When running a dropshipping business, you will need to know what does VAT mean to dropshippers. It is a common term used in the industry because of the frequent incorporation of it required in your transactions. If you’re not aware of what it is and how to incorporate it in your transactions, you will find all the details that you need here. Stay tuned to find out more details about VAT and what it means to dropshippers.
All You Need to Know about VAT for Dropshippers
Below are all the details necessary for you to understand what VAT is for dropshippers. Let’s have a look.
· What Is VAT?
VAT is essentially the value-added tax that is added to almost every good or service once it is sold. The idea behind this is that customers have to pay a tax based on what they purchase. When it comes to "what does VAT mean to dropshippers", you must know that there are certain specifications that you must be aware of.
For instance, you should know that inclusion of VAT in your sales in only applicable to your supplier is within the member countries of the EU. So, if you are supplied goods or services from other countries, such as China, then you will need to be required to add the VAT to the prices of the goods or services you are selling.
There are two different types of VAT that exist, including the regular VAT and import VAT. The regular VAT is only payable if your supplier exists within the EU. On the other hand, the import VAT is different. According to the latest amendments, sellers are required to pay VAT on all imports below 150€ at the point of sales. Previously, there was a threshold established that gave sellers an exemption. However, that has been overruled in the latest changes.
· When to Register for VAT?
If you’re storing your supplies within the member countries of the EU, then you must know that you will require a VAT identification number. What does VAT number mean? Well, essentially, it showcases that you have registered for VAT as a supplier and offers you a unique number as proof against your details.
You should know that every country in the EU holds a different threshold for VAT. So, you will need to make sure that you are keeping up with these as they can change over time. For instance, the threshold for Germany is 100€. So, if you are selling goods for more than this amount, you should ideally by registering for the VAT within a year to make things easier for yourself. That is the only way to go about it.
· The Importance of VAT for eCommerce Platforms
The way the online world is changing, it is necessary for the authorities to keep up with these as well. To meet with the consistent change, there have been changes in the way that VAT works as well. The EU has been more progressive about this than other parts of the world. Now, dropshippers and other online selling businesses can easily register with one EU country for the declaration of their VAT and its payment.
It has become extremely essential for eCommerce platforms to acquaint themselves with the idea of VAT and how to go about it. Doing so will only make the process of applying it easier, as VAT is surely to become mandatory for almost every online selling transaction. The changes in the VAT eCommerce UK suggest that there is a need for online sellers to become more aware of this as it is deemed essential in today’s time.
· Ecommerce Platforms That Should Know about the VAT
When it comes to who should know about the VAT, you should know that it includes all of the online selling platforms and other businesses selling goods to other countries. Ecommerce businesses should now be focused on VAT as well since there are fewer exemptions present for them than before. With the way that the EU is changing its VAT policies for dropshippers and others, you should know that there are no more exemptions present for sellers. So, taking advantage of the no-tax policy is no longer possible.
It is important for eCommerce platforms to help dropshippers to understand the importance of VAT as well. For instance, the Amazon VAT details and processing can help you figure out how to go about VAT invoicing and more. Along with this, you will also be able to download the invoice from there for your own benefit.
Why And How Should Dropshippers Deal with VAT?
Declaring and paying the VAT is essential for dropshippers under regular VAT or import VAT, whichever category you fall under. Due to the unfair advantage given to cross-border sellers, the EU has made relevant amendments to help its own countries. So, you will find a range of changes in their policies now. VAT is now applied to supplies of services by EU and non-EU sellers to consumers in the EU. This policy might be beneficial for the locals of the EU, but adds to the hassle of non-EU suppliers. You will be required to register with the EU, and then go for a VAT number for making sales in the EU.
saleyee.com Simplifies the Dropshipping VAT Process
In response to this, the SaleYee platform has launched the related effective VAT information registration & automated invoicing function for Non-VAT-registered users to submit the personal ID information, while for VAT-registered users to submit VAT ID numbers and other information as required. SaleYee dropshipping platform offers sellers the ability to add their VAT information so that automated invoicing and syncing orders becomes easier for them. With all of the orders you place, you will be able to make sure that that VAT is accounted for as SaleYee automates the entire process for you. Download individual and bulk VAT invoices with ease through the platform as well.
Conclusion
VAT is surely a complex mechanism present, which has now extended to online selling platforms. There is an emphasis on the declaration and payment of the VAT, which is why it is essential to make things easier for yourself. SaleYee helps you automate your entire VAT process, and ensures that you are up to date with all the changes you need to know.
