1.7.2021 - VAT solution for dropshipping

Interesting question, have you already spoke to an CPA or other tax professional?

@Leon there is no solution so far.

We already received many requests about it and so far we could only give the advise to keep Dropshipping outside the EU as you still have most of the big markets outside the EU or you have to do the Dropshipping with local EU suppliers and forming yourself an EU entity.

However it's getting tighter each year so expect that you won't be able to do any business in EU with a Hong Kong company in the future. Adopt the EU rules to your business or avoid the EU.

Leon said:

But this is not an acceptable solution for us, since it would reduce our profits significantly and the whole setup would become obsolete. (we are non-EU residents)

I don't know how you can lose on this, you only have to charge VAT to persons not companies / businesses. You can simply apply the VAT rate when you sell to persons / individuals and take it of if they are a business ?

You can also go further, use a Cyprus company and just forget about to charge the VAT!

he never got back which means he may realized that his big issue indeed not was an issue :D

lory said:

he never got back which means he may realized that his big issue indeed not was an issue :D

We noticed from several clients with Dropshipping Business Model that there is 0 enforcement right now of the customs in the EU - only Amazon an other big market places were introducing this immediately and a lot of accounts got blocked.