Blog Post contributed by Chris O’Shea, Meridian Global Services
Distance Selling
The incidence of cross-border selling to consumers over the internet has experienced explosive growth in recent years. Many businesses are now increasing their concentration on overseas selling, especially as the global recession makes trading in domestic markets more difficult. Sellers have to grapple with the international Value Added Tax (VAT) issues that come with cross-border selling, often requiring local VAT registration in multiple countries across the EU. This is because of something called ‘distance selling’.
Distance selling is when a seller sells goods at a distance (e.g. over the internet, by telephone, by mail order) and delivers them from one EU Member State to customers (private individuals) in other EU Member States. Each EU Member State has a distance selling threshold. Essentially it is a turnover threshold, ranging between €35,000 and €100,000. When a seller exceeds this turnover threshold in another EU Member State, they will have a liability to VAT register there and charge the relative local VAT rate on their sales. For that reason it is essential that vendors who are distance selling monitor these thresholds.
Selling Abroad
As an online seller, the opportunity for you to distance sell is vast. To make the most of cross-border opportunities, there can be a lot to think about. However, with the right preparation it doesn’t have to be complex. Whether you are already selling cross-border or considering the possibility, take the time now to assess your VAT situation in other countries. If you are uncertain of any VAT details, rather than relying only on the internet for answers, it’s a good idea to ask an expert.
If sellers are not monitoring their foreign turnover thresholds and exceed the distance selling thresholds in a number of countries, without registering in these countries, this can cause issues including penalties and interest. Meridian provides all necessary support to assist all clients engaged in cross-border distance selling operations, and provide practical help to deal with all aspects of foreign VAT compliance.
Next Steps
- Find out if you need to register for VAT in another country by answering a few simple questions.
- Your information is routed to Meridian and we contact you with suggested times for a conference call with a VAT Consultant. This person will conduct your free initial assessment.
What Meridian Handles
- Identifies in which countries your company needs to register for VAT and confirms those where you do not have any VAT issues
- Handles all VAT registration work on your company’s behalf where a registration is required
- Manages all of your on-going VAT return filings in each of these jurisdictions.
For further information please contact Meridian Global Services:
T: +44 (0)20 8601 4600
E: info@meridianglobalservices.com
T: @MeridianVAT
