How do I calculate value added tax for cross-border deliveries?
August 30, 2023 | 30,00 EUR | answered by Günther Hering
Dear Tax Advisor,
My name is Xenia Schröder and I operate an online business that also conducts cross-border deliveries to customers in other EU countries.
So far, I only have experience in calculating value-added tax for deliveries within Germany. However, I am now facing the challenge of calculating the correct value-added tax for cross-border deliveries. I am aware that special regulations apply here and various factors, such as the destination of the delivery, must be taken into account.
I am concerned that I may make mistakes in calculating the value-added tax for cross-border deliveries and could potentially face legal issues as a result. Therefore, it would be very helpful for me if you could explain to me how I can correctly calculate the value-added tax for cross-border deliveries.
Could you possibly also provide me with tips on how to avoid errors in the calculation and what documents I need for the correct invoicing of the value-added tax? Are there perhaps software solutions that can help me correctly calculate the value-added tax for cross-border deliveries?
I would greatly appreciate your support and expertise on this matter.
Thank you in advance.
Kind regards,
Xenia Schröder
Dear Ms. Schröder,
Thank you for your inquiry regarding the calculation of value added tax for cross-border deliveries in your online trade. It is understandable that you are concerned about possible errors and want to avoid legal issues. I will gladly explain to you how to correctly calculate value added tax for cross-border deliveries.
Special regulations apply for cross-border deliveries within the EU. Value added tax is usually levied at the place of destination of the delivery. This means that depending on the country to which you are delivering the goods, you must apply the respective value added tax rate of the destination country. It is important that you are aware of and correctly apply the different value added tax rates in the various EU countries.
To avoid errors in the calculation of value added tax, I recommend that you inform yourself about the current value added tax rates in EU countries and regularly check them. Furthermore, you should ensure that your invoicing is correct and includes all necessary information, such as your VAT identification number and that of the customer.
For the correct invoicing of value added tax, you need, among other things, a proper invoice that clearly shows the value added tax separately. Additionally, you should carefully keep the proof of movement or other evidence of the cross-border delivery.
There are also various software solutions that can assist you in calculating value added tax for cross-border deliveries. These programs can automatically calculate the correct value added tax rates for the respective EU countries and minimize errors.
I hope that this information will help you and make you feel more confident in handling the calculation of value added tax for cross-border deliveries. If you have any further questions, please do not hesitate to contact me.
Best regards,
Günther Hering
