What is VAT？

VAT is the abbreviation of Value-added Tax, which originated in France and is an after-sales value-added tax commonly used in EU countries, that is, the profit tax on the sale of goods. When the goods enter France (according to EU laws), the goods are subject to import tax; when After the goods are sold, the import value-added tax (Import VAT) can be refunded on the shelves, and then the corresponding sales tax (Sales VAT) will be paid according to the sales.

VAT is levied when importing goods, transporting goods, and trading goods between Europe or regions. VAT in Europe is collected by VAT-registered sellers and consumers in Europe, and then declared and paid to the tax bureau of the European country.

For example, after a Chinese seller cargo shipment a product from China to Europe and imports it into Europe, there will be corresponding import duties to be paid. After the product is sold on various platforms, the seller can apply for a refund of the corresponding value-added tax, and then pay the corresponding sales tax according to the sales in the corresponding country.

VAT generally refers to the meaning of value-added tax in the machine trade, which is levied according to the price of the goods. If the price is INC VAT, that is, tax is not included, Zero VAT is a tax rate of 0.

 Why must register European VAT?

1. If you do not use the VAT tax number when exporting goods, you cannot enjoy the VAT refund on imported goods;

2. If you cannot provide valid VAT invoices to overseas customers, you may face the risk of customers canceling the transaction;

3. If you do not have your own VAT tax number and use someone else’s, the goods may face the risk of being detained by the customs;

4. The tax bureau strictly checks the VAT tax number of the seller. Cross-border platforms such as Amazon and eBay now also require the seller to submit the VAT number. Without a VAT number, it is difficult to guarantee the normal operation and sales of the platform store.

VAT is very necessary, not only to ensure the normal sales of platform stores, but also to reduce the risk of customs clearance of goods in the European market.