This does not constitute professional tax advice. We strongly advise consulting a tax specialist to find out your specific obligations.
If you're looking for a service to help you understand your VAT obligations, check out VATGlobal, FBA-hero, and SimplyVAT.
Depending on where you're located and your volume of sales, you should do the following:
- If you're based in the EU and have reached your country's sales threshold
- You may be liable to register as a VAT payer if your business achieves the sales threshold for the country in which your business is located. The sales threshold is different for each country within the EU (eg. Germany it's 12,500 euros. In the UK it's 83,000 pounds.).
- Submit a valid VAT ID to Printful and we'll charge 0% VAT for orders going to EU member states and worldwide. We're still obligated to charge 21% for orders going to Latvia.
- If you're based in the EU and haven't reached the sales threshold for your country
- You're not obligated to register as a VAT payer, although you can register if you like and submit us your VAT ID.
- If you don't register as a VAT payer, we will charge a VAT rate of 21% on orders going to EU member states that are fulfilled at our Europe location. You don't have to charge your customers VAT, but you may consider raising your retail prices to adjust for our VAT charge.
- If you're not based in the EU and sell your products to customers in the EU
- You need to register as a VAT payer if you plan to or already do have customers in the European Union. It's up to you to decide in which country to register. You can register where you anticipate you'll get the first or most sales.
- Submit a valid VAT ID to Printful and we'll charge 0% VAT to orders going to EU member states that are fulfilled at our Europe location. We're still obligated to charge 21% on orders going to Latvia.
- If you are not registered and don't submit a VAT ID, we will charge a VAT rate of 21% for orders that are fulfilled in Europe and going to EU member states.
Once you're a registered VAT payer, you need to:
- Check the VAT reporting and invoicing requirements in the country you're registered and make sure you comply.
- Collect VAT on orders going to EU member states.
- File VAT returns and remit VAT to the tax authorities to the country in which you're registered (deducting VAT incurred on your supply chain).
- Make sure your customers can see VAT charge during the checkout process.
You also need to pay attention to “distance selling” rules for other EU member states in which you aren't registered. If your sales reach another European Union country's threshold, you need to register as a VAT payer there too and collect that country's rate for orders shipped there. The thresholds vary for each country. It starts at 35,000 euros for most countries and can go up to 100,000 euros.
- You can find a list of country thresholds here
- More info on where to register as a VAT payer here
- VAT calculation formula here