Distance selling and VAT

Mail order and VAT registration
Table of Contents

Distance selling : What VAT rules are applied?

Distance selling is subject to many VAT regulations. Companies dealing with this activity are obliged to strictly comply with them.

In terms of VAT, online sale means that companies being VAT payers carry out intra-Community deliveries to private individuals (B2C) or companies not registered for VAT. This term should not be confused with an intra-Community shipment exempted from VAT, which concerns transactions between companies (B2B).

Note! The system of remote sales does not apply to new means of transport or products subject to excise duty where sale is intended for exempt persons (alcohol, alcoholic beverages, mineral oils, tobacco products). These are governed by separate regulations on excise duty.

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What does the distance selling system involve?

In terms of tax regulations, the distance selling system determines the place of taxation of a given transaction, depending on the level of sales turnover.

 

If the value of distance selling generated by a company that is a VAT payer does not exceed the threshold set out in the target country, the operation is subject to taxation in the country in which its registered office is located. Otherwise, the operation is subject to taxation in the country in which the sales take place, compelling such a company to register for VAT purposes and to submit VAT declarations in that country.

 

The distance selling threshold corresponds to net sales turnover generated by the seller in the target country. The distance selling threshold may vary across countries. Each Member State defines its own threshold.

 

Example of a distance selling situation

A Polish company sells products on its website intended for private individuals in Belgium. In 2016, the company generated a net turnover of € 20,000 in Belgium. The sales were subject to Polish VAT. In May 2017, the company exceeded the remote sales threshold applicable in Belgium, i.e. € 35,000. Starting from that date, the company has 30 days to register for VAT purposes in Belgium, and then to tax the sale transactions with Belgian VAT and submit a tax declaration in Belgium.

Distance selling thresholds

A company should take into account the total value of annual net turnover from sale to private individuals and companies not registered for VAT within one Member State, in Euro, during the previous calendar year or the current year.
État membre
Seuil TVA VAD
Germany
100 000 €
Austria
35 000 €
Belgium
35 000 €
Bulgaria
70 000 BNG (~ 35 000 €)
Cyprus
35 000 €
Croatia
270 000 HRK (~35 000 €)
Danmark
280 000 DKK (~35 000 €)
Spain
35 000 €
Estonia
35 000 €
Finland
35 000 €
France
35 000 €
Greece
35 000 €
Hongary
8 800 000 HUF (~35 000 €)
Ireland
35 000 €
Italy
35 000 €
Latvia
24 000 LVL (~35 000 €)
Lithuania
125 000 LTL (~35 000 €)
Luxembourg
100 000 €
Malta
35 000 €
The Netherlands
100 000 €
Poland
160 000 PLN (~40 000 €)
Portugal
35 000 €
Czech Republic
1 140 000 CZK (~40 000 €)
Roumania
118 000 RON (~30 000 €)
Slovakia
35 000 €
Slovenia
35 000 €
Sweden
320 000 SEK (~35 000 €)

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