Nobody likes taxes – so forgive us for talking about them.
If you’re a multi channel ecommerce retailer then the chances are that you are selling across, not just multiple marketplaces, but also multiple countries.
For EU retailers that creates a potential VAT liability in the country you are selling into. The EU VAT rules oblige retailers who sell more than the VAT Distance Selling Threshold to register for VAT in the country where they have exceeded the threshold. That means you pay the VAT due to them, at the rates they decree, not to the UK VAT office if you are a UK retailer.
Each country in the EU opts to choose a VAT Threshold above which you must register with them – either 35,000 or 100,000 Euros. For example Germany insists you register if you sell above 100,000 Euros in any one year, while Belgium wants you to register if you sell 35,000 Euros. It is one of the hazards of Cross Border Trade.
if you haven’t registered and you’ve paid the VAT to the wrong country then you’ll have to negotiate to recover the sum and “fess up” with the country that you should have paid it to.
If that all sounds complicated then the good news is that there are specialist VAT consultants who’ll unpick any mess you have accidently created and also get you registered in the various jurisdictions.
When it comes to managing your prices and the VAT across the various marketplaces you can take advantage of Seller Dynamics. The multi channel ecommerce solution has recently put in place new marketplace VAT monitoring and reporting features to help retailers stay on top of things. You can see how Seller Dynamics helps in the 90 second video below, that describes how you can handle VAT and VAT distance selling thresholds.