Handling VAT and GST

Post here any issues you experience when trying to sell items on SellMyRetro.com

Handling VAT and GST

Postby rwap_software » Sun Dec 30, 2018 2:17 pm

As the EU heads towards extending VATMOSS to apply to cross-border sales of physical goods (from 2020) we need to look at how VAT is covered on SellMyRetro.com

At present, SellMyRetro.com is not VAT registered - although this may change in the near future, however, the situation is quite complex:

[*] VAT and GST on fees we charge sellers.
This is an extremely complicated bit of legislation - there is a whole thread about this - viewtopic.php?f=3&t=115

From January 2019 (whilst SellMyRetro remains a UK based business, and thus part of the EU), our total fees will be under the annual threshold for EU VAT on e-services (€10,000) which will make things easier. However, if the UK leaves the EU in March 2019, it appears at present that we will lost the benefit of that threshold :(

[*] VAT Registered Sellers
[*] At present, we do not show any VAT details on the offer details page or the user's profile / shop page.

Should we include just a general line saying that "listings include taxes where applicable" and include the VAT number provided by the seller in the "Meet the Seller" section? The better option would be to show the actual VAT included in the price of the item (the seller would need to insert their VAT rate - assuming each item has the same rate of VAT!).

Do we need to show the full address for business sellers?

Where would be the best place to include details on the profile / shop page?

[*] Do we need to include the VAT number on the invoices created by SellMyRetro for fees (even though we are not currently VAT registered?

[*] Should the VAT number be included on the invoice / order details page when viewed by the buyer? We could also split off the VAT amount on this invoice if you wish (if you provide the correct VAT rate and all listings have the same VAT rate!). Sellers should of course provide their own VAT invoice when supplying the goods.

[*] What should we do with pricing where the purchaser is outside of the EU? Do sellers just charge them the same amount, but retain the VAT element, or should the price be reduced by the VAT element?

[*] GST on cross-border sales of goods to a consumer in Australia
Australia brought in rules for cross-border sales of goods to consumers in Australia from 2018. Thankfully, individual sellers only have to worry about this where they make more than €75,000 AUD worth of sales to Australian consumers in any year. That same threshold also applies to SellMyRetro as a marketplace, so to date (unlike ebay), we do not have to worry about this as total sales through SellMyRetro to Australia are less than €75,000 AUD per annum.

[*] VAT on cross-border sales of goods to a consumer based in an EU country (from 2020)
From 2020, the EU are implementing their own version of the Australian approach. This is promoted as an extension of the "successful" VATMOSS system, whereby any business selling to consumers within the EU may have to register for VATMOSS, calculate the VAT rate according to the location of the buyer (!) and pay for it through VATMOSS.

The EU are introducing this with an annual sales threshold, but at present, it looks as though that threshold will be just €10,000 worth of sales to the whole of the EU (excluding sales within the EU country in which the business is based, if any). Compare this to the current rules, where a business has to register for VAT within any EU country where the total sales to that specific EU country is €35,000 (or €100,000 depending on the country).

It is unknown whether sellmyretro.com will be made responsible for calculating, collecting and paying this VAT and what the impact of BREXIT might be on this.

The threshold is ridiculously low for physical goods and with each EU country having numerous VAT rates for different types of goods, working out the correct rate of VAT to be collected and paid over could be horrendous.

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