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United Kingdom Tax and Invoice Requirements

EU Distance Selling Threshold for Goods

Each country within the EU has a national VAT registration threshold. The EU has also created a special tax-collection system, known as Distance Selling, which aims to encourage trade across the EU and reduce the administrative burden for companies.

As a UK merchant selling and shipping goods to private individuals residing in the EU, you don’t need to register for VAT in the recipient country if your sales to that country are below the distance selling threshold. The applicable UK VAT rate should be charged on these sales. If your sales to a country within the same calendar year exceed the threshold, you must then register for VAT in that country and charge the applicable VAT rate.
This chart shows the VAT registration threshold for each country.

VAT Rates

The VAT rate depends on the type of goods or service sold, the country sold to, and whether the buyer is a business or private individual. Here’s some additional information from www.gov.uk on VAT rates for different types of goods and services.

Business to Business versus Business to Consumer

VAT requirements are different for sales to businesses than for sales to private individuals.
This webpage provides further information on VAT for businesses.

Digital Products

If you’re selling digital products to private individuals, VAT may be required. In that case, the applicable VAT rate depends upon the customer’s location.
Learn more about Electronically Supplied Services.

Disclaimer:

The links above are not maintained or updated by Square. This guidance is not intended as professional advice and if you are not sure about these details, please consult with a tax professional. The UK has left the EU and some tax legislation could change.

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