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Distance sales in the EU: Risky business

Selling goods to private individuals or other persons without a VAT identification number in another EU-member State can put you at risk with VAT. The main rule with these so called distance sales is that VAT should be charged in the country where your business is established.

However if you meet the following two conditions,  VAT on sales as these should be charged in the member state where the goods are delivered:

1. You deliver the goods to buyers in other EU member states. You can deliver the goods yourself, but also instruct another business to do this on your behalf. The main point is that the goods were transported by you or at your expense.
2. The total amount of the sales to private individuals or other persons without a VAT identification number in that member state during a calendar year should is higher than a certain amount. (This amount is different for each member state.)

If you perform distance sales, you should register in the EU member state, in which you perform the distance sales.

If you are not aware of this rule you run the risk whereby all of a sudden you should pay VAT in another country. And that is only part of the problem. Another part of the problem is how to get a refund of the VAT already paid in your own country? Most of the times this results in a cash disadvantage.

The problem becomes however really big if the VAT tariff in the other country is higher than the VAT tariff in your own country. If the VAT would have been arranged properly, the buyer of the goods/services would have born the VAT. However if you find out afterwards that there is additional VAT to be paid, this extra VAT can't be charged on to the buyer. So in the end you will have to pay the VAT yourself.

For further information please contact:

Ms. A.S.D. (Aimée) Mounier LLM
E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

T +31 416 330505
Prof. Asserweg 8
5144 NC Waalwijk
Postbus 460
5140 AL Waalwijk, Netherlands

HLB Van Daal & Partners is an independent member firm of HLB International. Visit the firm's website: http://www.vandaal.nl/english.htm

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