To avoid VAT registration in their customer’s country, many businesses split the value of their supplies, with the value of goods accruing towards the registration threshold, and the cost of delivery being ignored for VAT registration purposes.
However, the UK and Belgian tax authorities have recently indicated that this ‘unbuckling’ of goods and delivery costs should be prohibited.
The EU VAT Committee agrees and has issued guidance stating that the distance selling threshold should take account of both the value of the goods and the delivery costs in any cases where the supplier intervenes directly, or indirectly, in the delivery of those goods.
This means that, for the delivery of goods to be excluded from distance selling thresholds, the customer must transport the goods themselves or arrange the delivery with a third party. Read more: Parcels delivering EU VAT registration problems – RSM