Drop shipping Moms (engelska)

[emerybloom]

Hi,

Forgive me but my Swedish is not good enough to converse and make any sense here so I’m going to write this in English.

We are selling our prints via a drop shipping company based in the Netherlands. This is our process: Customer buys an item from company, we then send the product directly to the customer. After 14 days we then get a sales receipt from the company with how much we have sold during the last 14 days and what we should invoice them. This sales receipt has no VAT. We then are supposed to send them an invoice for this sum.

What we are wondering is … are we supposed to add VAT to this invoice? Do we pay VAT? How do we put this into our book keeping program?

Any help would be great! I understand and can read Swedish if you prefer to write back in Swedish, I just don’t have the confidence to write in anything else other than English right now.

Many Thanks!

Gareth

[Dan]

If you’re based in sweden and the nl company is making the actual sale to the consumer I’d say you should invoice them without taxes if you and them both can provide vat numbers on the invoice.

Do they charge the customers NL-vat?

[emerybloom]

Hi Dan,

Thanks for your reply.

Yes when a customer buys from their website they pay NL tax.

[Dan]

well if you’re not involved in that sale, but actually just selling something to the NL-company, which they in turn resell, then you should handle it like a normal intra-EU sale between two vat-registered companies.

Thus no VAT, which in turn requires both your vat numbers to be on the invoice.

[GregerA]

It may not be that simple. It does not matter who pays for the goods, but to where it is actually shipped.

As I understand it you ship it directly to the end customers.

If the goods never leaves Sweden, then you must charge MOMS.

If you ship to another EU country then you can declare it as third party trade, or triangulation as they seem to call it in the English version of the litterature. But this can only be used if all three parties are VAT registered in their respective contries.

If the end customer is not VAT registered you should charge VAT in the buyers country according to the ”fallback provision”.

You find more detalis and examples in English here:
http://www.skatteverket.se/download/18.353fa3f313ec5f91b9515e7/1370443158833/560B03.pdf

[Dan]

GregerA just owned me!

I totally missed that you ship the goods. Thought you sold your prints through a print-on-demand supplier.

But how does Emerybloom know the economic background and transactional details between the end customer and the seller in NL?

[emerybloom]

Hi guys,

Thanks for your input. As you can see it’s a bit confusing. And I still don’t have a clear answer after reading that document. Thought the answer was the triangulation part on p11, but the end customer is not VAT registered.

In our case the customer (from the UK) bought our print from the company (based in NL). The customer paid VAT on this order. We then get an email of this order from the company based in NL. We produce the print and sent it directly to the customer in the UK from Sweden. We then invoice the company based in the NL for this order excluding a commission fee.

When we get an order from the company based in NL to produce and send a print they also send us the sales receipt from the order they just processed by the customer. From this receipt we can see what the customer has paid VAT (NL is 21%). This receipt is then added into the package we send to the customer.

Any more thoughts?

Thanks

[VATadviser]

@emerybloom 83268 wrote:

Hi guys,

Thanks for your input. As you can see it’s a bit confusing. And I still don’t have a clear answer after reading that document. Thought the answer was the triangulation part on p11, but the end customer is not VAT registered.

In our case the customer (from the UK) bought our print from the company (based in NL). The customer paid VAT on this order. We then get an email of this order from the company based in NL. We produce the print and sent it directly to the customer in the UK from Sweden. We then invoice the company based in the NL for this order excluding a commission fee.

When we get an order from the company based in NL to produce and send a print they also send us the sales receipt from the order they just processed by the customer. From this receipt we can see what the customer has paid VAT (NL is 21%). This receipt is then added into the package we send to the customer.

Any more thoughts?

Thanks

Hi Yes I have many more thoughts unfortunately. I believe that the whole setup is at fault.

But first some clarifications:

1. You are selling ”prints”. I assume that we could instead call it a ”Poster” or something similar? This in order to establish that you are not selling a services but goods?

2. Are your company Swedish and registred for VAT here?

3. You are selling to a Dutch client who are registered for VAT in NL?

4. Following is under assumption that you are selling goods and that you are a Swedish based company and that your client is a Dutch company.

There are several possible complications in this setup. Depending on terms of delivery and depending on country of destination.

Triangulation is out of the picture, you have already seen that (one part is not VAT registered). If I understand this correctly your clients buyer can be located anywhere in Europe. So basically your client are supplying a consumer and should always invoice VAT. As you describe it they are doing so today and it is NL VAT.

This i think can be wrong. The question here is where the taxable turnover is made. I think that most likely the taxable turnover is in the consumers country. This due to the fact that you are delivering it to that country. Your client most likely would be considered to have bought the goods from you in this case in the Uk. Since the goods then already are in the Uk thus not sent from NL by them the turnover are made in the Uk and Uk VAT should be applicable.

You should in this case invoice your client ex VAT and write your clients Uk VAT no on the invoice and ”Intracommunity supply of goods, reverse charge” . And also declare it as such in the Swedish VAT filing.

If you were to deliver the goods to your client in Sweden instead you would have to consider it as a domestic supply in Sweden. Your client would then need to register for VAT here and sell with Swedish VAT to the Uk client. This until they reach the threshold in UK of GBP 70 000. After that they must register in the Uk no matter what and pay Uk VAT.

Since they are not registered in these countries we might get problems for you in regards to whom should report the Uk transactions you or your client. This has to be looked upon in order to not have you subject to VAT registration in the countries to where you supply.

But this is a tricky one and I need more info. Please contact me directly if you want more advice. We would need to talk over the phone for this.

[Författare]

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