# VAT question - shipping goods from abroad



## doberden (21 Sep 2010)

Hi,

I'm importing goods from the US, storing in a warehouse in Holland, selling online and delivering around Europe (haven't started yet!).  The products will be sold through a website and the company is registered in Ireland.

Do I pay vat in holland and then send out goods with dutch vat rate included in the price or do I use Irish vat rates?

A bit complex I know!

Thanks,


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## Rudolf289 (22 Sep 2010)

*VAT Question, shipping goods from abroad*



doberden said:


> Hi,
> 
> I'm importing goods from the US, storing in a warehouse in Holland, selling online and delivering around Europe (haven't started yet!).  The products will be sold through a website and the company is registered in Ireland.
> 
> ...



Hello Doberden,

Interesting post, I am actually a dutch national, living in Ireland for the past 28 years, involved in the transport and logistics industry for over 30 years. 

Herewith an outline to try and simplify the issues. The critical issue is the place of supply and if your market is business to consumer (B2C) or business to business (B2B). In case of B2C, if I interpret the VAT rules correctly, the place of supply would be The Netherlands as that is where the transportation of dispatch begins. You can opt to register for VAT voluntarily in the EU member state that you are selling into. However, if you exceed the threshold, you need to register for VAT in that member state. If you stay below the threshold of the respective EU member states (and do not register), you need to add Dutch VAT to your sales invoice and remit the VAT on sales to the Dutch VAT authorities. If you register for VAT in the respective EU member state, you add the VAT rate that applies in that member state. 

If the client you sell to is registered for VAT in the EU member state you are selling to (B2B), you can supply him on the basis of 0 (zero) VAT. Your VAT registered client then has the obligation to account for the transaction in his VAT and INTRASTAT returns.

Here is an excerpt from the Irish VAT guide
*Distance sales out of Ireland*
In the case of distance sales made from Ireland the place of supply of such goods is the Member State where the transport or dispatch ends where the supplier has either exceeded the registration threshold in the other Member State or has opted to register in that Member State.Where a supplier has not opted to register for VAT in that Member State the place of supply is Ireland i.e. where the transportation or dispatch begins.
*Example 5*
A VAT-registered Irish trader supplies goods by means of mail-order to a private individual in the UK. If the seller’s level of trade to private individuals in the UK is below the Distance Sales threshold of £100,000 as applied in the UK and the trader has not elected to register for VAT in the UK, the place of supply is the State and, therefore, the trader has an obligation to account for Irish VAT on the goods.

Details of the thresholds applying to Distance Sales in the Member Sales of the EU is at Appendix J.

*Appendix J Distance sales thresholds for EU Member States
*
Austria c 100,000                 Belgium c 35,000
Bulgaria c 35,000                  Cyprus c 35,000
Czech Republic c 35,000        Denmark c 35,000
Estonia c 35,000                  Finland c 35,000
France c 100,000                 Germany c 100,000
Greece c 35,000                   Hungary c 35,000
Ireland c 35,000                   Italy c 35,000
Latvia c 35,000                    Lithuania c 35,000
Luxembourg c 100,000           Malta c 35,000
Netherlands c 100,000           Poland c 35,000
Portugal c 35,000                  Romania c 35,000
Slovakia c 35,000                  Slovenia c 35,000
Spain c 35,000                     Sweden c 35,000
UK c 100,000

some further information on the subject of distance selling ;

*5.11 Mail-order and distance selling*
Distance selling in the Single Market occurs when a supplier in one EU Member State sells goods to a person in another EU Member State who is not registered for VAT and the supplier is responsible for the delivery of the goods. It includes mail-order sales and phone or telesales but does not include sales of new means of transport (see paragraphs 5.6 and 5.7 above) or excisable goods (see paragraph 5.12 below).

An Irish supplier who makes distance sales to customers in other EU Member States who are not registered for VAT, is liable to Irish VAT on such sales until the value of the sales reaches the threshold applying in that other EU Member State (see Appendix J).Once the value of the supplier’s sales exceeds the threshold in a calendar year in the other EU Member State, the supplier will be obliged to register in that EU Member State and account for VAT at the rates applicable there. If the appropriate threshold is not exceeded, the supplier may, nevertheless, opt to account for VAT in the EU Member State to which the distance sales are made. Please see VAT Information Leaflet ‘Distance Sales in the Single Market’.

Example 13
– Irish company making mail-order sales to Belgium of c20,000. Taxed where transport begins viz Ireland.
– Irish company making mail-order sales to Belgium of c40,000.Taxed where transport ends viz Belgium since the threshold in Belgium is c35,000 in a calendar year.
– Belgian company making mail-order sales to Ireland of c20,000. Taxed where transport begins viz Belgium.
– Belgian company making mail-order sales to Ireland of c40,000.Taxed where transport ends viz Ireland. Registration required since the threshold in Ireland is c35,000.

There are some significant implications in what you are trying to set up. I am happy to advise you on the best options on all aspects of your supply chain, including transportation from the US to the Netherlands, (bonded) warehousing, order pick, stock control and despatch, Fiscal representation (all VAT and regulatory formalities in the Netherlands).

Let me know if you need anything further

Best regards,
Rudolf289


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## agnieszka (15 Mar 2011)

I would like to ask a question: how it would be in this scenerio:
Company Ltd reg in Ireland buys products in Poland and sends it directly to UK. What about VAT here? Do I charge VAT on what I buy in Poland or what I sell in UK? The order doesnt even cross Ireland border.


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## yewlands (16 Mar 2011)

who are you supplying the general public or vat registered entities? Different rules apply. What exactly is your business?


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## agnieszka (16 Mar 2011)

This Company is being formed at this moment. It is going to trade in some products needed for production of main products sold to the public. Supplier of this half-finished product is Vat registered and I presume the customer is Vat registered too. Where can I found the rule I could read about them?


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## Rudolf289 (17 Mar 2011)

*VAT Question*



agnieszka said:


> This Company is being formed at this moment. It is going to trade in some products needed for production of main products sold to the public. Supplier of this half-finished product is Vat registered and I presume the customer is Vat registered too. Where can I found the rule I could read about them?



Hello Agnieszka,

This would be a socalled A-B-C transaction. (party A sells to party C but on instruction of party C delivers to party B)

On the basis that all parties (supplier, you and your client in the UK) are registered for VAT. This is how it would work.

Your supplier invoices you on a zero VAT rated basis and sends the goods to the UK. He accounts for the transaction in his VAT return as an Intra Community Supply. He has the obligation the file a VIES return and if he exceeds the threshold of € 635K per annum has to also file an Intrastat return.

You accept their invoice in your administration and account for the VAT in your VAT return as an Intra Community Acquisition. If you exceed the threshold of Intra Community Acquisitions of € 191K per annum, your also file an Intrastat return.

You raise an invoice to your client in the UK. Again, because your client is VAT registered, you issue your invoice without VAT. You account for the transaction in your VAT return as an Intra Community Supply. You have the obligation to file a VIES return and if you export more than € 635K per annum, you need to file an Intrastat return.

Your client in the UK accounts for the transaction in his VAT return as an Intra Community Acquisition. If he exceeds the threshold of € 191K (or equivalent in GBP) he also files an Intrastat return.

I trust this is now as clear as mud (LOL). Feel free to post again if you need any further information

Cheers,
Rudolf289


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## agnieszka (17 Mar 2011)

I am sorry I have only started this subject and I need a picture to understand the situation  So I (B) buy/order products from supplier A and A issues an invoice to me. Then I issue an invoice to customer C. All A B C are VAT registered. NOW: who charges VAT? 'A' charges VAT in his invoice to me B? 'B' charges VAT on the invoice to 'C'? And then can A B C claim VAT back? The goods are delivered directly to C - they don't cross Irish border if it matters. The 'B' company is registered in Ireland. 'A' and 'C' are registered in 2 different countries within EU.


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## Rudolf289 (18 Mar 2011)

*VAT in the EU*



agnieszka said:


> I am sorry I have only started this subject and I need a picture to understand the situation  So I (B) buy/order products from supplier A and A issues an invoice to me. Then I issue an invoice to customer C. All A B C are VAT registered. NOW: who charges VAT? 'A' charges VAT in his invoice to me B? 'B' charges VAT on the invoice to 'C'? And then can A B C claim VAT back? The goods are delivered directly to C - they don't cross Irish border if it matters. The 'B' company is registered in Ireland. 'A' and 'C' are registered in 2 different countries within EU.



Hello Agnieszka,

Because the trade is within the EU but between different EU member states, NOBODY CHARGES or PAYS VAT on their respective invoices (neither party A, party B or party C).

They all account for the transactions in their respective VAT, VIES and Intrastat returns as appropriate. 

So, on the (zero rated VAT) invoice you receive from party A, you account for the VAT liability in box T1 in your VAT return. However, because the Intra EU Acquisition from part A is entirely for your business use, you claim a deductible for the same amount in the same VAT return in box T2. You also show the total value of your EU acquisition in box E2 of your VAT return.

Party A in his respective VAT, VIES and INTRASTAT returns accounts for the transaction and the reason why he is not collecting VAT at the Polish rate. Because the goods are exported to another EU member state (sold to you - Party B - but delivered to party C who is registered for VAT in another EU memberstate).

You sell the goods to party C, who is registered for VAT in his jurisdiction. So you raise a (VAT) zero rated invoice to your client (party C). You account for that transaction in your VAT return in Box E1 by showing the Value of that transaction (Intra EU supply). You also file a VIES return which details the transaction from your VAT number to your client's VAT number.

Party C accounts for the VAT in exactly the same way as you do. Now ultimately, if party C sell the goods to another party in hios VAT jurisdiction then he has to levy VAT at the appropriate rate and remit that VAT to the VAT authorities in his jurisdiction. However, up untill the point of sale within the jurisdiction of party C, nobody pays or charges VAT.

My recommendation is to get a blank VAT, VIES and Intrastat return, and look at the notes of explanation for each form.

for info on VIES and Intrastat you can contact the VIMA office in Dundalk. Their details are ;
VIMA, Office of the Revenue Commissioners,
P.O. Box 43,
Dundalk,
Co. Louth.
Telephone No.(042) 9353300 or LoCall No.: 1890251010
Fax No.: (042) 9353388
E Mail: vimahelp@revenue.ie


There is a public notice I could e-mail to you which would give you all the required information (a bit of reading involved ......). Pls send me a PM with your e-mail address and I will forward the notice to you.

Best regards,
Rudolf289


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## BSM (3 Feb 2015)

What about B2C sale. Business registered in Ireland, buying goods in Germany, and deliver to France (to non vat registered customer). It's clear - import invoice vat 0, export to customer - irish vat 23 or 13,5, but what about shipping. French customer pays for goods and shipping. I order shipping from Germany directly to France. Shipping is provided by vat registered shipping and logistic company from Germany. What about Vat on shipping when the customer pays for shipping exact what I pay for. Its not my income. I charge customer exact amount what I pay for shipping.


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