VAT & online selling

[Bobbi70]

Hi

I am thinking of setting up a business selling childrens clothes online. I will be sourcing clothes from Europe and worldwide. I will be hoping to sell to Ireland, EU & worldwide. I don't expect to exceed the VAT thresholds and therefore would not have to register for VAT. However can someone tell me what is the VAT rate that would be charged on children's clothing and is there a VAT distinction between selling to Irl & EU customers and worldwide customers? And even if I don't register for VAT do I have to charge VAT on my sales to customers?

Thanks

 

[Rudolf289]

Hello Bobbi70

From the Irish VAT guide;

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’.

Have a look at the following website ;

The VAT rate in Ireland applicable on Children's clothing is zero. Bear in mind that applies to clothing for children upto 12 years of age only.

Now, the critical question is, do you charge VAT on your supplies to clients based in other EU member states. Since you are unlikely to exceed the thresholds for registering for VAT in the jurisdictions you are selling into, you can apply Irish VAT. Since in Ireland Children's clothing is zero rated, you do not have to apply VAT to your prices..

For sales outside the EU you can apply the zero rate (regardless of size / age) as all exports to non EU countries are automatically zero rated.

If you need any further information or assistance on any shipping matters, feel free to drop me a line

Cheers,
Rudolf289

 

[Bobbi70]

Thanks for all that info Rudolf, will check out the revenue website but looks like I can be VAT free!!