european VAT rules for e-commerce

Created by Lotte van Dijk, Modified on Sat, 07 Oct 2023 at 05:31 AM by Lotte van Dijk


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.


Country
VAT rate
Austria
20%
Belgium
21%
Bulgaria20%
Cyprus
19%
Czech Republic
21%
Germany
19%
Denmark
25%
Estonia
20%
Greece
24%
Spain
21%
Finland
24%
France
20%
Croatia
25%
Hungary
27%
Ireland
23%
Italy
22%
Lithuania
21%
Luxembourg
17%
Latvia
21%
Malta
18%
The Netherlands
21%
Poland
23%
Portugal
23%
Romania
19%
Sweden
25%
Slovenia
22%
Slovakia
20%


 

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

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