New rules for VAT in the EU: How to state prices and VAT on your webshop
We provide practical advice on price information on webshops for those of you who sell goods exceeding the value of 10,000 EUR in other EU countries.
On 1 July, new EU VAT rules entered into effect, which, among other things, meant that there is one common distance selling limit that covers the distance selling of goods and electronic services to private consumers in the EU. This limit is 10,000 EUR, and if you sell above this amount in other EU countries, it is a requirement that you report correct VAT to the different countries. So, it would be a good idea to show and collect correct VAT rates on your webshop.
Get an overview of current VAT rates in the EU.
According to the EU Marketing Directive, you must state the correct price (including VAT and any taxes) the first time the item is displayed; so you can’t leave showing the correct price until checkout. This can be a challenge if you sell to multiple countries with different VAT rates. But fear not! We have several good tips for you here:
How to enter the correct prices on your webshop
To ensure that your customers get the correct price from the start, you can do a range of things.
One option is to have several different versions of your website for different countries. This solution offers a number of advantages in terms of location, which can be of great importance when you are in several markets.You can have the website in the customer’s own language and currency, and you can also more easily target content and campaigns. The disadvantage of this solution is that there will be more maintenance work regarding content on the websites.
So our advice is that you create a new version of your website only for a country that you sell a lot to, in order to obtain localization benefits, while retaining a main website for the other countries. The main website can be in English, and you can, for example, show prices in euros.
Please note, however, that it is still important that you show the correct price/VAT in relation to the various delivery countries on the main website.
Different domains vs. subdomains
If you go this way, you must decide whether you want to use different domains or subdomains under the main domain.
For instance, the Danish webshop Planke-bord.dk ApS’s webshop is called “planke-bord.dk” in Denmark, but their domains in Germany and Sweden are called “Plank-tisch.de” and “plank-bord.se”. Another webshop that also has different domains in different countries is the Danish company Zerv. The company has nine webshops. Their Danish domains are called “zerv.dk”, “ketshop.dk”, “tennisshoppen.dk” and “badmintonshoppen.dk”, while they, for instance, have the domains “padelxpert.nl”, “badminton-shop.de” and “tennisxpert.se” in the Netherlands, Germany, and Sweden.
You can connect all your webshops to the same Shipmondo account and manage all orders together in one platform. See how Zerv has succeeded with this in the case story here.
On the other hand, the Swedish clothing giant H&M has chosen to have several different subdomains under its main domain. When customers go to the webshop, they are asked to choose the country of delivery:
You can take advantage of the browser’s location service to see where the customer comes from and show the correct price depending on their location. If you use this solution, you can consider adding a pop-up message to your webshop that guides the customer to the correct country. Here is an example from ASOS.com:
No geo-blocking or redirection without consent
To ensure that European consumers are not discriminated against based on their geographical location when shopping online, a regulation entered into effect on 3 December 2018. Briefly, this means that, for instance, French consumers have the right to shop at your Danish webshop and thus buy at Danish prices instead of being redirected to a French version. You must not block or restrict your customers’ access to your webshop - just as you may not redirect the customer without their consent.
Although you must not exclude consumers in other EU countries from buying their goods on your webshop, you can legally opt to deliver in only Denmark, so that it is the consumer’s own responsibility to have the goods transported to their home country. You can state which countries you deliver to in your terms of trade.
VAT One-Stop-Shop
If you would like to have one single VAT registration, you can sign up for the new [VAT One-Stop-Shop model] (/blog/eu-vat-one-stop-shop/), which came into force on 1 July, 2021. You can sign up for this voluntary scheme if your sales of goods to consumers in other EU countries exceed the new common distance selling limit of EUR 10,000. That way, you can settle for one total VAT registration. If you are a small webshop that sells goods for less than 10,000 EUR in other EU countries, you can choose to charge 25% in all countries and simply report it as Danish VAT. That way, you avoid website versioning, VAT management, and extended VAT accounting.
Ship to multiple countries with Shipmondo
If you sell goods to several EU countries, you must have complete control of the shipping so that you do not get dissatisfied customers. You can get this with a free Shipmondo account. When you send goods to consumers throughout the EU, it is not inconceivable that you will need several different carriers - in terms of both availability and preference. On your Shipmondo account, you can use our shipping agreements with popular carriers from Denmark, Sweden and Norway - or use your own shipping agreement.
Read more about how to ship worldwide and learn about e-commerce in Europe here.
