Taking steps toward global expansion is a major move for any business—and Europe is a great place to start. To set yourself up for selling success, it’s a good idea to learn more about compliance, taxes, and regulations—specifically UK and EU VAT. What is the VAT, and how do you prepare for it?
Read on to learn more about European VAT, when and how you need to register for VAT, how HAQM can help with VAT registration, and more.
What is European VAT?
VAT—which stands for “value-added tax”—is a type of tax added to goods through production and distribution in Europe and other countries. Your VAT can be calculated by adding the value of your products to the percentage of customs duty, shipping costs, and insurance—it often comes to roughly 20% of the shipment’s value.
When you’re ready to sell in Europe, you may need to register for VAT using either a Standard Rate or Flat Rate depending on where you’re selling from (Flat Rate is only available to UK sellers). You can reclaim Import VAT under the Standard Rate. If you’re selling in more than one European country, you may need to register for VAT in every country you sell in.
Learn more about UK and EU VAT
When do you need to register for VAT in the UK or EU?
Assuming you already have a Professional selling account for Europe and determined which products you want to sell, it’s time to explore European taxes and regulations—including the VAT.
If you’re selling below the annual threshold for the area you’re selling in, you may not need to register for a VAT. But the moment you start selling above the threshold in an EU country, you’ll have to register for VAT in that country.
It’s worth noting that if you plan to use Pan-European FBA to store your inventory and fulfill your orders, you’ll need to register for VAT before you start selling to customers in Europe. You may also need to file VAT returns in the country you’re shipping products to and from—especially if you’re exceeding a threshold for “distance selling” in the EU.
If you have additional questions about if or when you should register for VAT, reach out to your tax advisors—they’ll know what to do based on your plans.
How do you register for VAT?
The good news is, it’s relatively easy to register for VAT—and it’s free. Most European countries let you register online, and the VAT information is available in English. The countries you want to register in will usually have either an online or PDF form you can fill out and submit.
After your request has been submitted, there may be additional forms that need to be signed and returned—they’ll be sent to you. Remember that registering for VAT may have other compliance requirements depending on the country you’re registering in, including filing reports and issuing VAT invoices.
You can start the registration process by visiting the gov.uk website.
How does HAQM help with VAT registration?
If you’re unsure about the application process or you plan to do business in a variety of European countries, it may be a good idea to consult with tax and regulatory advisors. If you don’t have tax or regulatory advisors, you can connect with advisors using the HAQM Service Provider Network.
The Service Provider Network offers a group of vetted third-party service providers who can help with almost every step of selling with HAQM. You can search our network to find an advisor who can help you launch your online business in Europe with a greater understanding of the rules and regulations you need to follow. An advisor can also help answer any questions you may have about the process.
How do you provide a VAT registration number to HAQM?
You can share your VAT registration number in your Europe Seller Central account. From the settings menu, select Account Info, then Tax information. Go to VAT/GST Registration Numbers, then enter your VAT registration numbers by country.
It’s important to share your registration number for every country you’re registered in, and make sure you keep your registration details up to date. Your VAT from sales in the HAQM store is calculated using this information, so if it’s wrong you might get incorrect VAT charges—and that could mean additional costs for your business.
In select locations, local laws and regulations require that HAQM has record of your local VAT registration numbers for where you store your inventory or where you’ve exceeded certain sales thresholds. You may also need to share your VAT registration numbers to participate in certain HAQM programs.
Provide HAQM with your VAT registration number
Ready to register and start selling with an EU VAT?
Registering for a VAT is a simple step in your global selling expansion plan. Even if you plan to sell in multiple countries and your business needs are more complex, HAQM has tools and services that can make selling in Europe easier to manage. With a little research and form filling, you can get your VAT in the European countries you plan to sell in and turn your dreams of global expansion into a reality.
Frequently Asked Questions
When should I register for VAT in the UK or EU?
Can HAQM help me with VAT registration?
Do I need to register for European VAT in multiple countries?
What are EU distance selling thresholds?
What is the VAT rate in Europe?
*A Professional selling plan is $39.99 a month + selling fees. Learn more
