VAT consequences of a return of goods

When customers return goods to a retailer, the seller must adjust the VAT on the transaction by replacing the invoice or issuing a credit. In the Netherlands, if a business sells and delivers goods to private consumers in the country from a Dutch warehouse, it must account for Dutch VAT. If the customer returns the goods, the business can reclaim the VAT paid on the transaction. In the case of an “EU distance sale,” VAT is due at the rate applicable in the country where the consumer is resident. A business has two options when declaring EU distance sales: use the One Stop Shop (OSS) or local VAT registration. The VAT consequences and availability of a VAT refund on returned goods differ depending on the option chosen. Businesses that bring their own goods from one EU member state to another member state normally must declare the movement in the country of departure and the country of arrival. If the distance selling scheme applies, the transfer does not have to be declared.

Source BDO

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