This FAQ walks merchants through details around VAT and how it's connected to utilizing the FBW-EU-AMS warehouse as part of the Fulfillment By Wish (FBW) program.
1. What is 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.
Determining 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 exceed certain country thresholds.
If you are required to charge VAT on sales, your business has to be VAT registered in the relevant country’s jurisdiction. You must 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 relying on each individual country’s VAT authority website to determine the correct VAT rate.
It is the responsibility of each Wish seller to ensure they are VATcompliant. Please seek tax advice if you are unsure of your obligations. Learn more about VAT in the link below:
2. Why do merchants need to register for Netherlands VAT when using the FBW-EU-AMS warehouse?
When utilizing the FBW-EU-AMS warehouse, you may store your goods in the Netherlands and you may sell the goods you store in the Netherlands to customers based in the EU. This requires you to register for VAT 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, 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, plus financial penalties depending on VAT due and length of time not in compliance. You may face being excluded from the FBW program until you have demonstrated VAT compliance with the appropriate tax authorities.
3. How to register for VAT in the Netherlands?
Please see the below links for more information on Netherlands VAT registration::
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.