As you might know, VAT registrations are necessary either when you store your goods in a warehouse in an European country or if you get orders online and sell from a warehouse to another country (that is called Distance Selling) and you reach the annual threshold limit of the country you are exporting to. Due to the fact that the VAT is a tax which has to be paid by the final consumer, countries will expect businesses to register with them in order to make these businesses pay the local VAT. For electronic or digital services to consumers there are no distance selling thresholds. The main idea behind these “VAT registration thresholds” was to reduce the bureaucratic expenditure for companies and to encourage them to grow and to expand to other European countries.
Online shopping has experienced a massive growth in the last decade and the tendency is still rising. E-commerce is set to account for over 20% of retail selling in EU within a few years. Nevertheless, there are some responsibilities for sellers which come along with this development, above all the responsibility for dealing correctly with all tax concerns. On the one hand to fulfill the guidelines and laws of the European Union to become/stay a respectable company and of course on the other hand to avoid fines and any damage regarding the image of the company.