How to avoid VAT in EU when running an e-commerce website?

[Vigen]

We operate several e-commerce websites in Poland; we have our warehouse in the EU. Our biggest cost is the VAT. Are there any ways to avoid VAT, when running ecommerce businesses in EU?

 

[Marzio]

You can't avoid VAT on B2C sales in EU.

 

[chrisgerth]

You can't avoid VAT on B2C sales in EU.

Tell that mandmdirect.com, they are shipping exclusively B2C and every invoice I got from them (several EU countries) never had any VAT included.

 

[CyprusLawyer101]

Tell that mandmdirect.com, they are shipping exclusively B2C and every invoice I got from them (several EU countries) never had any VAT included.

Maybe it is embedded in the price?

 

[Vigen]

One of the theoretical possibilities of avoiding 18%-23% EU VATs is, what if:

1. One opens a company in Andorra or any other jurisdiction
located in European Economic Area, but not a member of the EU

2. Uses a EU-located warehouse to process sales without charging VAT(keeps 18-23% of the margin in his pocket this way)?

 

[CyprusLawyer101]

One of the theoretical possibilities of avoiding 18%-23% EU VATs is, what if:

1. One opens a company in Andorra or any other jurisdiction
located in European Economic Area, but not a member of the EU

2. Uses a EU-located warehouse to process sales without charging VAT(keeps 18-23% of the margin in his pocket this way)?

Not working like that. VAT would be payable on the goods based on the VAT rules of the country of selling.

 

[Vigen]

Not working like that. VAT would be payable on the goods based on the VAT rules of the country of selling.

According to my knowledge, the local tax authorities will not even care about it, as according to international law if VAT cross-border tax evasion is found by the local authority, the funds have to be sent to the country where VAT evasion was taking place (Lots of hassle, no gains). What can go with such a setup?

 

[JohnnyDoe]

Are there any ways to avoid VAT, when running ecommerce businesses in EU?

there are plenty, but they all lead to prison.

 

[chrisgerth]

Maybe it is embedded in the price?

As far as I know you have to state specifically how much VAT is included, the invoice they issue mentions none of it. Also interesting fact is that they are a UK company and they still can ship into EU without any customs etc.

 

[CyprusLawyer101]

As far as I know you have to state specifically how much VAT is included, the invoice they issue mentions none of it. Also interesting fact is that they are a UK company and they still can ship into EU without any customs etc.

Normally yes, this should be the case. Also what you say about customs is interesting, i dont know may certain rules where kept intact after the Brexit. But it is an interesting case study to look at.

 

[TheCryptoAnt]

Dont f**k with VAT; its the main source of government funding usually and they can get very violent.
Pass it to the customer.

 

[boomy]

If you sell digital services you could care less about VAT so many loopholes to circumvent the VAT issue!

 

[chrisgerth]

If you sell digital services you could care less about VAT so many loopholes to circumvent the VAT issue!

Such as?

 

[GPT]

VAT is the one tax which I would not mess around with. A handful of times per year stories surface of joint operations between teams of police from multiple countries in which they arrested vat evaders/avoiders.

Lately they seem to go more after digital products as well.

It’s a hassle to setup correct. Once you have done that there is not much other to do for you than to collect, report and transfer it to the respective tax department.

Also do understand that if you don’t collect report and pay that it can have negative effects on your bankaccount.

Many banks already require audited accounts and if you don’t deliver they close your account or certain facilities. Basically they are the extended arm for the tax departments nowadays.

Good luck.

 

[FantomOffshore]

The company you mentioned might simply be a link in missing trader fraud. It takes years to collect evidence for this type of fraud for authorities, so just because a company doesn't charge it doesn't mean they have some kind of loophole.

If you don't want VAT don't charge to European consumers.

 

[jakubko666]

If they are UK seller but their warehouse is in mainland eu, they simply use the trick, where customer is responsible for reporting a and paying the vat. But because items are in eu already, they are not processed via customs, so nobody is asking about missing vat.

 

[Newsecar]

We operate several e-commerce websites in Poland; we have our warehouse in the EU. Our biggest cost is the VAT. Are there any ways to avoid VAT, when running ecommerce businesses in EU?

Don't risk with that, you're gone be caught very fast. A few laws and directives give them all the info about you, the last one is CESOP. This one just started this year 2024, so take a good look on the Internet about what CESOP is. And interesting is that I don't see no one speaking about cesop

 

[JohnLocke]

The thread is 2 years old, so a lot has changed since then. Tax authorities around the world work significantly faster now than they did just 5 or 10 years ago. The reporting requirements imposed on payment processors now mean that if you receive payment with anything other than crypto, you can't avoid VAT.