This FAQ walks merchants through more details around VAT and how it's connected to gaining access & utilizing the FBW-EU-AMS warehouse as part of the Fulfillment By Wish (FBW) program.
1. Definition of VAT
VAT stands for Value Added Tax, which is, in general, a consumption tax in Europe. This tax applies to almost all goods sold in Europe. VAT may be charged to consumers upon purchase of the product.
To determine whether you have VAT obligations in an EU member state depends on how you carry out your business, i.e. country of establishment of your business, location of your inventory, level of sales that exceeds certain country thresholds.
If you are required to charge VAT on sale, your business has to be VAT registered in the relevant country’s jurisdiction and ensure timely remittance of VAT and fulfillment of other local laws and regulations.
It is important to note that the VAT rates vary between EU countries and between certain types of products. Wish recommends to rely on each individual country’s VAT authority website to determine the right VAT rate.
It is the responsibility of each Wish seller to ensure they are VAT-compliant and you should seek tax advice if you are unsure of your obligations. Learn more about VAT in the link below:
2. Short summary of reasons why merchants need to register for NL VAT when using the FBW-EU-AMS warehouse
When gaining access to FBW-EU-AMS warehouse, you will store your goods in the Netherlands and you sell the goods you store in the Netherlands to customers based in the EU. This requires you to VAT register in the Netherlands.
You may also need to register for VAT separately in other EU countries once your sales from the Netherlands to other EU countries exceed the distance selling VAT threshold (link), which differs per EU country.
You may face serious consequences from the tax authorities if you fail to comply with the VAT registration requirements, which means your business may pay VAT plus interest, financial penalties depending on VAT due, and length of time not complying. You may face being excluded from the FBW AMS program until you have demonstrated VAT compliance with the appropriate tax authorities.
3. How to VAT register in the Netherlands?
In the Netherlands, the majority of the tax authority websites and documents providing VAT information are in English. Please find below useful links to the Dutch tax authorities:
The website will provide a PDF form you can download to complete and return per post. The Dutch Tax authorities will verify whether all conditions are met and if that is the case VAT identification number should be sent by post within a few days.
If you are not sure how to proceed with obtaining VAT registration in the Netherlands, please contact your tax advisor or local tax office.
4. When do merchants need to issue VAT invoices?
Customers may request to receive VAT invoices in many EU countries. VAT laws in the country where you ship your goods from and where the customer is located may require you to provide a VAT invoice.
More information can be found on the European Commission’s website at https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/vat-invoicing-rules_en.
Wish recommends checking with your tax advisors on the EU invoice requirements.