Essential Knowledge - Ecommerce Sales to Private Consumers in the EU

1)    An EU VAT registration is needed for any non market place distance sales from the UK to the EU

Distance selling (selling without face-to-face contact) from the UK into the EU requires EU VAT registration.

Note - if selling via an online marketplace like Amazon Marketplace or Ebay, it is normally the online marketplace (as opposed to the seller) that is required to register for, collect and pay the VAT on the sales.

2)    How does a UK business register for EU VAT?

A UK business will need to select an EU member state with which to register for VAT, submit returns and make payments. 

Where selling to individuals in more than one EU member state, online sellers can use the One Stop Shop (OSS) portal in order to manage their VAT duties in one place. That is – quarterly returns are submitted for using this tool.

3)    I’m only a small business with a very low turnover – should I be concerned with EU VAT?

 Even if below the VAT registration threshold in the UK (£85,000 per annum) any sales to private consumers in the EU will be subject to One Stop Shop rules. Therefore, a registration in a selected member state must take place.

4)    OK, I now have a clearer idea about my responsibilities, what should I do next?

i)               Speak to your accountant! Reporting of EU sales for VAT purposes is a complicated area of tax legislation so it’s best to get advice that is specific to your circumstances.

ii)              Ensure you are separating sales made through your own website vs online marketplaces – so you know which sales you have to lodge through the OSS