When you start dropshipping, you should know that there are multiple things that will come up that you will need to follow. One of the things that you need to be wary of is VAT. When it comes to VAT, you should know whether it is applicable to you or not as a dropshipper. More than that, you will also need to pay close attention to the VAT invoice. Here you get to know what is a VAT invoice and all of the details regarding it.
VAT Invoice for Dropshippers: What to Pay Attention to
When running a dropshipping business UK or EU, are you concerned about what a VAT invoice is for dropshippers? While VAT in itself is complex to get a hold of, you should know that the VAT invoice is perhaps one of the major parts of it. You will need to make sure that you fill out the VAT invoice at the correct time once you have supplied the goods to the customers.
1. Who Must Issue a Vat Invoice?
When it comes to who issues the VAT invoice, you must know that it is you, the dropshipper who will be required to issue the invoice. However, there are certain conditions to this. The idea of regular and import VAT comes into play when it comes to the issuance. For regular VAT, you will be responsible for integrating the VAT into the product price. When it comes to import VAT, if your customer is the importer, then they will be the ones required to pay the import VAT. We will have a look at these soon to help you further understand how to go about the VAT the comes with dropshipping.
2. Regular VAT And Import VAT
Keep in mind that not every dropshipper has to create the VAT invoice or pay for it. You should know the details about how to move forward with the VAT by getting in the details first. There are two different kinds of VATS that are possible when you are dropshipping for your customers. These include the Regular VAT and the Import VAT. Let’s have a look at what each of them means.
- Regular VAT
The first one we will be talking about is the regular VAT. The possibility of a regular VAT occurs based on the origin of the place that your goods are being supplied from. As a dropshipper, if your goods are supplied from China, and then shipped to the EU, then you should know that no VAT is required. More than that, you should know that if you’re shipping goods to the EU that is not from the member countries, then there is no VAT applicable to you. So, you will not have to do anything about it.
- Import VAT
The other VAT is the import VAT. What we mean by the Import VAT is that you might think you are safe from the regular VAT, but there is a possibility that you might still have to incur the import VAT. Import VAT is only applicable to certain elements, meeting a specific threshold. But that is not all. There are products that do not have any import VAT exemptions at all, including tobacco-related products, alcohol-related products, tobacco, perfumes, and toilet waters.
3. Information Required on a VAT Invoice
There are multiple things required for a VAT invoice. Below are the VAT invoice details you will need to include:
- The invoice date
- The sequential number for the invoice
- VAT identification (if present)
- Name and address of the supplier
- Name and address of customers
- Details of goods/services supplied
- Payment/transaction date
- VAT rate applied
- VAT amount applicable
- VAT payable and exemption breakdown
- Unit prices of goods in question
As you can see, there are quite a number of details that need to go on your VAT invoice. These are essential to add as they ensure that you meet the requirements for VAT. Make sure to verify all of the details before you submit the VAT invoice.
4. Amendments in the VAT Invoice
There is a possibility of you making amendments in the VAT invoices. These can pertain to the incorrect input of pricing on the previous VAT invoices. If there is a possibility of an increase, you must know that you will have to show the relevant invoices that back your change as well.
Along with this, you will need to adjust the rates of VAT you are applying, the amount of VAT that goes with the rate, and a cross-reference that should prove the change in regards to the supply. This is all in the case of an increase in the price. If there is a decrease in the price, then the onus is on you to issue a credit note against your customer, so that you are able to reverse the payment they have made.
When it comes to dealing with VAT invoicing, you should know that you will be required to add the amount of VAT to your invoice so that you can pass it on to the customer. But this can get a bit difficult if you have no idea how to go about it. The good thing is that most dropshipping platforms offer you an easy way out to keep a check on your VAT invoices. For instance, you get to send your VAT invoice through Shopify. Your Shopify VAT invoice will not take long to add to your account either. You can also look at how to download VAT invoice from Amazon for the same purpose.
Bonus Tip: Automated VAT Invoicing Supported on SaleYee Dropshipping Platform
SaleYee dropshipping platform now helps you with the VAT invoicing process. It is to help you easily sell internationally in compliance with local laws and regulations! You can get to automate the invoicing process for yourself to save you the hassle of doing it manually. Click The Guide to VAT Information Registration & Automated Invoicing on SaleYee to see how easily it works for you.
Conclusion
All in all, we hope that you have understood what is a VAT invoice, and how you can deal with them easily. While there are plenty of options to go for, SaleYee simplifies the dropshipping business with an automated VAT invoicing process for you to a great extent. Dropshipping has never been easier, including all the hassle of VAT invoicing.
