Which value-added tax rates apply to my products?
December 19, 2023 | 50,00 EUR | answered by Oliver Götzinger
Dear tax consultant,
I run a small business that manufactures and sells handmade furniture. So far, I have mainly focused on selling in Germany, but I am now planning to expand the sale of my products abroad. Now I am faced with the question of which VAT rates apply to my furniture.
I have only dealt with the German VAT law so far and know the VAT rates that apply there. However, I am unsure if these rates also apply to sales abroad or if there are different regulations in place.
My concern is that I may apply incorrect VAT rates and therefore encounter problems with the tax authorities. Additionally, I want to ensure that my prices for international customers are transparent and correct.
Could you please explain to me which VAT rates apply to the sale of my handmade furniture abroad? Are there differences depending on the destination country? What steps do I need to take to ensure that I apply the correct VAT rates and fulfill my tax obligations?
Thank you in advance for your help.
Best regards,
Thomas Krausmüller
Dear Thomas Krausmüller,
Thank you for your question regarding the VAT rates for the sale of your handcrafted furniture abroad. It is understandable that you are concerned and want to ensure that you apply the correct VAT rates to avoid issues with the tax authorities.
Generally, different rules apply for the sale of goods abroad compared to domestic sales. In your case, as you manufacture and distribute furniture, you need to familiarize yourself with the VAT regulations for cross-border trade in goods.
VAT rates abroad can vary depending on the destination country, as each country sets its own tax rates. Therefore, it is important that you research the VAT rates in the destination countries where you plan to export your furniture.
To ensure that you apply the correct VAT rates, I recommend that you consult with a tax advisor who is knowledgeable about international tax issues. An experienced tax advisor can help you determine the VAT rates for the destination countries and assist you in fulfilling your tax obligations.
Additionally, you should ensure that you maintain and keep all necessary documents and records properly to be able to demonstrate, in case of a tax audit, that you have applied the correct VAT rates.
It is important that you research VAT rates abroad early on and take all necessary measures to fulfill your tax obligations and avoid potential issues. If you have any further questions or need assistance, I am here to help.
Best regards,
Oliver Götzinger, Tax Advisor
