Please note that information provided in this article does NOT constitute tax, legal, or other professional advice.
The European Union (EU) Value-Added Tax (VAT) on goods sold to customers in the EU applies to:
- Imports into the EU
- Supplies within the EU by non-EU domiciled merchants
- Cross-border supplies by EU domiciled merchants
Information below outlines the EU VAT and lists merchant actions to help with compliance.
- All goods imported into the EU are subject to VAT.
- The distance sales threshold for intra-EU cross-border supplies has a EU-wide threshold of €10,000. EU domiciled merchants with annual sales of more than €10,000 must remit VAT in the EU country where the goods are being shipped (i.e., destination country).
Shipping to the EU From Outside the EU
- If the consignment value of an order is less than or equal to €150, Wish calculates, collects, and remits VAT to the EU tax authorities. Therefore, please ensure that the product price and shipping price you provide excludes the VAT amount. This VAT is declared and paid via Wish’s Import One-Stop Shop (IOSS).
- Consignment value is the total customer-paid product price for all products that a customer purchases in a single transaction from an individual merchant, excluding shipping, taxes, and duties.
- If the consignment value of an order is greater than €150, Wish calculates and collects VAT, and passes the VAT amount to the merchant when the merchant receives payments for this order. Therefore, please ensure that the product price and shipping price you provide excludes the VAT amount. VAT amount for these orders must be remitted by merchants to customs. As the shipment should arrive to the customer’s location as Delivered Duty Paid (DDP), please coordinate with the freight forwarder on how import VAT and customs duties are handled on your behalf.
Shipping to the EU From Within the EU
EU domiciled merchants and non-EU domiciled merchants with an EU establishment:
- You must inform Wish of your status (EU domicile or non-EU domicile with EU establishment) so we may determine your VAT obligation. Non-EU domiciled merchants considered to have an EU establishment have the same EU VAT obligations as EU domiciled merchants.
- You are responsible for remitting VAT to the EU tax authorities, and you have two options to calculate and collect VAT for intra-EU orders: That is to set up or not set up Tax Settings in the Merchant Dashboard.
- If merchants DO set up Tax Settings: Once Tax Settings for EU destination countries are set, reviewed, and verified, Wish calculates and collects VAT for intra-EU orders based on the country of arrival of the goods (regardless of the EU-wide distance sales threshold of €10,000) and passes the VAT amount to merchants to remit to the tax authorities. If choosing this option, merchants must ensure that the product price and shipping price exclude the VAT amount. Note the VAT calculation (as provided by Wish, if Tax Settings has been properly activated) assumes that the distance sales threshold of €10,000 is exceeded or waived by the merchant through their own tax administration. (In this case, a waiver means that VAT at country of origin does not apply even if the mentioned distance sales threshold has not been exceeded.)
- If merchant DO NOT set up Tax Settings: The merchant is responsible for calculating and collecting VAT without relying on Wish’s Tax Settings support before remitting VAT to the EU tax authorities.
- UK and EU merchant shipping refurbished electronics within the UK or EU: Follow the "Guide to Selling Refurbished Electronics" for merchant responsibility regarding VAT margin schemes.
The preceding EU VAT information does not apply to these EU territories:
- Åland Islands
- Campione d'Italia
- Canary Islands
- French Guiana
- French territories of Guadeloupe
- Island of Heligoland
- Italian waters of Lake Lugano
- Mount Athos
- Territory of Büsingen
Non-EU domiciled merchants without an EU establishment:
Wish calculates, collects, and remits VAT directly to the EU tax authorities via Wish’s One-Stop Shop (OSS), regardless of the consignment value.
Actions to Aid With Compliance
1. Complete EU Tax Settings (applicable to EU domiciled merchants and non-EU domiciled merchants with an EU establishment)
EU domiciled merchants and non-EU domiciled merchants with an EU establishment can set up EU Tax Settings for their EU destination countries via the Merchant Dashboard's Tax Settings page.
Note: UK and EU merchants shipping refurbished electronics should NOT enroll refurbished goods in Wish’s Tax Settings page since it does not support refurbished goods. Please see the "Guide for Selling Refurbished Electronics" to learn more.
2. Update Secondary Warehouse Addresses (applicable to all merchants shipping to the EU from Secondary warehouses; Merchant Dashboard merchants only)
To ensure correct EU VAT collection and remittance, merchants with Secondary warehouse(s) shipping orders to the EU need to provide or edit the warehouse address(es) via Merchant Dashboard. This is especially important in the context of EU VAT if the current warehouse address is missing or inaccurate.
All merchants shipping orders to the EU must keep their warehouse inventory and addresses up to date at all times, so that the VAT collection can be determined for EU-bound orders shipped from each relevant Primary and/or Secondary warehouse. Wish monitors a merchant's EU-bound orders to minimize discrepancies of originating countries/regions and takes necessary measures if certain fraudulent behavior is detected.