Understanding VAT Compliance in EU Countries: Fundamentals, Cross-border Transactions, and Consequences of Non-compliance

• VAT (Value-Added Tax) is a tax on the final purchase of goods and services.
• Local VAT is paid by the buyer, but collected by the seller on behalf of the tax office.
• Cross-border VAT applies when a buyer from one EU country purchases goods from a seller in another EU country.
• If the total value of annual cross-border sales remains below €10,000, businesses are not required to register for VAT in that country.
• VAT rates can differ within a country depending on the type of goods and services.
• The One Stop Shop (OSS) allows businesses to declare and pay VAT for all their cross-border sales through a single VAT return.
• Storing goods in a different EU country may trigger a tax obligation in that country.
• Failure to register for VAT can result in fines, penalties, legal action, and retroactive VAT liability.
• Non-compliance with VAT regulations can lead to suspension or removal of selling privileges on platforms like Amazon.

Source: vatai.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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