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EU VAT: Important information for online retailers
EU VAT: Important information for online retailers
EU VAT: Important information for online retailers
EU VAT: Important information for online retailers
EU sales tax presents challenges for merchants when selling across borders. Here you will learn how to implement the requirements correctly.
EU sales tax presents challenges for merchants when selling across borders. Here you will learn how to implement the requirements correctly.
Finance-and-accounting
Finance-and-accounting
Finance-and-accounting
Oct 30, 2024
Overview: EU sales tax
EU sales tax (value added tax, VAT) is generally based on the location of the buyer: different rules apply depending on whether the buyer is a private individual (B2C) or a business (B2B).
Since 2021, the OSS (One Stop Shop) procedure has made it easier to process cross-border transactions within the EU in a tax-compliant manner and to use a central point of contact for submitting VAT returns.
When purchasing from other EU countries, import VAT is incurred, which purchasing merchants can claim as input tax in their own country.
VAT rates vary in each EU country. Businesses are required to apply the correct country-specific tax rates to avoid legal issues.
Merchants can use the tax features of store systems such as WooCommerce, Shopify, Shopware and Magento, as well as the comprehensive payment options of PSPs such as Mollie, to make their sales processes efficient and compliant.
EU sales tax (value added tax, VAT) is generally based on the location of the buyer: different rules apply depending on whether the buyer is a private individual (B2C) or a business (B2B).
Since 2021, the OSS (One Stop Shop) procedure has made it easier to process cross-border transactions within the EU in a tax-compliant manner and to use a central point of contact for submitting VAT returns.
When purchasing from other EU countries, import VAT is incurred, which purchasing merchants can claim as input tax in their own country.
VAT rates vary in each EU country. Businesses are required to apply the correct country-specific tax rates to avoid legal issues.
Merchants can use the tax features of store systems such as WooCommerce, Shopify, Shopware and Magento, as well as the comprehensive payment options of PSPs such as Mollie, to make their sales processes efficient and compliant.
EU sales tax (value added tax, VAT) is generally based on the location of the buyer: different rules apply depending on whether the buyer is a private individual (B2C) or a business (B2B).
Since 2021, the OSS (One Stop Shop) procedure has made it easier to process cross-border transactions within the EU in a tax-compliant manner and to use a central point of contact for submitting VAT returns.
When purchasing from other EU countries, import VAT is incurred, which purchasing merchants can claim as input tax in their own country.
VAT rates vary in each EU country. Businesses are required to apply the correct country-specific tax rates to avoid legal issues.
Merchants can use the tax features of store systems such as WooCommerce, Shopify, Shopware and Magento, as well as the comprehensive payment options of PSPs such as Mollie, to make their sales processes efficient and compliant.
EU sales tax (value added tax, VAT) is generally based on the location of the buyer: different rules apply depending on whether the buyer is a private individual (B2C) or a business (B2B).
Since 2021, the OSS (One Stop Shop) procedure has made it easier to process cross-border transactions within the EU in a tax-compliant manner and to use a central point of contact for submitting VAT returns.
When purchasing from other EU countries, import VAT is incurred, which purchasing merchants can claim as input tax in their own country.
VAT rates vary in each EU country. Businesses are required to apply the correct country-specific tax rates to avoid legal issues.
Merchants can use the tax features of store systems such as WooCommerce, Shopify, Shopware and Magento, as well as the comprehensive payment options of PSPs such as Mollie, to make their sales processes efficient and compliant.
What is EU sales tax?
Sales tax in the European Union (EU) is a consumption tax that end customers pay on the sale of goods and services. Companies are responsible for calculating the tax and remitting it to the tax authorities, although it is paid by the end consumer.
A distinction is made between the following scenarios in cross-border trade:
Selling to other EU countries: Companies sell goods or services to customers in other EU countries.
Purchases from other EU countries: Companies purchase goods or services from suppliers in other EU countries.
Sales tax in the European Union (EU) is a consumption tax that end customers pay on the sale of goods and services. Companies are responsible for calculating the tax and remitting it to the tax authorities, although it is paid by the end consumer.
A distinction is made between the following scenarios in cross-border trade:
Selling to other EU countries: Companies sell goods or services to customers in other EU countries.
Purchases from other EU countries: Companies purchase goods or services from suppliers in other EU countries.
Sales tax in the European Union (EU) is a consumption tax that end customers pay on the sale of goods and services. Companies are responsible for calculating the tax and remitting it to the tax authorities, although it is paid by the end consumer.
A distinction is made between the following scenarios in cross-border trade:
Selling to other EU countries: Companies sell goods or services to customers in other EU countries.
Purchases from other EU countries: Companies purchase goods or services from suppliers in other EU countries.
Sales tax in the European Union (EU) is a consumption tax that end customers pay on the sale of goods and services. Companies are responsible for calculating the tax and remitting it to the tax authorities, although it is paid by the end consumer.
A distinction is made between the following scenarios in cross-border trade:
Selling to other EU countries: Companies sell goods or services to customers in other EU countries.
Purchases from other EU countries: Companies purchase goods or services from suppliers in other EU countries.
Sales to other EU countries
For companies that sell across borders to EU customers, sales tax is a key element. This raises the question of whether and how sales tax must be calculated for sales abroad. The following rules apply:
Sales to private individuals (B2C): If the annual turnover from cross-border B2C sales exceeds the EU-wide threshold of €10,000, the merchant must calculate and pay VAT in the respective destination country.
Sales to business customers (B2B): For sales to companies with a valid VAT registration number, delivery is usually made without VAT, as the buyer is liable for the tax.
Examples of sales to other EU countries
To illustrate the rules, let's look at three examples from the fictitious company EcoFashion GmbH, which manufactures sustainable fashion products and offers them online.
Sale to private customers in Austria (B2C): EcoFashion GmbH sells sustainable fashion items to private individuals in Austria. The turnover exceeds the annual threshold of €10,000, which means that EcoFashion GmbH is obliged to apply the Austrian VAT rate of 20 percent to all future sales and to pay the tax to the tax authorities in Austria.
Sale to business customers in Poland (B2B): A Polish fashion retailer with the VAT registration number PL987654321 purchases goods from EcoFashion GmbH. Since the buyer has a valid VAT registration number, the sale is carried out without German VAT and the Polish customer assumes the VAT liability in his country.
Sale to private customers in Switzerland (B2C): EcoFashion GmbH delivers a piece of clothing to a private customer in Switzerland. Since Switzerland is not an EU member, German VAT does not apply. Instead, Swiss import sales tax of 8.1 percent is due on import and is to be paid by the customer.
For companies that sell across borders to EU customers, sales tax is a key element. This raises the question of whether and how sales tax must be calculated for sales abroad. The following rules apply:
Sales to private individuals (B2C): If the annual turnover from cross-border B2C sales exceeds the EU-wide threshold of €10,000, the merchant must calculate and pay VAT in the respective destination country.
Sales to business customers (B2B): For sales to companies with a valid VAT registration number, delivery is usually made without VAT, as the buyer is liable for the tax.
Examples of sales to other EU countries
To illustrate the rules, let's look at three examples from the fictitious company EcoFashion GmbH, which manufactures sustainable fashion products and offers them online.
Sale to private customers in Austria (B2C): EcoFashion GmbH sells sustainable fashion items to private individuals in Austria. The turnover exceeds the annual threshold of €10,000, which means that EcoFashion GmbH is obliged to apply the Austrian VAT rate of 20 percent to all future sales and to pay the tax to the tax authorities in Austria.
Sale to business customers in Poland (B2B): A Polish fashion retailer with the VAT registration number PL987654321 purchases goods from EcoFashion GmbH. Since the buyer has a valid VAT registration number, the sale is carried out without German VAT and the Polish customer assumes the VAT liability in his country.
Sale to private customers in Switzerland (B2C): EcoFashion GmbH delivers a piece of clothing to a private customer in Switzerland. Since Switzerland is not an EU member, German VAT does not apply. Instead, Swiss import sales tax of 8.1 percent is due on import and is to be paid by the customer.
For companies that sell across borders to EU customers, sales tax is a key element. This raises the question of whether and how sales tax must be calculated for sales abroad. The following rules apply:
Sales to private individuals (B2C): If the annual turnover from cross-border B2C sales exceeds the EU-wide threshold of €10,000, the merchant must calculate and pay VAT in the respective destination country.
Sales to business customers (B2B): For sales to companies with a valid VAT registration number, delivery is usually made without VAT, as the buyer is liable for the tax.
Examples of sales to other EU countries
To illustrate the rules, let's look at three examples from the fictitious company EcoFashion GmbH, which manufactures sustainable fashion products and offers them online.
Sale to private customers in Austria (B2C): EcoFashion GmbH sells sustainable fashion items to private individuals in Austria. The turnover exceeds the annual threshold of €10,000, which means that EcoFashion GmbH is obliged to apply the Austrian VAT rate of 20 percent to all future sales and to pay the tax to the tax authorities in Austria.
Sale to business customers in Poland (B2B): A Polish fashion retailer with the VAT registration number PL987654321 purchases goods from EcoFashion GmbH. Since the buyer has a valid VAT registration number, the sale is carried out without German VAT and the Polish customer assumes the VAT liability in his country.
Sale to private customers in Switzerland (B2C): EcoFashion GmbH delivers a piece of clothing to a private customer in Switzerland. Since Switzerland is not an EU member, German VAT does not apply. Instead, Swiss import sales tax of 8.1 percent is due on import and is to be paid by the customer.
For companies that sell across borders to EU customers, sales tax is a key element. This raises the question of whether and how sales tax must be calculated for sales abroad. The following rules apply:
Sales to private individuals (B2C): If the annual turnover from cross-border B2C sales exceeds the EU-wide threshold of €10,000, the merchant must calculate and pay VAT in the respective destination country.
Sales to business customers (B2B): For sales to companies with a valid VAT registration number, delivery is usually made without VAT, as the buyer is liable for the tax.
Examples of sales to other EU countries
To illustrate the rules, let's look at three examples from the fictitious company EcoFashion GmbH, which manufactures sustainable fashion products and offers them online.
Sale to private customers in Austria (B2C): EcoFashion GmbH sells sustainable fashion items to private individuals in Austria. The turnover exceeds the annual threshold of €10,000, which means that EcoFashion GmbH is obliged to apply the Austrian VAT rate of 20 percent to all future sales and to pay the tax to the tax authorities in Austria.
Sale to business customers in Poland (B2B): A Polish fashion retailer with the VAT registration number PL987654321 purchases goods from EcoFashion GmbH. Since the buyer has a valid VAT registration number, the sale is carried out without German VAT and the Polish customer assumes the VAT liability in his country.
Sale to private customers in Switzerland (B2C): EcoFashion GmbH delivers a piece of clothing to a private customer in Switzerland. Since Switzerland is not an EU member, German VAT does not apply. Instead, Swiss import sales tax of 8.1 percent is due on import and is to be paid by the customer.
The OSS scheme at a glance
Since July 2021, the OSS regulation (One Stop Shop) has simplified the tax treatment of cross-border sales to private customers within the EU. Companies no longer have to report their VAT separately in each EU country, but can fulfill their tax obligations through a central point of contact. The main advantages of the OSS procedure:
Central point of contact: Sellers only file VAT returns and make payments in their home country.
Threshold of €10,000: If this threshold is exceeded for EU-wide B2C sales, the OSS procedure applies.
Reduced administrative burden: No separate tax registration is required in each destination country.
Further information and practical tips: Using the OSS procedure correctly.
Since July 2021, the OSS regulation (One Stop Shop) has simplified the tax treatment of cross-border sales to private customers within the EU. Companies no longer have to report their VAT separately in each EU country, but can fulfill their tax obligations through a central point of contact. The main advantages of the OSS procedure:
Central point of contact: Sellers only file VAT returns and make payments in their home country.
Threshold of €10,000: If this threshold is exceeded for EU-wide B2C sales, the OSS procedure applies.
Reduced administrative burden: No separate tax registration is required in each destination country.
Further information and practical tips: Using the OSS procedure correctly.
Since July 2021, the OSS regulation (One Stop Shop) has simplified the tax treatment of cross-border sales to private customers within the EU. Companies no longer have to report their VAT separately in each EU country, but can fulfill their tax obligations through a central point of contact. The main advantages of the OSS procedure:
Central point of contact: Sellers only file VAT returns and make payments in their home country.
Threshold of €10,000: If this threshold is exceeded for EU-wide B2C sales, the OSS procedure applies.
Reduced administrative burden: No separate tax registration is required in each destination country.
Further information and practical tips: Using the OSS procedure correctly.
Since July 2021, the OSS regulation (One Stop Shop) has simplified the tax treatment of cross-border sales to private customers within the EU. Companies no longer have to report their VAT separately in each EU country, but can fulfill their tax obligations through a central point of contact. The main advantages of the OSS procedure:
Central point of contact: Sellers only file VAT returns and make payments in their home country.
Threshold of €10,000: If this threshold is exceeded for EU-wide B2C sales, the OSS procedure applies.
Reduced administrative burden: No separate tax registration is required in each destination country.
Further information and practical tips: Using the OSS procedure correctly.
Shopping in other EU countries
When German companies purchase goods or services in other EU countries, special VAT rules apply. Intra-Community acquisitions are taxed in Germany, but the buyer can also claim the tax paid as input tax.
Rules for intra-Community acquisitions
When goods are purchased within the EU, no VAT is charged if the buyer can provide a valid VAT registration number. Instead, the buyer is obliged to declare the tax in their own country and claim it as input tax (shift of tax liability).
In addition, there are specific rules for the import of goods from third countries (non-EU countries), where an import sales tax is payable as part of the customs clearance process.
Example cases for purchasing in other EU countries
Sourcing fabrics from Italy: EcoFashion GmbH regularly sources certified organic fabrics from a supplier in Italy to produce its fashion collection. Since EcoFashion GmbH has a valid German VAT registration number, the delivery is exempt from VAT. The German VAT of 19 percent is paid in Germany and claimed as input tax, so the transaction remains tax-neutral.
Sourcing buttons from Poland: A Polish manufacturer supplies buttons and zippers to EcoFashion GmbH. The delivery is VAT-exempt within the EU due to the buyer's valid VAT ID number. In Germany, the corresponding sales tax of 19 percent is calculated, which EcoFashion GmbH can deduct as input tax.
Importing fabrics from Switzerland: EcoFashion GmbH imports specialty fabrics from Switzerland. German VAT does not apply, but the customs authority levies an import sales tax of 19 percent, which can be claimed as input tax.
When German companies purchase goods or services in other EU countries, special VAT rules apply. Intra-Community acquisitions are taxed in Germany, but the buyer can also claim the tax paid as input tax.
Rules for intra-Community acquisitions
When goods are purchased within the EU, no VAT is charged if the buyer can provide a valid VAT registration number. Instead, the buyer is obliged to declare the tax in their own country and claim it as input tax (shift of tax liability).
In addition, there are specific rules for the import of goods from third countries (non-EU countries), where an import sales tax is payable as part of the customs clearance process.
Example cases for purchasing in other EU countries
Sourcing fabrics from Italy: EcoFashion GmbH regularly sources certified organic fabrics from a supplier in Italy to produce its fashion collection. Since EcoFashion GmbH has a valid German VAT registration number, the delivery is exempt from VAT. The German VAT of 19 percent is paid in Germany and claimed as input tax, so the transaction remains tax-neutral.
Sourcing buttons from Poland: A Polish manufacturer supplies buttons and zippers to EcoFashion GmbH. The delivery is VAT-exempt within the EU due to the buyer's valid VAT ID number. In Germany, the corresponding sales tax of 19 percent is calculated, which EcoFashion GmbH can deduct as input tax.
Importing fabrics from Switzerland: EcoFashion GmbH imports specialty fabrics from Switzerland. German VAT does not apply, but the customs authority levies an import sales tax of 19 percent, which can be claimed as input tax.
When German companies purchase goods or services in other EU countries, special VAT rules apply. Intra-Community acquisitions are taxed in Germany, but the buyer can also claim the tax paid as input tax.
Rules for intra-Community acquisitions
When goods are purchased within the EU, no VAT is charged if the buyer can provide a valid VAT registration number. Instead, the buyer is obliged to declare the tax in their own country and claim it as input tax (shift of tax liability).
In addition, there are specific rules for the import of goods from third countries (non-EU countries), where an import sales tax is payable as part of the customs clearance process.
Example cases for purchasing in other EU countries
Sourcing fabrics from Italy: EcoFashion GmbH regularly sources certified organic fabrics from a supplier in Italy to produce its fashion collection. Since EcoFashion GmbH has a valid German VAT registration number, the delivery is exempt from VAT. The German VAT of 19 percent is paid in Germany and claimed as input tax, so the transaction remains tax-neutral.
Sourcing buttons from Poland: A Polish manufacturer supplies buttons and zippers to EcoFashion GmbH. The delivery is VAT-exempt within the EU due to the buyer's valid VAT ID number. In Germany, the corresponding sales tax of 19 percent is calculated, which EcoFashion GmbH can deduct as input tax.
Importing fabrics from Switzerland: EcoFashion GmbH imports specialty fabrics from Switzerland. German VAT does not apply, but the customs authority levies an import sales tax of 19 percent, which can be claimed as input tax.
When German companies purchase goods or services in other EU countries, special VAT rules apply. Intra-Community acquisitions are taxed in Germany, but the buyer can also claim the tax paid as input tax.
Rules for intra-Community acquisitions
When goods are purchased within the EU, no VAT is charged if the buyer can provide a valid VAT registration number. Instead, the buyer is obliged to declare the tax in their own country and claim it as input tax (shift of tax liability).
In addition, there are specific rules for the import of goods from third countries (non-EU countries), where an import sales tax is payable as part of the customs clearance process.
Example cases for purchasing in other EU countries
Sourcing fabrics from Italy: EcoFashion GmbH regularly sources certified organic fabrics from a supplier in Italy to produce its fashion collection. Since EcoFashion GmbH has a valid German VAT registration number, the delivery is exempt from VAT. The German VAT of 19 percent is paid in Germany and claimed as input tax, so the transaction remains tax-neutral.
Sourcing buttons from Poland: A Polish manufacturer supplies buttons and zippers to EcoFashion GmbH. The delivery is VAT-exempt within the EU due to the buyer's valid VAT ID number. In Germany, the corresponding sales tax of 19 percent is calculated, which EcoFashion GmbH can deduct as input tax.
Importing fabrics from Switzerland: EcoFashion GmbH imports specialty fabrics from Switzerland. German VAT does not apply, but the customs authority levies an import sales tax of 19 percent, which can be claimed as input tax.
EU sales tax rates in comparison
There is no standardization of VAT rates in the EU. Each member state sets its own tax rates. There is a standard rate that applies to most products and services, as well as one or more reduced rates for certain products. Here is an overview of the current VAT rates in Europe:
Belgium: standard rate 21%, reduced rates 6%, 12%
Bulgaria: standard rate 20%, reduced rate 9%
Denmark: standard rate 25%, no reduced rates
Germany: standard rate 19%, reduced rate 7%
Estonia: standard rate 20%, reduced rate 9%
Finland: standard rate 24%, reduced rates 10%, 14%
France: standard rate 20%, reduced rates 5.5%, 10%, 2.1%
Greece: standard rate 24%, reduced rates 6%, 13%
Ireland: standard rate 23%, reduced rates 4.8%, 9%, 13.5%
Italy: standard rate 22%, reduced rates 4%, 5%, 10%
Croatia: standard rate 25%, reduced rates 5%, 13%
Latvia: standard rate 21%, reduced rate 12%
Lithuania: standard rate 21%, reduced rates 5%, 9%
Luxembourg: standard rate 17%, reduced rates 3%, 8%, 14%
Malta: standard rate 18%, reduced rates 5%, 7%
Netherlands: standard rate 21%, reduced rate 9%
Austria: standard rate 20%, reduced rates 10%, 13%
Poland: standard rate 23%, reduced rates 5%, 8%
Portugal: standard rate 23%, reduced rates 6%, 13%
Romania: standard rate 19%, reduced rates 5%, 9%
Sweden: standard rate 25%, reduced rates 6%, 12%
Slovakia: standard rate 20%, reduced rate 10%
Slovenia: standard rate 22%, reduced rate 9.5%
Spain: standard rate 21%, reduced rates 4%, 10%
Czech Republic: standard rate 21%, reduced rates 10%, 15%
Hungary: standard rate 27%, reduced rates 5%, 18%
Cyprus: standard rate 19%, reduced rates 5%, 9%
The differences show that it is essential for merchants to know and apply the correct tax rates in order to comply with legal requirements and avoid problems with the tax authorities.
There is no standardization of VAT rates in the EU. Each member state sets its own tax rates. There is a standard rate that applies to most products and services, as well as one or more reduced rates for certain products. Here is an overview of the current VAT rates in Europe:
Belgium: standard rate 21%, reduced rates 6%, 12%
Bulgaria: standard rate 20%, reduced rate 9%
Denmark: standard rate 25%, no reduced rates
Germany: standard rate 19%, reduced rate 7%
Estonia: standard rate 20%, reduced rate 9%
Finland: standard rate 24%, reduced rates 10%, 14%
France: standard rate 20%, reduced rates 5.5%, 10%, 2.1%
Greece: standard rate 24%, reduced rates 6%, 13%
Ireland: standard rate 23%, reduced rates 4.8%, 9%, 13.5%
Italy: standard rate 22%, reduced rates 4%, 5%, 10%
Croatia: standard rate 25%, reduced rates 5%, 13%
Latvia: standard rate 21%, reduced rate 12%
Lithuania: standard rate 21%, reduced rates 5%, 9%
Luxembourg: standard rate 17%, reduced rates 3%, 8%, 14%
Malta: standard rate 18%, reduced rates 5%, 7%
Netherlands: standard rate 21%, reduced rate 9%
Austria: standard rate 20%, reduced rates 10%, 13%
Poland: standard rate 23%, reduced rates 5%, 8%
Portugal: standard rate 23%, reduced rates 6%, 13%
Romania: standard rate 19%, reduced rates 5%, 9%
Sweden: standard rate 25%, reduced rates 6%, 12%
Slovakia: standard rate 20%, reduced rate 10%
Slovenia: standard rate 22%, reduced rate 9.5%
Spain: standard rate 21%, reduced rates 4%, 10%
Czech Republic: standard rate 21%, reduced rates 10%, 15%
Hungary: standard rate 27%, reduced rates 5%, 18%
Cyprus: standard rate 19%, reduced rates 5%, 9%
The differences show that it is essential for merchants to know and apply the correct tax rates in order to comply with legal requirements and avoid problems with the tax authorities.
There is no standardization of VAT rates in the EU. Each member state sets its own tax rates. There is a standard rate that applies to most products and services, as well as one or more reduced rates for certain products. Here is an overview of the current VAT rates in Europe:
Belgium: standard rate 21%, reduced rates 6%, 12%
Bulgaria: standard rate 20%, reduced rate 9%
Denmark: standard rate 25%, no reduced rates
Germany: standard rate 19%, reduced rate 7%
Estonia: standard rate 20%, reduced rate 9%
Finland: standard rate 24%, reduced rates 10%, 14%
France: standard rate 20%, reduced rates 5.5%, 10%, 2.1%
Greece: standard rate 24%, reduced rates 6%, 13%
Ireland: standard rate 23%, reduced rates 4.8%, 9%, 13.5%
Italy: standard rate 22%, reduced rates 4%, 5%, 10%
Croatia: standard rate 25%, reduced rates 5%, 13%
Latvia: standard rate 21%, reduced rate 12%
Lithuania: standard rate 21%, reduced rates 5%, 9%
Luxembourg: standard rate 17%, reduced rates 3%, 8%, 14%
Malta: standard rate 18%, reduced rates 5%, 7%
Netherlands: standard rate 21%, reduced rate 9%
Austria: standard rate 20%, reduced rates 10%, 13%
Poland: standard rate 23%, reduced rates 5%, 8%
Portugal: standard rate 23%, reduced rates 6%, 13%
Romania: standard rate 19%, reduced rates 5%, 9%
Sweden: standard rate 25%, reduced rates 6%, 12%
Slovakia: standard rate 20%, reduced rate 10%
Slovenia: standard rate 22%, reduced rate 9.5%
Spain: standard rate 21%, reduced rates 4%, 10%
Czech Republic: standard rate 21%, reduced rates 10%, 15%
Hungary: standard rate 27%, reduced rates 5%, 18%
Cyprus: standard rate 19%, reduced rates 5%, 9%
The differences show that it is essential for merchants to know and apply the correct tax rates in order to comply with legal requirements and avoid problems with the tax authorities.
There is no standardization of VAT rates in the EU. Each member state sets its own tax rates. There is a standard rate that applies to most products and services, as well as one or more reduced rates for certain products. Here is an overview of the current VAT rates in Europe:
Belgium: standard rate 21%, reduced rates 6%, 12%
Bulgaria: standard rate 20%, reduced rate 9%
Denmark: standard rate 25%, no reduced rates
Germany: standard rate 19%, reduced rate 7%
Estonia: standard rate 20%, reduced rate 9%
Finland: standard rate 24%, reduced rates 10%, 14%
France: standard rate 20%, reduced rates 5.5%, 10%, 2.1%
Greece: standard rate 24%, reduced rates 6%, 13%
Ireland: standard rate 23%, reduced rates 4.8%, 9%, 13.5%
Italy: standard rate 22%, reduced rates 4%, 5%, 10%
Croatia: standard rate 25%, reduced rates 5%, 13%
Latvia: standard rate 21%, reduced rate 12%
Lithuania: standard rate 21%, reduced rates 5%, 9%
Luxembourg: standard rate 17%, reduced rates 3%, 8%, 14%
Malta: standard rate 18%, reduced rates 5%, 7%
Netherlands: standard rate 21%, reduced rate 9%
Austria: standard rate 20%, reduced rates 10%, 13%
Poland: standard rate 23%, reduced rates 5%, 8%
Portugal: standard rate 23%, reduced rates 6%, 13%
Romania: standard rate 19%, reduced rates 5%, 9%
Sweden: standard rate 25%, reduced rates 6%, 12%
Slovakia: standard rate 20%, reduced rate 10%
Slovenia: standard rate 22%, reduced rate 9.5%
Spain: standard rate 21%, reduced rates 4%, 10%
Czech Republic: standard rate 21%, reduced rates 10%, 15%
Hungary: standard rate 27%, reduced rates 5%, 18%
Cyprus: standard rate 19%, reduced rates 5%, 9%
The differences show that it is essential for merchants to know and apply the correct tax rates in order to comply with legal requirements and avoid problems with the tax authorities.
Practical Implementation: Shop Systems & Payment
To comply with all country-specific VAT regulations, the correct mapping in the online shop must be ensured. Tax calculation errors can have legal consequences and affect customer trust. With the following steps, you can efficiently integrate the respective EU sales tax into the most common shop systems:
WooCommerce: You can adjust the VAT rates via Settings > Taxes. In WooCommerce, you can also define tax classes for specific products. The geolocation function enables location-based tax calculation – simply activate it.
Shopify: Shopify offers automatic tax calculation, which is configured via Settings > Taxes. The OSS procedure is also supported. In addition, merchants with customers outside the EU can set import sales tax and other country-specific tax requirements.
Shopware: Tax rules can be individually defined for different countries and customer groups in the basic settings. Advanced pricing rules can be used to adapt the pricing strategy to legal requirements.
Magento: Magento offers a flexible tax matrix that can be customized via Stores > Configuration > Sales > Tax. Extensions allow tax rates to be updated automatically.
Optimizing the payment process
For a seamless shopping experience, you should offer your customers a wide range of payment methods. Mollie supports various European payment methods, including Przelewy24, TWINT and eps-Überweisung, and helps you to reduce the administrative burden so that you can concentrate on your core business.
Is sales tax charged within the EU?
Yes, VAT is charged on sales within the EU. The calculation depends on whether the buyer is a private individual or a company and in which country the purchase is made.
Who has to pay tax on goods for deliveries within the EU: the buyer or the seller?
In principle, the seller must calculate and pay the VAT, unless the sale is tax-free because it is to a business customer with a valid VAT registration number.
In which cases is EU VAT relevant for online traders?
VAT becomes relevant for traders in cross-border trade when sales to private individuals exceed the €10,000 turnover threshold.
How do I register for the OSS procedure?
To register for the OSS procedure, you can register online with the relevant tax authority in your own country and submit the required forms.
For sales to private individuals above the €10,000 threshold, the invoice must include the buyer's VAT. All legal requirements of the destination country must be observed.
What information must be included on invoices for EU countries?
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