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Dropshipping in EU - VAT and Invoices

by Rima Adomaviciute
3 replies
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Hi all,

There is a lot of information about dropshipping in US, but there is really little about it in Europe where dropshipping is less popular and different laws applies.

I'm considering to open my own online shop and do dropshipping from few EU Manufacturers for EU costumers. I'm EU citizen myself living in Denmark where company will be registered.

Maybe someone already did it and can help by clearing some questions about VAT and customer Invoices? Seems EU is very unfriendly for dropshipping

So, the main questions I have is?
1. Do VAT applies to me - a third party?

2. What to do with invoices? One of the basic advantages of drop shipping, as practiced in non-EU countries, is that the person receiving the product not know that the product was drop shipped and that the invoice in the package is from the person they paid. Put another way, I, as a person who maintains a web site and wants to use drop shipping, do not want my customer to receive the invoice that is made out to me with the price that you paid for the product on it from manufacturer.

If I understand correctly EU laws - buyer gets the invoice with the dropshippers price and not the price that buyer paid for it. The invoicing is done this way because that is the way the VAT laws dictate it be done?


Hope someone already went this round and can share their experience, coz I'm feeling really lost in all these intricate laws of EU.


Cheers,
Rima
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#dropshipping #eulaw #invoices #vat
  • Profile picture of the author netkomm
    Please refer to this article for more info:

    European Ecommerce and VAT: The Essential Guide
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  • Profile picture of the author Splatterfox
    As a German eCommerce entrepreneur, the EU laws are also way more relevant to me than the US ones since I barely sell outside of Europe.

    Selling inside of Europe is quite easy, because it is very much standardized. Your customer does not neccessarily get an invoice in his package if you dropship. Your customer has nothing to do with the order, the transaction is made between him and you and you and the supplier. The only time the customer has to do something with the dropshipper is when he doesn't pay for import duties and your customer might have to pay it afterwards (you should refund that money after this of course).

    If you as a business sell to a customer in another EU state, the VAT of your home country applies. If you sell to a business (B2B), you can usually sell without any VAT at all and the buyer needs to tax it in his own country.
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    • Profile picture of the author Goran Bosnić
      Hi, im going through complex Croatian and EU regulative about this issue right now.

      Per my understanding, dropshipper actually sells service to some customer.
      And so now, what if my customer is in EU. How do you tax that service? Because you are actually selling your service to the customer. How do you tax it. What kind of invoice you issue (at leas for your own accounting?)

      Per Croatian laws (and they are compliant with EU laws of course), dropshipping is a service, you buy the product "in buyer's name"), and you charge your provision.
      OIn invoice, you must give buying price + your provision for your service, and thats total price for the buyer.

      SO, I dont understand, how it is so simple for you? Can you pls eludicate?
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