Thresholds (Before 1st of July, 2021)
The seller must pay the VAT return in the provider EU country of the goods, which means where the delivery starts. Accordingly, the seller has to VAT registered the Company in the Tax Authority of the country where the products coming from in the European Union.
If your company is located in another European country and you comply with one of the following two conditions, you have the liability of the VAT register and VAT compliance in Germany.
- If the warehouse where you stored your goods is located in Germany or
- If you exceed the German Threshold of annual sales (€ 100.000 Net price).
After goods are stored in one of the German warehouses, retailers can start selling their products. For Europe this means: Sales tax is to be paid in the state where the delivery starts (B2C deliveries). For B2B other regulations apply. Those deliveries are normally free of tax. However, most deliveries are B2C.
All European countries have different tax rates. Consequently, Non-European companies can benefit from storing their goods in a country with a low tax rate. As already mentioned Amazon has warehouses in the following countries: Germany, UK (Warning Brexit), Spain, France, Italy, Poland and Czech Republic.
European states have thresholds. If the threshold is exceeded, taxation according to the country of destination – not origin – begins.
Example:
The threshold to Austria is 35,000 EUR per year. The online retailer supplies his B2C customers with goods from his warehouse in Germany. On 10.25.2018 the threshold of 35,000 EUR is surpassed. Consequently, sales tax changes from 19 % for Germany to 20 % for Austria. This also means that invoices need to be written according to Austrian law (every European country has different invoice regulations) and the sales tax needs to be paid to the Austrian taxation authorities.
| EU-STATE | THRESHOLD | STANDARD TAX RATES |
| Belgium | 35,000 EUR | 21% |
| Bulgaria | 35,791 EUR | 20% |
| Denmark | 37,557 EUR | 25% |
| Germany | 100,000 EUR | 19% / 7% |
| Estonia | 35,000 EUR | 20% |
| Finland | 35,000 EUR | 24% |
| France | 35,000 EUR | 20% / 10% / 5.5% / 2.1% |
| Greece | 35,000 EUR | 24% |
| Ireland | 35,000 EUR | 23% |
| Italien | 35,000 EUR | 22% / 10% / 5% / 4 % |
| Croatia | 36,000 EUR | 25% |
| Latvia | 34,052 EUR | 25% |
| Lithuania | 36,203 EUR | 21% |
| Luxemburg | 100,000 EUR | 17% |
| Malta | 35,000 EUR | 18% |
| Netherlands | 100,000 EUR | 21% |
| Austria | 35,000 EUR | 20% |
| Poland | 40,293 EUR | 23% / 8 % / 5 % |
| Portugal | 35,000 EUR | 23% |
| Romania | 28,012 EUR | 20% |
| Schweden | 36,232 EUR | 25% |
| Slovakia | 35,000 EUR | 20% |
| Slovenia | 35,000 EUR | 22% |
| Spain | 35,000 EUR | 21% / 10% / 4% |
| Czech Republic | 46,570 EUR | 21% / 15% / 10% |
| Hungary | 32,257 EUR | 27% |
| United Kingdom | 81,843 EUR | 20% / 5 % |
| Cyprus | 35,000 EUR | 18% |
