First of all, let’s explain the term distance selling and distance selling thresholds – these occur whenever services or any goods are sold without face to face communication between buyer and supplier no matter the business field – let it be aviation, food ar any other industry. It includes TV shopping, mail orders, phone calls or SMS and any orders on the Internet. Also, these goods can be both digital and physical. Do you want to know more about selling thresholds? Read further.
Know the threshold limit
A fact is that every country has its distance selling threshold which is responsible for VAT duties in Europe countries. When the threshold limit is reached within a calendar year, additional country import VAT numbers should be acquired.
The VAT should be registered for when crossing the VAT registration threshold within 30 days or if you have earned more than indicated distance selling thresholds over 12 months.
What to do after meeting the VAT threshold?
After you have reached the turnover of the current Vat threshold, you must register for VAT in 30 days. Once you’ve done it, you and your business will become responsible for charging VAT on the services and goods, paying the VAT for your bought services and goods. Also, you will need to submit an annual VAT return and keep VAT records and the account.
Cases when you don’t need to register?
If your distance selling thresholds turnover is temporary, when you might not need to register for VAT – this is an exception. Before that, you have to prove that your taxable sales will stay below the VATthreshold to HMCR.
Before any distance selling, it is important to get to know what thresholds are and follow the rules to fulfill the requirements. In doing so, your business will be successful and won‘t experience any critical situations.