Brexit and replacement parts from Germany

[lustyd]

Presumably the tax money collected on my hypothetical UK online purchase would still end up in Sweden, eventually?

Probably only via EU initiatives where countries pay into the pot and then initiatives return money for activities. I'm not aware of VAT flowing around like that as it's a local sales tax.

 

[prv]

Does that mean that the country that the foreign vendor registers with keeps that VAT?

That part I don't know - the source I read was a guidance note aimed at businesses in the EU and tangentially covering third-countries wanting to import to it. It reasonably clearly explained the principles from the business point of view (though I've forgotten a lot of the detail) but it didn't really talk about what happened beyond that.

Maybe the International VAT return process will demand information on which countries goods were delivered to (while relieving the business of having to understand and collect all their different VAT rates) and the tax authority will apportion the money accordingly? Or maybe not and they just let things lie where they fall?

Pete

 

[Frogmogman]

Probably only via EU initiatives where countries pay into the pot and then initiatives return money for activities. I'm not aware of VAT flowing around like that as it's a local sales tax.

Exactly so. The VAT is due in the country where the goods are bought.

 

[prv]

I've just found and re-read the information I was referring to, and I was mistaken about the "choosing a VAT rate" idea.

New e-commerce EU VAT rules as of July 2021

External sellers still only need to register with a single EU tax authority of their choice, but they have to charge VAT rates applicable to the country of delivery and report and pay it through an EU-wide centralised system called "Import One-Stop-Shop".

That presumably answers the "who gets to keep the VAT" question.

Pete

 

[JumbleDuck]

Exactly so. The VAT is due in the country where the goods are bought.

VAT may or may not be due where the goods are bought - that's up to individual countries. In the case of the UK and, in due course the EU, VAT is due when the goods are imported, regardless of where they were bought and regardless of what tax has already been paid.

 

[MikeCC]

And the same applies for business in the opposite direction, supposedly?
A UK based retailer, like ASAP for instance, will have to collect import VAT for customers in 27 countries (at variable rates) and send it off to their respective tax authorities?
I think they will lose some customers. Or more likely perhaps, they will not accept orders from EU customers for values under the threshold?

No, you only have to do one registration in an EU country of your choice. It's a goods version of the digital services MOSS.

 

[lustyd]

VAT may or may not be due where the goods are bought - that's up to individual countries. In the case of the UK and, in due course the EU, VAT is due when the goods are imported, regardless of where they were bought and regardless of what tax has already been paid.

Technically I think the problem here is that VAT is now due when the goods are sold in the country where the goods are bought before the goods are imported. But in the EU the VAT might be due where the seller registers for VAT rather than the one where the goods are bought. The alternative is that sellers outside the EU need to register to pay VAT in all of the states of the EU, which would be a real headache for most smaller sellers and as we've seen in the UK is more likely to lead to goods no longer being available to purchase in many instances.

 

[BabaYaga]

I've just found and re-read the information I was referring to, and I was mistaken about the "choosing a VAT rate" idea.

New e-commerce EU VAT rules as of July 2021

External sellers still only need to register with a single EU tax authority of their choice, but they have to charge VAT rates applicable to the country of delivery and report and pay it through an EU-wide centralised system called "Import One-Stop-Shop".

That presumably answers the "who gets to keep the VAT" question.

Thank you. Given this (from the linked dokument)

• Suppliers/sellers systems must recognise the VAT status of their clients, the countries of import/dispatch/arrival of the goods and capture the VAT rates applicable (there are more than 80 different EU VAT rates).

it will be interesting to see how online suppliers will be able to correctly display the prices of their goods to costumers in other countries...

 

[Frogmogman]

VAT may or may not be due where the goods are bought - that's up to individual countries. In the case of the UK and, in due course the EU, VAT is due when the goods are imported, regardless of where they were bought and regardless of what tax has already been paid.

Yes, that’s what I meant.

 

[st599]

Thank you. Given this (from the linked dokument)

• Suppliers/sellers systems must recognise the VAT status of their clients, the countries of import/dispatch/arrival of the goods and capture the VAT rates applicable (there are more than 80 different EU VAT rates).

it will be interesting to see how online suppliers will be able to correctly display the prices of their goods to costumers in other countries...

Plus seeing if sellers via a large platform, such as Amazon, eBay or Etsy can buy a service from the platform that does the VAT, paperwork and import duty for them.

 

[Sjp1960]

It’s worth noting that the requirement to pay vat to the eu destination county ( via a one stop shop) changed for digital goods from 1st jan 2015. As the uk was then in the EU we were able to successfully lobby to increase the thresholds for small suppliers.

As a digital supplier (ie non physical goods) you were therefore from 2015 required to detect where the customer was located and show and then charge the correct vat rate for that eu country but only if you were above the threshold.

The threshold has now been lost as we are now outside the eu, so if you e.g offer a knitting pattern for sale for 50p online and one person in France buys it you must pay French vat.