Are there any special features in value added tax in cross-border business?
November 28, 2022 | 50,00 EUR | answered by Emma Wagner
Dear tax advisor,
my name is Petra Karpinski and I run a small online trading company that exports products to different countries. Lately, I have been increasingly dealing with the topic of value added tax and have come across some questions that I would like to clarify with you.
Currently, I am unsure if there are any specific features regarding value added tax in cross-border business. I have heard that there are different regulations in the respective countries and that some products may be exempt from value added tax. Furthermore, I am not sure if I need to fill out certain forms or documents in order to correctly pay the value added tax.
As I am afraid of making mistakes in value added tax and risking high penalties or back payments, it is very important for me to get clarity on this matter. Can you help me and explain possible features of value added tax in cross-border business? Are there specific steps I need to take to fulfill my value added tax obligations correctly?
I thank you in advance for your support and look forward to your help in clarifying these questions.
Sincerely,
Petra Karpinski
Dear Mrs. Karpinski,
Thank you for your inquiry regarding the sales tax in cross-border business. As a tax consultant specializing in sales tax issues, I am happy to assist you and provide you with some important information on this topic.
In cross-border trade, there are indeed some peculiarities to consider, especially regarding sales tax. Basically, every delivery or service that you provide to a customer in another EU country is subject to sales tax. You must differentiate between intra-community and extra-community deliveries. For intra-community deliveries, you do not have to charge sales tax, as the customer must pay the tax in his country under the reverse charge procedure. For extra-community deliveries, you must invoice the sales tax, unless the delivery is exempt from sales tax.
It is important to consider the correct sales tax rates for the respective countries and also comply with the different reporting obligations. In some countries, you must submit special documents such as Intrastat reports or summary statements to fulfill your sales tax obligations. Therefore, it is advisable to inform yourself in advance about the regulations in the target countries and seek support from a tax consultant in the respective country if necessary.
To avoid errors in sales tax and prevent possible penalties or additional payments, it is advisable to seek professional help. A tax consultant can help you correctly remit the sales tax, fill out all necessary documents, and fulfill reporting obligations. Additionally, they can inform you about possible tax exemptions and help you efficiently fulfill your sales tax obligations.
I hope that this information has been helpful to you and I am available for any further questions. For personalized advice, I recommend scheduling an appointment for a personal consultation.
Best regards,
Emma Wagner
Tax Consultant
