VAT if drop shipping to Netherlands?

[MagicMike]

If you have a UK limited company and you are drop shipping products from China to the Netherlands, do you need to pay Dutch VAT on the sales? 

[VAT-adviser]

If you are dropshipping from Canada into the Netherlands, then the place of supply is considered to be where the goods are shipped from, rather than where they arrive. In this case, as the place of supply is outside of the EU, this means VAT is not due on the sale of the goods.

However, just because there is no VAT due on the sale, it does not mean that VAT should be ignored altogether. There may be import VAT due when you ship goods into the Netherlands/UK. Import duties and VAT is payable by the importer on record.

If you are dropshipping and your customer is the importer on record then technically the customer is responsible for the import VAT. If your business is the importer on record then your business will be liable to pay the import duties and VAT.

Hope this helps.

[MagicMike]

So let’s assume I am a UK limited company. I order products from China directly to customers in the Netherlands. So from what I understand, the Dutch customer pays VAT if the price of the product is above a certain amount. But the UK LLC does NOT need to register for Dutch VAT? Rather it would be subject to UK VAT rule (over £85,000 you must register for UK VAT)?

[euify.eu]

An answer to your question MagicMike… Your company MUST be VAT-registered in the EU if you’re dropshipping from China to the Netherlands, where the VAT must be paid by the customer. You cannot use your UK VAT number as, since Brexit, we are no longer in the EU. You also need an EORI number.

[Author]

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