For our overseas sellers in the EU who sell through the third-party sales platform, after the EU tax reform on July 1, 2021, when selling between EU countries/regions, the sellers only need to register VAT in the countries with inventory, and most of the orders have been withheld and repaid by the sales platform. Besides VAT declaration, what else should be declared for compliance? What additional VAT should be paid?
Effective EU cross-border B2B
As the name suggests, B2B in EU means business to business, that is, you sell as a business seller to a business buyer who is also a business and has the vat number of the destination country.
As stipulated by EU regulations, cross-border B2B sales within the EU, for duty-free sales, that is, this part of the transaction, do not need to pay tax, but the premise is:
1) Cross-border transactions within the EU,
2) The buyer has a valid EU destination tax number.
The seller is exempt from VAT sales and does not pay VAT tax, which does not mean that there is no declaration obligation in the VAT declaration form. On the contrary, this portion of cross-border B2B sales should be declared in the vat return excluding tax sales.
Invalid cross-border B2B (fake cross-border B2B)
B2C refers to Business to customer, and sales by enterprises to individual buyers (especially in the case that the destination country does not have a valid EU tax code), such situation requires tax collection for cross-border sales in EU and domestic sales. Cross-border buyers are taxed at the VAT rate of the destination country. Theoretically, according to the current policy, all B2C transactions should be withheld and remitted by the platform, but occasionally there are B2C transactions that have not been withheld and remitted (generally, the tax number of the destination country is invalid). In accordance with the EU tax law, this part needs to be declared offline and calculated and paid according to the tax rate of the destination country.
In addition, in the Amazon sales report, we often find some B2B orders, buyer id number is not correct (through vie calibration failure) in the European Union, the tax bureau will be in the form of B2C to judge the sale, trade is a judgment that is clearly don't need to pay taxes as taxable transactions.
EC-sales
EC Sales Lists (ESLs). Ec Sales Lists (ESLS). Ec Sales lists (ESLS). It is the EU tax bureau that tracks and monitors the cross-border B2B declaration report of EU in a unified way. And, of course, with intrastate declaration data at customs. Therefore, if some sellers with a large volume fail to declare EC-sales in time, tax investigation will be easily triggered. Here, we remind sellers to do a good job in cross-border B2B transaction declaration.
Usually, EC-sales will have a separate declaration report, and the forms of listing and declaration report will be different in different countries. For specific examples:
Intrastate report
The Council Regulation introduced Intrastate in Regulation 3330/91 for the use of statistics on trade in goods between Member States. This report can basically be regarded as a statistical data reported to the customs, of course, the tax bureau will also synchronize with this data. Intrastate means that when the value of the goods purchased from other EU countries or sold to other EU countries exceeds a certain threshold, the declaration must be initiated. That is to say, if the value is not exceeded, no declaration is required, but only when the threshold is exceeded.
The requirements for Intrastate reporting vary from country to country, monitoring whether registration is required and when to declare according to national threshold requirements.
But intrastate requires advance registration, and there are additional registration and application costs. Generally speaking, especially for sellers with large volume of sales/imports, it is necessary to keep communication with the tax agent in advance.
Whether Intrastate needs to register and declare or not, countries mainly need to monitor the following transactions:
· Imports within the EU
· Exports within the EU
· Including warehouse removal