Calculating VAT for goods sold to EU member states
December 16, 2022
Since July last year, online retailers selling goods to their customers in the EU must calculate, charge and pay VAT on all packages shipped, regardless of their value.
Unfortunately, retailers fail to declare that they also have to pay VAT on any additional costs associated with the sale. And if they miscalculate, retailers must take responsibility.
What are the main obstacles?
Different countries, different VAT rates
The retailer must be able to calculate taxes based on the rates of all the countries to which he transports goods.
Mistakes retailers make when paying VAT
The mistake retailers often make is that they apply VAT only to the price of the package.
VAT has to be paid (on all costs shown on the invoice). This includes transport, insurance and any additional costs.
It is important to note that when these costs are marked separately on the invoice, they should be divided between the goods with different VAT rates on the invoice to calculate the correct amount of VAT on the additional costs.
Crossborderit is your best ally in this aspect.
All goods entering the EU must be declared at customs and VAT is applied to all items shipped to the EU. The most effective way to comply with the new regulations is to automatically calculate taxes and duties.
CBIT takes care of this. Thanks to its easy onboarding and simple flat shipping rates, it will be very easy to calculate taxes, collect them and even pay them for you. In addition, CBIT offers easy DDP for these solutions for a smooth and seamless customer experience.