As an online entrepreneur, you certainly need wholesale prices, including for your administration. What exactly wholesale prices entail, and how the price differs from the purchase price, we explain here. In addition, a few other related terms are discussed in this article, such as the ICP declaration and tariff numbers.
What are Wholesale Prices?
Wholesale prices are purchase prices. These prices are used, among other things, for the VAT calculations of goods movements. A wholesale price is the price you pay to buy a product. You can also add other costs (such as shipping costs). Therefore, wholesale prices are not necessarily the same as purchase prices.
What do you need the Wholesale Prices for?
We need the wholesale prices to calculate the VAT on goods movements. For example, when products move from Dutch stock to a German storage, it must be reported in your VAT return. These goods have a value, the wholesale price. This is what you need to submit.
We never had to provide Wholesale Prices, why do you suddenly need them?
It may be that you previously only sold products from your establishment country and therefore never moved stock to another country. Since there was no goods movement, submitting wholesale prices was also not necessary.
If our software detects a goods movement, we will request the wholesale prices from you so that we can make the correct calculations.
What are the consequences of a high/low purchase price? Does it have to do with taxes?
No, you don’t pay tax on the goods movement. You can determine the height of the wholesale prices yourself, but they must be somewhat reasonable. We will only use them for the calculation of the goods movement.
Since it may be a fictitious price, you can use a percentage for convenience and have our tool fill it in, for example, 30% of the gross selling price. That saves a lot of work.
Do I need to arrange anything in my country of establishment?
Yes, in the country your business is registered in, you must report the value of the products in an ICP declaration.
For convenience, an example:
- You sell badminton rackets for €20 including VAT.
- Wholesale prices are set at 30% in Staxcloud software.
- The Wholesale price for this is therefore €6.
- 100 rackets are sent from the Netherlands to the FBA center in Germany. These goods have a value of 100 x €6 = €600. This has consequences for the Intra-Community Services (ICP declaration). You declare it in the Dutch ICP declaration with the mention of your German VAT number, i.e., the country of destination to which the goods are being moved.
- In the Netherlands, this is reported as an Intra-Community Delivery or Supply to Germany (ICL / ICS) to Germany for a value of €600.
- In Germany, this is reported as Intra-Community Acquisition (ICV / ICA) from the Netherlands for a value of €600.
- Since badminton rackets have a high VAT rate in Germany of 19%, 19% VAT is declared for the Intra-Community Acquisition in Germany. €600 * 19% = €114.
- Because VAT can be claimed back, this €114 is also reported as ‘input tax’ or paid VAT in Germany.
- So in the end, €0 VAT has to be paid. It is only important that the same amounts are reported in the Netherlands and Germany, otherwise, the declaration is not correct.
Processing Wholesale Prices in your ICP declaration: mandatory
How do I ensure a correct ICP declaration in the country of origin?
You can best use Staxcloud for this. In your country of establishment, not only the turnover made is stated, but also Intra-Community Delivery or Supply (ICL / ICS) which you can take over literally in an ICP declaration.
Also discuss internally and with your accountant the best way for you to keep track of the wholesale prices. For example, you could use a standard 30% of the gross selling price.
Is an ICP declaration mandatory?
Yes, an ICP declaration is mandatory. It is also extremely important that the amounts in your ICP declaration match the amounts that we have declared for you. Therefore, the use of Staxcloud is highly recommended!
How do I know what I need to report in the ICP declaration, can I see this data somewhere in Staxcloud?
Yes, the data can be found in Intra-Community Delivery or Supply (ICL / ICS).
Example: You have moved goods from the Netherlands (own stock) to the German FBA stock.
- Dutch dashboard: the following amount should be reported in your ICP declaration, as you have moved goods from the Netherlands to Germany. You do not pay tax on this because a reverse charge scheme is applied.
- German dashboard: the same amount is in your German dashboard. We declare this amount in your German declaration. Because VAT can be reclaimed, we do that immediately in the same declaration. This €122.65 is then ‘pre-tax’. Therefore, you do not pay VAT on the goods movement.
What are tariff numbers?
A tariff is a tax on imported goods and the tariff number, also known as a tariff code or HS code, gives customs officials more information about what kind of item is being imported. The standard code is a six-digit number, but some countries have codes of 8 or 10 digits.
What do you need the tariff numbers for?
The tariff number helps to determine the tax rate. If no tariff code is entered in Staxcloud, we always take the high rate. In order to be able to determine whether your product falls into the high or low VAT percentage, we ask for the tariff numbers. An overview with all numbers can be found on this page.
Can I fill in Wholesale Prices and tariff numbers at once in Staxcloud?
Yes, you can. If there are missing wholesale prices, you will see a warning message in the VAT summary of that country. For example: Staxcloud -> Dashboard -> Czechia -> Warning message about missing wholesale prices. When you click on more information, you can fill in all the data. Additionally, it is possible to export an Excel sheet, and once it is filled in, upload it back into Staxcloud. You can do that at Staxcloud -> Products -> Excel export and to upload the file again you go to Products -> Go to imports. You can use both methods to enter wholesale prices, but only the second one to enter tariff numbers.
When there is no warning message for a specific country, there are no missing wholesale prices you have to fill in!
Still have questions?
Then you can always schedule a free one-on-one consultation with us. Our VAT experts are ready for all your questions, and together we can look at which VAT picture suits you and your business best.