As a route to enter and do business on the European market,
foreign investors are looking more and more to European nations. Drop shipping
is becoming increasingly popular as a practical way for eCommerce business
owners to expand their reach and reach their target markets around the globe.
On July 1, 2021, new EU VAT regulations went into effect for firms in the EU as
well as those outside the EU, changing how VAT is assessed and the value of the
items that are subject to it.
Drop shipping: What is it?
Drop shipping, a type of retail order fulfillment, involves
accepting a customer order but not actually shipping the products. When a
product is purchased, the information about the order is given to a third party
(a manufacturer, wholesaler, or another merchant) who completes the transaction
and sends the products to the client. Drop shipping has gained popularity as a
means of managing an online company because it avoids the expense of keeping
inventory in a warehouse or physical store and only needs access to the
internet.
Things to think about before
launching a drop shipping business
·
Create a new corporation in the country of your
choice.
·
Depending on the nation where the business is
headquartered, a drop shipping company may need to file annual reports and pay
income tax or corporation tax.
·
Sign up for VAT (if applicable).
·
Opening a business bank account.
·
Find an internet vendor who carries the
merchandise you want to buy. Such well-known businesses as Spocket, AliExpress,
and Modalyst connect drop shippers with suppliers all over the world.
·
Create a virtual website with an eCommerce
platform. Alternately, you could decide to sell on one of the well-known
drop-shipping platforms like Alibaba, eBay, Amazon, Shopify, or any other
BigCommerce stores.
Due to the simplicity and effectiveness of registering and
establishing a business there, Euro Company Formations suggests selecting
Poland, Hungary, and Italy as an EU base to register your drop shipping
business.
New EU Vat Regulations for
Dropshipping Businesses
With the introduction of the VAT reform on July 1, 2021,
similar business conditions for both EU and non-EU companies were made
possible. The new EU VAT regulations and rates for either One-Stop-Shop (OSS)
or Import-One-Stop-Shop must be adjusted by Drop Shipping Companies selling to
EU clients (IOSS).
Companies can utilize the One-Stop-Shop (OSS), an electronic
site that streamlines the VAT Return procedure for EU sellers, to fulfill their
VAT responsibilities on their e-Commerce sales to customers. This tool enables
businesses to:
All intra-Community sales of goods and services must be
registered for VAT electronically in a single member state.
Use a single electronic quarterly return to declare and pay
EU VAT on all supplies of goods and services.
Regardless of whether their sales are international, they
should communicate with the tax administration regarding the returns.
Businesses can now use the Import-One-Stop-Shop (IOSS)
electronic platform to fulfill their VAT e-Commerce requirements on imported
items. Both taxable persons inside and outside the EU may utilize the IOSS.
New EU VAT Regulations
eCommerce companies must now collect VAT at the moment of
sale; the customer is no longer responsible for paying this fee upon import.
Above a fixed EU-wide threshold of €10,000, VAT will be due
in the member state where the goods are delivered.
Due to the fact that all things sold on online marketplaces
now have to be under €150, the VAT on some B2C transactions may need to be
adjusted.
The VAT exemption for imported products costing less €22 has
been eliminated. No matter how much they cost, all items sold to clients
domiciled in the EU are liable to VAT, and items from outside the EU no longer
receive advantageous VAT treatment.
Any imported items valued at more than €150 are subject to
both import duties and VAT using conventional import processes, whereas all
imported goods valued at less than €150 are just subject to VAT.
Drop shippers who use EU inventory may use the OSS
(One-Stop-Shop) program; drop shippers who sell items in the EU but are not
based there may still register for OSS.
A single VAT return can be filed for all EU sales using
either the IOSS or the OSS system.
E7 figured out a shipping option for
EU customers
Who are not willing to see Chinese tracking when they order
from you, E7 figured out a shipping option for EU customers.
This delivery option guarantees the following:
·
There will be no Chinese trail in the tracking
numbers.
·
The same amount of money and time commitment as your
prior modes of shipment.
·
The same high standard of customer service from
our team.
·
No issues with either Chinese or European Union
customs.
You and your customers will only receive tracking numbers
indicating the path from local warehouses to customers\’ addresses according to
your target countries if you choose to begin with this particular shipping
option. If you do so, you will only be able to ship to the countries that you
have specified as your primary focus.
Both the delivery time and cost will remain the same, and E7
will ensure that the same level of reliability will be maintained throughout
the logistical process. In the event that your store requires manual labor in
order to fix other potential tracking issues, our agents will most certainly assist
you through this process.