If you are selling abroad over the internet you need to be familiar with the VAT rules relating to (a) the sale of goods and (b) the sale of services.
Sales of Goods
Selling goods to businesses within the EU
If you are selling goods to businesses in the EU, you can zero-rate supplies once they are registered for VAT in the other EU country.
Selling goods to consumers within the EU
If you are selling goods to consumers (not businesses) in the EU who are not registered for VAT in that country and you are responsible for the delivery, this is considered a ‘distance sale’. You should charge Irish VAT and include it in your Irish VAT returns.
However, if, in any calendar year, your sales to consumers in a particular member state exceed its “registration threshold”, you must register for VAT in that state, apply its VAT rate and pay and file to its tax authorities.
For example, the registration thresholds in Germany & the UK are €100,000 & £70,000 respectively. Elsewhere it can be as low as €35,000.
Selling goods outside the EU
If you are selling goods to businesses or consumers outside the EU the supply will be zero-rated for VAT.
Sales of Services
Selling services to businesses within the EU
If you are selling services to businesses in the EU, the place of taxation is where the recipient is established. No Irish VAT will be chargeable.
Selling services to consumers within the EU
From 1 January 2015, the rules around the EU VAT place of supply of services changed. This affects the sales of digital services (broadcasting, telecommunications and e-services) from a business to a consumer (private individuals & non-business entities). The place of taxation depends on the location of the consumer.
Where digital services are supplied on a business-to-consumer basis, the supplier is responsible for accounting for VAT on the supply:
- To the tax authority.
- At the VAT rate applicable in the consumer’s EU member state.
The supplier of these services will be required to register for one of the following:
- The VAT Mini One Stop Shop (VAT MOSS).
- VAT in the member states where you have non-business customers.
It is recommended that traders opt for the MOSS approach when sorting out their EU VAT obligations. Under MOSS, companies can use one member state as a base, rather than having to register in each country for VAT.
Selling services outside the EU
If you are selling services to businesses or consumers outside the EU the supply will be zero-rated for VAT.
Please contact our taxation department if we can assist you with the above.