VAT on sales via the internet
Following the successes of big webshops such as Amazon, more and more companies are choosing to run their business via webshops. If you sell goods via a webshop or provide electronic services, this might have consequences for the VAT within the EU. Below we picked out two out of many relevant measures.
VAT on distance selling
If your company is based in the Netherlands and you sell goods to consumers in other EU-member states via a webshop, and your company takes care of the transportation of the goods sold, the main rule is that the taxable event takes place in the Netherlands. This means you are also obliged to pay VAT in the Netherlands. However, if you exclusively sell your goods to consumers (B2C-supplies) or consumers that are, broadly speaking, comparable to individuals for VAT-purposes (such as businesses who are exempt from VAT), it is possible that the exception to the main rule, called, “distance selling”, applies. In this case the taxable event takes place in the EU-member state in which the consumer is resided. The VAT is also payable in the country where the consumer is resided. If, for instance, you run a webshop in the Netherlands and you sell goods to individuals (non-businesses) in Italy, the VAT will be payable in Italy. Please note that certain tresholds apply in different member states. For example, in case of supplying goods to Italy, the rule of distance selling does not apply if the total amount of the remunerations for the goods is below € 35.000. You can also request the tax authorities to not apply the treshold. This may be benificial in some situations.
If you perform “electronical services” for consumers in another EU-member state, it is probable that that you can use a special provision in the VAT. “Electronical services” are, for example, providing and maintaining software or hostingservices. The main rule for these type of services is that the VAT is payable in the country where the consumer is resided. If the main rule is applied, this means that your company potentially has to register in many different countries. As of 1 January 2015 it is possible to use the so-called “one-stop-shop”-provision. This means that you can choose to pay the VAT in the EU-member state of our choice. For example, if your Netherlands resided company provides electronical services to clients in Germany, Italy and Spain, you can pay the German, Italian and Spanish VAT in the Netherlands. The Dutch tax authorities will pay the correct amount to the German, Italian and Spanish tax authorities. This way, you don’t have to register in 4 (or more) countries for VAT-purposes.