Online traders are subject to several VAT obligations in Europe when they exceed certain distance selling thresholds. What are the thresholds in each of the European countries? How do you calculate them? What about marketplaces and storage facilities in another Member State?
Update: the regulations for e-commerce VAT thresholds have changed from July 1st 2021. See our article, “The E-Commerce VAT Package – 1st July 2021″ (in French) and our VAT & E-Commerce page (in English).
Under the general distance selling scheme, companies making distance sales must charge VAT in the departure country. However, when the amount of sales made in the goods’ destination country exceeds a certain threshold, they must charge VAT in the destination country.
What are the VAT thresholds for distance selling in the EU?
According to Article 33 of Directive 2006/112/EC the EU Member States have the choice between two thresholds for distance selling transactions, EUR 35,000 and 100,000. Although most Member States have chosen to apply the lower threshold of EUR 35 000, others have preferred to use the EUR 100 000 threshold as detailed below:
| État Membre | Code | Seuils pour les ventes à distance |
|---|---|---|
| Autriche | AT | 35 000 euros |
| Belgique | BE | 35 000 euros |
| Bulgarie | BG | 35 809 euros ( 70 000 BNG) |
| Chypre | CY | 35 000 euros |
| République tchèque | CZ | 43 943 euros (1 140 000 CZK) |
| Allemagne | DE | 100 000 euros |
| Danemark | DK | 37 650 euros (280 000 DKK) |
| Estonie | EE | 35 000 euros |
| Grèce | EL | 35 000 euros |
| Espagne | ES | 35 000 euros |
| Finlande | FI | 35 000 euros |
| France | FR | 35 000 euros |
| Croatie | HR | 35 630 euros (270 000 HRK) |
| Hongrie | HU | 32 257 euros (8 800 000 HUF) |
| Irlande | IE | 35 000 euros |
| Italie | IT | 35 000 euros |
| Lituanie | LT | 36 023 (125 000 LTL) |
| Luxembourg | LU | 100 000 euros |
| Lettonie | LV | 34 052 (24 000 LVL) |
| Malte | MT | 35 000 euros |
| Pays Bas | NL | 100 000 euros |
| Pologne | PL | 35 142 euros (160 000 PLN) |
| Portugal | PT | 35 000 euros |
| Roumanie | RO | 23 940 (118 000 RON) |
| Suède | SE | 31 536 euros (320 000 SEK) |
| Slovénie | SI | 35 000 euros |
| Slovaquie | SK | 35 000 euros |
Which transactions should be taken into account when checking your VAT thresholds for e-commerce or mail order?
Distance selling is the Intra-Community supply of goods dispatched by or on behalf of the seller to non-taxable persons or those benefitting from an exemption scheme.
These arrangements do not apply to new means of transport or to products subject to excise duty (alcohol, tobacco and mineral oils ….)
The transactions concerned must meet three conditions cumulatively to qualify as distance selling:
- the delivery must relate to goods dispatched or transported by or on behalf of the seller to the buyer;
- the delivery is made from one Member State of the European Union to another;
- the purchaser is an individual (non-taxable natural person) or a person benefitting from an Intra-Community acquisition tax exemption.
Online traders making Intra-Community deliveries to private or exempt individuals are subject to the distance selling regime.
Which transactions should be taken into account when checking your VAT thresholds for e-commerce or mail order?
The Marketplaces are the places where sellers-merchants and buyers-customers meet and carry out transactions. Transactions take place physically directly between the seller and the customer. The marketplaces are ultimately intermediaries that facilitate the relationship between the merchant and the customer.
The marketplaces allow e-retailers to sell their products easily in a large number of EU Member States. However, there is a risk involved, as it may be necessary to monitor distance selling thresholds for each Member State where products are sold.
In addition, an online merchant who has a contract with a marketplace may see their stock transferred from one Member State to another by that operator. The online merchant must therefore be registered for VAT in both Member States. What is the reason for this? Simply because they will have to declare an Intra-Community supply in the departure Member State and an Intra-Community aquisition in the arrival Member State.
Online merchants using marketplaces must monitor the amount of sales made in each country and the corresponding thresholds. They will also have to be vigilant when transferring stock in order to monitor the VAT risks.
What are the tax obligations that apply when you exceed these thresholds?
Sellers whose distance selling in another EU member state exceeds the threshold set by that state must:
- register for VAT in the Member State whose threshold is exceeded
- Invoice including local VAT
- file a VAT return in the country concerned
- fill out an INTRASTAT return if the INTRASTAT thresholds are exceeded.
Online traders generally prefer to have a fiscal representative to handle these obligations.
Update: the regulations for e-commerce VAT thresholds have changed from July 1st 2021. See our article, “The E-Commerce VAT Package – 1st July 2021” (in French) and our VAT & E-Commerce guide (in English).
Who should draw up Intrastat, EC sales list or EC purchase list? What are the thresholds? What types of operation should be included? Are these returns mandatory in all EU Member States?
See our guide: Intrastat. ESL: understanding your VAT obligations.
