european VAT rules for e-commerce

The new EU e-commerce VAT scheme applied from 1 July 2021 means we will change how we charge VAT. On the invoice Dropshirt will calculate the VAT of the EU country to which we invoice the goods.

As we are a business to business platform and our contractual obligation is to you, the businesses ordering on our platform, the invoice billing address is therefore leading and not the shipping address (you have charged your customer VAT based on their shipping address). If you place an order on the Dropshirt platform with a Dutch billing address, nothing will change for you. We’ll charge 21% Dutch VAT. If you have a German billing address, you will pay 19% German VAT. The invoice will then be lower. If you have a billing address in Denmark, a VAT rate of 25% will apply and your invoice will be higher.

The ex-VAT amount for a product always remains the same, this is legally required by the 2018 Geo-blocking regulation. Therefore within the EU our "including VAT prices" will diverge.

If your billing address is in a non-EU country - for example United Kingdom, Switzerland or the United States - nothing will change for you. Orders invoiced to non-EU countries will not be charged any VAT at point of sale.

The table below shows the VAT rates per country. These are automatically calculated on the Dropshirt platform at the checkout.

You can read the entire law on the European Commission's official page: VAT for e-commerce.