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How will the new VAT rules in the European Union with effect from 1 July 2021 impact me?
- The local distance selling thresholds for sales to consumers within the European Union (EU) will be removed. VAT on sales to consumers within the EU must be paid in the consumer’s home country (the only exception being certain small businesses which stay below turnover thresholds).
- The VAT exemptions for imports of low-value goods into the EU will be removed. All imports of commercial goods into the EU will now be subject to VAT.
- Most importantly, marketplaces will now be responsible for the VAT collection on certain sales to consumers within the EU.
How is VAT charged on transactions in the European Union?
For VAT purposes, StockX has changed to an undisclosed agent model, whereby StockX acts as an agent facilitating transactions between Buyers and Sellers (i.e. Sellers sell their items to StockX and StockX sells the item to the Buyers). StockX then assumes the responsibility for collecting and submitting VAT payments. This impacts the way VAT is charged on the transaction and how invoices are issued, but it does not impact the legal relationships in the transaction which are defined in our Terms and Conditions of Use.
As a Buyer, how does this affect me?
For VAT purposes, when you buy items on StockX, they will now be considered a purchase from us as a Seller. You do not have to do anything. However, if you have a valid VAT registration number in the EU and you buy items as a business using this number, then please make sure to communicate this VAT number to us, as you may stand to benefit from the new guidelines. To learn more about how registering for a VAT number may benefit you, please check out our blog post on the subject. You can enter your VAT number in the account settings page.
I am a Buyer outside the European Union, how does this affect me?
No VAT will be applied by StockX. If the item is shipped from our Verification Centres in the Netherlands or Germany, the sale to you is considered an export sale of goods subject to zero-rating. The tax and customs treatment of the arrival of the goods in the country of destination will follow the Terms and Conditions of Use.
As a Seller, how does this affect me?
For European Union VAT purposes, you sell your items to StockX. The new VAT rules outlined above have no impact on this. However, if you have a valid VAT identification number in the EU and you sell items as a business using this number, please make sure to communicate this VAT number to us, as you may stand to benefit from the new guidelines. To learn more about how registering for a VAT number may benefit you, please check out our blog post on the subject. You can enter your VAT number in the Account Settings page.
I am a Seller outside the European Union. Does this affect me?
No VAT will be charged on your sale. If your item needs to be imported into the European Union, StockX will be liable to pay VAT on the import and will be responsible for the item’s customs clearance.
I am a Buyer inside the EU running a VAT-registered business. Why should I share my VAT number with StockX?
As a VAT-registered business, you will NOT be charged if your identification number matches your shipping address and billing details. If you do not share a valid VAT number with us, you will be charged the VAT in the country of your shipping address.
I am a Buyer inside the European Union running a VAT-registered business. How does this affect me?
If you have shared a valid VAT number with us, then the following applies:
- If your shipping and billing address is in the Netherlands, the StockX sale to you will be subject to the Reverse Charge Mechanism. This is because, even though the item is shipped from the StockX verification centre in the Netherlands, StockX LLC is a US company located outside the country. Therefore, as a Buyer, you are liable to pay VAT on this domestic sale under the Reverse Charge Mechanism, according to article 12, paragraph 3, Dutch VAT Act ("Wet op de Omzetbelasting 1968"). You must pay this VAT to the tax authorities through your own VAT return. StockX is not responsible for this and will not pay this on your behalf. We will issue you with an invoice without VAT, referencing the Reverse Charge Mechanism and your VAT identification number.
- If your shipping address is in another European Union country (not the Netherlands), the StockX sale to you is an intra-EU sale of goods subject to zero-rating in either the Netherlands or Germany (based on the verification centre location from which your item was dispatched). You should report an intra-EU acquisition of goods in the EU country of your shipping address. StockX will include this sale in its EC Sales List based on the VAT identification number provided by you. StockX will issue you with an invoice without VAT, referencing an intra-EU sale of goods subject to zero-rating and your VAT identification number.
I am a Seller inside the European Union running a VAT-registered business. Why should I communicate my VAT number to StockX?
StockX will create an invoice for your sales transactions in your name and on your behalf (Self-Billing). The invoice will include the appropriate VAT procedure for your sales.
I am a Seller inside the EU running a VAT-registered business. How does this affect me?
- If you are an individual liable to pay VAT and you ship the item from the Netherlands (your address) to our verification centre in the Netherlands (as shown on the shipping label), you must apply 21% VAT on your sale. StockX is acting as an undisclosed agent in the sale between you and the Buyer. For EU VAT purposes, this means that you are deemed to sell the item to StockX. Therefore, when you ship the item from an address in the Netherlands to our verification centre in the Netherlands, you make a domestic supply of goods to StockX within the Netherlands. StockX will create an invoice issued to StockX in your name and on your behalf. This invoice includes the VAT amount on your domestic supply of goods to StockX in the Netherlands. You should pay this VAT to the Dutch tax authorities through your own VAT return. StockX is not responsible for this and will not do this on your behalf. StockX will only add output VAT to your final payout and invoices if you have provided us with a shipping address in the Netherlands and a valid Dutch VAT identification number.
- If you ship the item from another EU country (excluding the Netherlands), your sale will be exempt from VAT (with the right to claim input VAT credits) or zero-rated (depending on the country where you are based). StockX will self-account for VAT on this transaction in either the Netherlands or Germany (depending on which verification centre receives your goods). StockX will create an invoice issued to StockX in your name and on your behalf (see FAQ Self-Billing). This invoice does not include VAT but shows a VAT exempt/zero-rated sale and StockX VAT identification number. You should report this transaction in your local VAT return and EC Sales List by quoting the StockX VAT identification number in the Netherlands. This VAT identification number is quoted on the Self-Billing invoice that StockX has created in your name and on your behalf.
I am a Seller located inside the European Union. How are my invoices issued to StockX?
- I am an individual liable to pay VAT, located inside the EU.
- You are required to issue StockX with a VAT invoice for the items you sell on our live marketplace based on the requirements and regulations of your local government (the country in your shipping address). StockX will create an invoice in your name and on your behalf (Self-Billing). The Self-Billing agreement between us, including the ongoing invoice acceptance procedure, is laid down in the Terms and Conditions of Use. We will provide you with a copy of the invoice you issue us with for the sale of items. You can find your invoices in your Seller history tab.
- I am located inside the European Union, but am not VAT-registered.
- You are not required to issue StockX with a VAT invoice for the items you sell on our live marketplace. StockX will still create an invoice document for you to confirm the sales you have made on our live marketplace.
- I am located outside the European Union
- You are not required to issue StockX with an EU VAT invoice for the items you sell on our live marketplace. There may be such a requirement for local VAT, GST, sales tax or equivalent transaction tax purposes in the country where you ship the items from. StockX will not create a document for you that meets any local invoice requirements. However, StockX will still create an invoice document for you to confirm the sales you have made on our live marketplace.
What is the Reverse Charge Mechanism?
Reverse Charge mechanism refers to the situation when buyers are accountable for VAT on their purchases, instead of the seller. The buyer must then pay and report the VAT to the tax authorities, instead of the supplier. This mechanism applies to specific transactions where the recipient of the supply is an individual liable to pay VAT. If you are buying goods on our live marketplace, the Reverse Charge mechanism applies in the specific circumstances outlined below (which may be updated from time to time).
- If you are a Buyer with a shipping and billing address in the Netherlands and you have provided us with your Dutch VAT ID, any sales made to you which are dispatched from our verification centre in the Netherlands are subject to the Reverse Charge Mechanism. Dutch VAT is due on those domestic sales within the Netherlands. However, StockX LLC (the seller of the goods) is not located in the Netherlands for VAT purposes. Since you are an individual liable to pay VAT located in the Netherlands, you must self-account for Dutch VAT on these domestic sales of goods under the Reverse Charge Mechanism, according to article 12, paragraph 3, Dutch VAT Act ("Wet op de Omzetbelasting 1968").
What is a Zero Rating?
VAT taxable supplies are generally subject to the standard VAT rate in the country where those supplies are taxable. However, certain supplies are subject to a reduced or zero VAT rate (rates vary across EU countries). Zero-rating may apply to B2B cross-border sales within/from the EU. In some EU countries, this is referred to as VAT-exempt supplies with the right to claim input VAT credits. It means that while no VAT is charged on the sale, it is still a taxable supply and therefore eligible for claiming input VAT credits. Zero-rating may also apply to specific products which are sold domestically (e.g. children’s shoes) in some countries. If you are selling or buying items on our live marketplace, then the following B2B cross-border transactions may be subject to zero-rating:
- You are a Seller located inside the EU (excluding the Netherlands) and have provided us with a valid VAT ID. Your sales are zero-rated when you ship the goods to our verification centre in the Netherlands.
- You are a Seller located inside the EU (excluding Germany) and have provided us with a valid VAT ID. Your sales are zero-rated when you ship the goods to our verification centre in Germany.
- You are a Buyer with a shipping address inside the EU (excluding the Netherlands and Germany) and have communicated a valid VAT ID (which matches your shipping address) to us.
- You are a Buyer with a shipping address outside the EU and we dispatch the items from one of our verification centres in either the Netherlands or Germany.
What is Self-Billing?
If you are an individual liable to pay VAT in the EU, you must generally issue VAT invoices for your B2B supplies. If you are located inside the EU and selling items on our live marketplace, you are selling those goods to StockX for EU VAT purposes. This is a B2B transaction. We are creating those invoices for you under a Self-Billing arrangement. In other words, we bill ourselves (in your name and on your behalf) for your supplies to us and we ensure that you have VAT invoices on record. You can export your invoices in your Seller history tab. Self-Billing is allowed under EU VAT, subject to a prior Self-Billing agreement and an ongoing invoice acceptance procedure. The terms of our Self-Billing arrangement are set out in our Terms & Conditions of Use. You will at all times continue to be responsible for sending VAT invoices to tax authorities. You are also responsible for storing and keeping the invoice documents throughout the statutory storage periods.
How do I register for VAT?
If you are selling items on our marketplace, you may be required to register for VAT in the EU country where you are located and/or shipping your items from. This is generally the case if you are running a small business. Please note that this is subject to the specific requirements in the EU country where you are located/shipping your items from. Some EU countries have implemented an annual turnover threshold below which you may not be required to register for VAT, but you may still be able to register for VAT voluntarily.
In some countries, you need to actively apply for such exemptions for small businesses, while you are required to register for VAT by default. You should consult the local tax authorities or a professional advisor if you seek advice on your specific situation. However, you can find a general overview of small business VAT exemptions on the EU Commission site (see "exemption for small enterprises"). Generally you can register for VAT via either an online portal or on a paper form. You generally need to provide information and documentation about your business and your activities.