which makes it more convenient to pay taxes.

Recommended reading:

How to open an independent cross-border e-commerce website? How to promote an independent website?

What products are good for independent sites? Detailed introduction

Can independent sites check logistics information? What is the method?