As an e-commerce seller in Europe using Shopify services, it’s important to be aware of European VAT regulations. This guide helps you set up European VAT for your Shopify webshop and gives you tips for successful declarations.
Fundamentals of European VAT
To start with, it’s essential to understand the basics of European VAT: VAT stands for Value Added Tax. It’s a consumption tax levied on goods and services within the European Union (EU). The VAT rate varies by EU member state and can differ per product category. As a Shopify seller, you are obliged to charge VAT on the products you sell within the EU, whether your business is based in Europe or not.
Setting up European VAT on Your Shopify Webshop
Follow these steps to correctly set up European VAT on your Shopify webshop:
- Register for a VAT number: Apply for a VAT number with the tax authorities in the country where your business is based or where you store goods. If you’re selling in multiple EU countries, you may need to register for multiple VAT numbers.
- Add your VAT number to your Shopify settings: Go to the Shopify admin and add your VAT number under “Settings” > “Taxes”. Shopify will automatically apply the correct VAT rate based on your VAT number and the location of your customers.
- Set VAT rates for different product categories: Some product categories have a different VAT rate. Set these rates under “Settings” > “Taxes” > “Override”. Optionally add new product categories and assign the correct VAT rate.
Important Tips for Successful VAT Declaration
Keep accurate records of all sales, including sales price and VAT amounts. Submit your VAT declaration on time to avoid fines and penalties. Note: the deadlines vary by EU member state. If you’re selling in multiple EU countries, consider using the (M)OSS scheme ((Mini) One Stop Shop) to simplify your VAT declaration.
In this article, we’ve discussed the fundamentals of European VAT for Shopify sellers, as well as setting up European VAT on your Shopify webshop. We’ve also provided some key tips for successful VAT declarations. By following these steps, you can ensure that your webshop complies with European VAT regulations and that you can submit your declaration in an efficient and timely manner.
To get the most out of your Shopify webshop and manage European VAT in the most efficient way, we recommend contacting Staxxer. We specialize in cross-border VAT declarations in Europe. We can provide you with expert tailored advice and further assist you in navigating the complex European VAT regulations. Contact us today for a no-obligation conversation.