Get a European Union (EU) VAT number for selling online via Amazon the most effective way! Be compliant with the new EU VAT rules meant for online sellers from China to Europe!
Don’t endanger your online e-commerce business selling to Europe!
Setup a Cyprus (EU) Company with the lowest Corporation tax rate in the region with a working bank account and VAT number.
2020 and 2021 were great years for online commerce businesses based in China. Since China managed to tackle the pandemic swiftly a lot of online businesses were ready to start shipping to consumers and businesses based in Europe were there were still under lockdown.
What are the new VAT regulations affecting online businesses in China selling to Europe via Amazon or other sites?
The EU has implemented new VAT rules on e-commerce sales which may affect your sales of goods to consumers in the EU through online stores including Amazon, eBay, Rakuten, Alibaba and several others.
If your business is not registered for VAT in the EU and you are established in China; Amazon will collect VAT on the sales of goods delivered to your customers in the EU.
More accurately they will collect VAT on the following two conditions:
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Goods are delivered from inventory stored outside the EU in a delivery with a value of up to EUR 150 (called Import One Stop Shop)
OR
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Goods of any value are delivered from inventory stored in the EU where you, the Seller, are not established in the EU.
The most important takeaway is that trading into Europe via an online platform (Amazon, EBay, etc.) forces many Chinese entities to register a EU company as it is nearly impossible to get a VAT number for a Chinese or any other foreign company.
Why the new VAT rules are important?
These rules will be particularly significant for anyone selling goods online or running an online marketplace.
Everyone in the e-commerce supply chain is affected, from online sellers and marketplaces/platforms both inside and outside the EU, to postal operators and couriers, customs and tax administrations, right through to consumers.
Non-compliance may lead to fines penalties and potential loss of lucrative business.
You may need to obtain a foreign EU VAT number as a Fulfilment by Amazon (‘FBA’) seller because you have exceeded the VAT distance selling registration threshold, or because you are storing goods at one of Amazon’s foreign warehouses.
When do you need to VAT register in another EU country?
If you are already VAT registered in China, then you won’t need to immediately register for VAT in the countries of your customers to sell to them. The EU, which sets the rules for VAT in the 27 member states, has set VAT registration thresholds for foreign FBA sellers. If you are selling below these annual thresholds in a particular country, then you don’t need to register there and you can charge the VAT under your own domestic VAT number.
However, if you are selling to the EU above the thresholds, Amazon and other online marketplaces require you to obtain an EU VAT registration number. The only way you can obtain an EU VAT number is by establishing an EU company.
Important notice here is that EU VAT thresholds differ per EU member state. Proper consultation should be sought.
Ok fair enough you were saying something about establishing a Cyprus (EU) company?
Yes, correct.
If you exceed the VAT threshold numbers, you can establish a Cyprus company where you can sell your products and services in Europe in a more tax efficient and quick manner.
You can obtain a Tax number and VAT number in a number of days. This will not disrupt your online business and you will have your piece of mind that your ecommerce business can continue operating in all 27 EU countries!
The important aspect of the Cyprus Company is that the VAT number of the Cyprus company you receive will allow you to trade freely with all 27 countries of the EU.
In other words, this makes your VAT compliance easier!
Cyprus is a member of the EU and is well known for its favourable tax status, this makes e-retailers to access the second-biggest economy in the world freely.
Adding to this, Cyprus has one of the lowest corporate tax rates in the EU, being 12.5%. And if you are a non-resident of Cyprus then Cyprus does not levy you a dividend tax if you choose to repatriate the profits of the company back to China.
Our office can help you out form the company in Cyprus as well as offer you competitive prices on Nominee directors, secretary and filing requirements. And since we have an Active China desk we can help you out in your native language.
And a working European Bank account?
Yes, this is very important. Without a bank account this cannot work properly. Our office is a bank introducer to many banks in Cyprus as well as Electronic Money Institutions. Our aim is to find the appropriate bank that works for your best interest. Not the other way around.
Wait I am not an expert in VAT forms!
That’s fine. Our team in Oneworld are the experts in VAT!
Our team can help you out in receiving a VAT number in a number of days. Furthermore, we can help you out with VAT form submissions forms in a timely manner so that you and your e-business remains compliant. And if there is a VAT refund to be handed out to you; we will make sure you get it.
Hire Oneworld to broaden your sales to the EU!
The recent VAT requirements of Amazon and other e commerce sites may affect the EU sales of many Chinese sellers. Many Chinese sellers may stop selling products in the EU due to the increased complexity and rising costs of having to register for VAT in each of the EU member state.
Stay ahead of the herd and grasp the opportunity for more EU business! We can help you with VAT as well as setup a Cyprus company with a working bank account.
Contact us for a free consultation in Chinese! We bring a depth of experience to our work and dealings with clients. Our executives consist of chartered accountants, lawyers, financial advisors, tax specialists, administrators and company secretaries.
Don’t waste time, contact us now!