How To

Distance Selling Threshold Widget

VAT Settings


With cross-border trade becoming more of a priority for retailers, navigating the complex VAT requirements of different regions becomes a difficult task. Different countries have different standard tax rates (standard rate VAT in the UK is 20%, but 22% in Italy) and within those countries, different bands apply for categories or products (for example baby items are taxed at 5% in the UK). Layer onto this, that each country has a varying VAT threshold, and if a retailer exceeds that level, they may need to register their business in that country and charge local VAT rates.

All of these varying complexities make it difficult to calculate when you need to register for VAT when selling internationally. ChannelAdvisor has updated its VAT settings to enable retailers to more easily customise and calculate their VAT requirements.

 

About the widget


Through the VAT settings page, you can customise the VAT rates you charge across different regions, allowing you to accurately calculate your VAT requirement. These custom attributes allow you to adapt your VAT rates based on whether certain SKUs need a lower rate, or if you need to charge different VAT rates across different regions.

The widget offers greater visibility into your sales enabling you to monitor where you stand in regards to Distance Selling thresholds. Broken down by region, you will be able to track your GMV to different countries across different date ranges. This data will project your future sales, and flag potential VAT requirements you may need to action.

  • The green value highlights where your current GMV tracks compared to up to 25% of the Distance Selling threshold of the region you’re selling to.
  • The amber bar shows your current GMV measurement up to 75% of the Distance Selling threshold.
  • The red bar shows when you’re exceeding 75% of the Distance Selling threshold.
  • The light grey line highlights the official Distance Selling threshold of the region.
  • The dark grey line highlights your projected GMV based on your current rate of sales (last 30 days).

Overall, this widget enables a more seamless CBT experience for ChannelAdvisor customers.

 

About Distance Selling Thresholds


Distance Selling occurs when goods located in one EU country are sold and delivered to a private individual or non-business customer in another EU country. When sales begin, VAT is applicable in the country where the goods are located or shipped from.

However, EU countries have Distance Selling thresholds which when exceeded, require the seller to register and account for VAT in that other EU country. The VAT rules in Europe are derived from a single piece of overriding legislation. Each individual EU Member State, however, must implement these rules into its own national laws. Each EU country has a choice between setting an annual distance selling limit of either €35,000 to €100,000. As a European business selling internationally, you should be aware of the thresholds that apply when selling to different countries.

If a business exceeds these local country thresholds in a calendar year, it will have an obligation to register for VAT as a non-resident trader in that country. It will then be required to charge local VAT on the products is sells and submit ongoing VAT Returns and potentially other filings. VAT invoices may also be required depending on the country in question. It is important if you distance sell to actively monitor your sales to EU countries, as there can be financial penalties where VAT registrations are late and VAT has not been correctly accounted for. It is also worth noting that distance selling only applies to sales to EU countries and not any countries located outside the EU.

The individual thresholds for each region can be found here .

 

Need help understanding your VAT obligations?


Meridian

ChannelAdvisor partners with international VAT consultancy and VAT compliance companies that help retailers understand their VAT obligations when selling internationally. Contact Meridian Global Services for more information about the distance selling thresholds and how your business might be impacted.

 

Who are Meridian Global Services?

Meridian is a company that specialises in VAT compliance services and advice. We help thousands of eCommerce sellers both large and small to become VAT compliant in other countries. We remove the challenges of understanding local VAT regulations and the difficulties of dealing with tax authorities in their local language. As a ChannelAdvisor client who sells cross-border, we encourage you to register for VAT in relevant countries and file VAT returns at regular intervals.

[ More Info ]

VAT Settings


With cross-border trade becoming more of a priority for retailers, navigating the complex VAT requirements of different regions becomes a difficult task. Different countries have different standard tax rates (standard rate VAT in the UK is 20%, but 22% in Italy) and within those countries, different bands apply for categories or products (for example baby items are taxed at 5% in the UK). Layer onto this, that each country has a varying VAT threshold, and if a retailer exceeds that level, they may need to register their business in that country and charge local VAT rates.

All of these varying complexities make it difficult to calculate when you need to register for VAT when selling internationally. ChannelAdvisor has updated its VAT settings to enable retailers to more easily customise and calculate their VAT requirements.

 

About the widget


Through the VAT settings page, you can customise the VAT rates you charge across different regions, allowing you to accurately calculate your VAT requirement. These custom attributes allow you to adapt your VAT rates based on whether certain SKUs need a lower rate, or if you need to charge different VAT rates across different regions.

The widget offers greater visibility into your sales enabling you to monitor where you stand in regards to Distance Selling thresholds. Broken down by region, you will be able to track your GMV to different countries across different date ranges. This data will project your future sales, and flag potential VAT requirements you may need to action.

  • The green value highlights where your current GMV tracks compared to up to 25% of the Distance Selling threshold of the region you’re selling to.
  • The amber bar shows your current GMV measurement up to 75% of the Distance Selling threshold.
  • The red bar shows when you’re exceeding 75% of the Distance Selling threshold.
  • The light grey line highlights the official Distance Selling threshold of the region.
  • The dark grey line highlights your projected GMV based on your current rate of sales (last 30 days).

Overall, this widget enables a more seamless CBT experience for ChannelAdvisor customers.

 

About Distance Selling Thresholds


Distance Selling occurs when goods located in one EU country are sold and delivered to a private individual or non-business customer in another EU country. When sales begin, VAT is applicable in the country where the goods are located or shipped from.

However, EU countries have Distance Selling thresholds which when exceeded, require the seller to register and account for VAT in that other EU country. The VAT rules in Europe are derived from a single piece of overriding legislation. Each individual EU Member State, however, must implement these rules into its own national laws. Each EU country has a choice between setting an annual distance selling limit of either €35,000 to €100,000. As a European business selling internationally, you should be aware of the thresholds that apply when selling to different countries.

If a business exceeds these local country thresholds in a calendar year, it will have an obligation to register for VAT as a non-resident trader in that country. It will then be required to charge local VAT on the products is sells and submit ongoing VAT Returns and potentially other filings. VAT invoices may also be required depending on the country in question. It is important if you distance sell to actively monitor your sales to EU countries, as there can be financial penalties where VAT registrations are late and VAT has not been correctly accounted for. It is also worth noting that distance selling only applies to sales to EU countries and not any countries located outside the EU.

The individual thresholds for each region can be found here .

 

Need help understanding your VAT obligations?


Meridian

ChannelAdvisor partners with international VAT consultancy and VAT compliance companies that help retailers understand their VAT obligations when selling internationally. Contact Meridian Global Services for more information about the distance selling thresholds and how your business might be impacted.

 

Who are Meridian Global Services?

Meridian is a company that specialises in VAT compliance services and advice. We help thousands of eCommerce sellers both large and small to become VAT compliant in other countries. We remove the challenges of understanding local VAT regulations and the difficulties of dealing with tax authorities in their local language. As a ChannelAdvisor client who sells cross-border, we encourage you to register for VAT in relevant countries and file VAT returns at regular intervals.

[ More Info ]

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Tax