VAT – Distance selling thresholds

Does your company sell goods to customers in other countries within the EU? If it does, you need to be aware of distance selling thresholds.

For EU sales, where the customer is a taxable person in another EU state the place of supply is deemed to be in that other state. The sales can be zero rated subject to the inverse- charging rules.

If your company makes sales to non-vatable persons in EU states, the place of supply is the UK and UK VAT applies.

There is, however, a distance selling threshold applicable in all other EU states such that if supplies to non-vatable persons in those states exceeds the prescribed limits in any one year then a VAT registration obligation will arise in the state in question.

All EU states that use the Euro as their currency have the choice of setting a distance selling threshold of either €100,000 or €35,000.

All states have adopted the €35,000 limit with the exception of Germany, Luxemburg and the Netherlands.

Distance selling thresholds for non-euro currency states are as follows:

  • Bulgaria – BGN 70,000
  • Croatia – HRK 270,000
  • Czech Republic – CZK 1,140,000
  • Denmark – DKK 280,000
  • Poland – PLN 160,000
  • Romania – RON 118,000
  • Sweden – SEK 320,000
  • United Kingdom – GBP 70,000

If you make sales to non-vatable customers in other EU states, you may be required to register for VAT in that state. It is important to segregate and review distance sales from sales to other vatable entities within the EU.

If you would like to know more about this or want to understand how this may affect your business, please contact your Barnes Roffe partner.

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