To help sellers better understand VAT tax issues in Europe, the following are some frequently asked questions about VAT tax.
1. What are the consequences if sellers do not add VAT tax numbers and do not pay VAT?
A: According to UK tax laws, all accounts operating on Amazon UK must add VAT tax numbers and must make true, timely and accurate tax declarations. If there is deliberate delay, error or false declaration, you may be subject to varying degrees of punishment from the UK Revenue and Customs Administration, including goods seizure, fines, reporting to the platform and account seizure.
2. Can I use the VAT number of another company for declaration? Can I add the same tax number to multiple accounts?
A: Each VAT tax number is unique and corresponds to a unique declaration entity. As a seller, you should apply for your own VAT tax number. A real VAT tax number is the basic guarantee for long-term safe operation. Abuse or repeated use of VAT tax numbers in multiple accounts will lead to unclear tax declarations and be easily reviewed by the tax department. If multiple accounts add the same VAT number, the Amazon system will think that these accounts belong to the same business entity, resulting in account association and limiting the associated accounts.
3. What are the risks of using a freight forwarder’s VAT number for customs clearance?
Answer: If multiple sellers use a VAT number for customs clearance at the same time, the customs clearance entity and the seller will not match, and the tax cannot be deducted in the subsequent tax declaration and payment. Even if the current sales tax is less than the VAT paid for import, the tax refund cannot be applied for. In addition, some freight forwarders will have low declarations when declaring taxes, which may easily lead to the goods being detained by customs if they are audited by customs.
4. I am a small seller. Can I not register a VAT number and do tax declaration?
Answer: No. According to the current tax law requirements of the United Kingdom, all merchants engaged in online sales, regardless of size and who the sales entity is, need to apply for a VAT number in accordance with the law and declare and pay VAT on a quarterly basis.
5. After the company name is changed, can the original registered VAT tax number continue to be used? Answer: If only the company name is changed, and the company’s business registration certificate and other codes remain unchanged, the original VAT tax number can continue to be used. The seller only needs to provide a new company name and business license, and the agent will notify the UK Revenue and Customs Administration to change the company name for the VAT tax number; if the company is re-registered, the company’s business registration certificate number will change, and the VAT tax number must be re-registered.
6. After registering a VAT tax number, taxes must be paid every quarter. If there is no sales, can zero declaration be made every quarter? What are the consequences of not paying taxes?
Answer: Regarding the declaration and payment after registering a VAT tax number, sellers can refer to the following situations: @Apply for VAT registration After obtaining a tax number, even if no goods are sold, tax declarations need to be made regularly every quarter. Sellers can choose to have an agent make the declaration on their behalf or make the declaration themselves; @If there is no sales, but there is import customs clearance and an import tax bill is generated in the current period, the tax number entity needs to make a non-zero declaration, and the tax department will refund the tax based on the declaration situation; BIf there is no sales and no import customs clearance in the current period, a zero declaration can be made; @If there is sales, and there is import customs clearance and an import tax bill is generated in the current period, a non-zero declaration is made, and the import tax bill can be deducted. If the import price is greater than the sales price, there is a tax refund, and if the import price is less than the sales price, the excess sales tax after the deduction needs to be paid; SIf there is sales, but there is no import customs clearance in the current period, or there is import customs clearance but no import tax bill is generated, a zero declaration is made and sales tax is paid; @If certain taxes need to be paid after the declaration, the seller must pay the tax within 7 working days after the declaration receipt is received. If the tax payment is delayed, the UK Revenue and Customs Administration will calculate interest at 3% of the current tax amount per day from the date of delay. If it exceeds 30 The British Revenue and Customs Administration will produce a court letter in a few days, and will prosecute the taxpayer in serious cases.
7. What materials do sellers need to prepare for VAT declaration every quarter?
Answer: The materials required for quarterly tax declaration are as follows:Input documents, that is, import VAT tax documents:2C79 documents or bills provided by logistics companies:3Output documents, that is, bills issued to buyers, PayPal sales data, or monthly bank bills;@Purchase and sales data, such as goods purchase documents;Other expense documents, that is, expense documents generated locally in the UK, etc. In short, the more detailed the materials are, the better.
8. After having a UK VAT tax number, can I use overseas warehouses and FBA in other EU countries?
Answer: First of all, it should be emphasized that the UK VAT tax number can be cleared in other EU countries, but the premise of this tax design is that the goods must be transferred to the UK for warehousing and sales. According to the EU tax law, where the goods are stored, the local VAT tax number must be registered. That is to say, a Chinese company registered with a UK VAT number cannot “legally” use overseas warehouses in other parts of Europe.
But it is obviously impossible for a Chinese company to register VAT numbers in different European countries. How can this be solved? The most common way is Distance Sales. For example, using the UK’s overseas warehouse to express goods to buyers in other EU countries.
Of course, the sales volume of this sales method is not unlimited, and the specific requirements of each country are also different. For example, in 2016, France stipulated that it was 35,000 euros and Germany stipulated that it was 100,000 euros. If the limit is exceeded, a VAT number must be registered locally.
9. Can I avoid tax by using the method of domestic self-delivery and direct mail?
Answer: According to EU regulations, goods with a value of less than 15 pounds and 22 euros are exempt from VAT when entering the customs, but not all single sales below this amount are tax-free. For goods sold online and mailed through customs, the buyer’s contact information and address will inevitably appear on the package. If the customs conducts a spot check and verifies with the recipient, the package may be detained and VAT may be required to be paid due to the discrepancy between the declared value and the actual value.
10. Should I pay the tax before applying for a VAT tax number?
Answer: When applying for a UK VAT tax number, you should honestly disclose the required information to the UK tax department, and pay the tax payable in accordance with the VAT regulations before applying for VAT in a timely manner according to the requirements of the UK tax department.
VAT tax issues are coming fiercely, and some sellers’ accounts have even been removed from sales privileges. Under the new situation, if sellers can adjust their mindset and operate legally and compliantly within the legal framework, they may be able to turn barriers into opportunities for development and achieve greater development.