EU VAT Dropshipping Deep Dive 2021 | EU VAT changes in July 2021 and impact on China fulfillment

Are you a Shopify, WooCommerce store owner or an AliExpress dropshipper selling to customers in the EU? Are you worried about how the new EU VAT changes effective in July 2021 will affect your dropshipping business? The new EU VAT rules, just like the UK VAT changes that occurred in Jan 2021, will also drastically affect tax regulations for online sales.

Here is our previous video on the UK VAT changes: https://youtu.be/R5jNE-NOONA

Ever since the UK VAT changes took place, we’ve been getting a lot of questions from our subscribers and clients about how the upcoming EU VAT changes are going to affect their Shopify stores or Amazon Ecommerce business.

Do I have to collect VAT if I sell under €100,000? Can my fulfillment agent pay for VAT on my behalf? Do I need to charge for VAT if I sell on Amazon, Wish, or Etsy? Do I need to pay VAT if my inventory is in the EU?

In the previous video about EU VAT changes, we summarized the big changes of EU VAT rules that are already known. We covered the following 3 main changes:
1. Abolishing the distance selling threshold of 30,000 to 100,000.
2. Removing the low value VAT exemption for goods valued under €22
3. VAT is assessed at point of sales. Marketplaces and ecommerce store owners are liable for VAT.

After this video, we received more questions about whether shipping fees are taxable, how and when to use IOSS or OSS, what to do if some of the orders are over €150…

Therefore, we consulted our VAT specialist Get Free Tax, who we suggest you speak to as well if you are looking for professional help https://getfreetax.com/

In this video, we are sharing with you a more complete guide including many more details. Below are a brief summary of the things we will discuss today.
1. Deeper dissection of the 3 main changes
2. How and when to use IOSS and OSS
3. Whether fulfillment agents like us can pay VAT
4. Whether or not Shopify will charge VAT
5. Whether shipping fee is taxable (No it’s not).

Bear in mind that these rules may still subject to changes until they actually come into effect.

Even though the changes sound quite strict, they won’t kill your business. We know this for a fact because local EU sellers have been paying VAT the entire time. Besides, the market always adapts. If everyone starts having to charge VAT / include VAT in their prices, market prices will just adjust.

In the end, tax is just a life style. “In this world, nothing can be said to be certain, except death and taxes.” – Benjamin Franklin

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