Europe B2C Ecommerce Report 2013

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42 CROSS-BORDER E-COMMERCE IN EUROPE EUROPE B2C E-COMMERCE VAT Treshold varies between 35-100K in EU. Value Added Tax in the European Union The payment of VAT by online retailers is a tricky issue, although the principles are simple. VAT is chargeable on goods sold within a country using e-commerce or distance selling methods (e.g., mail order). If goods are shipped by the retailer from one EU member state to another, the VAT remains applicable when the customer is either a private person or a company not registered for VAT in his/its home country. Smaller businesses can simply charge their national VAT rate until a value threshold is reached, above which VAT must be charged at the national rate of the member state of the recipient. VAT of the Member State of destination is applied if sales in that Member State exceed a certain threshold, which varies between €35,000 and €100,000 or the equivalent in the national currency. For the threshold applicable in each Member State, see the Commission’s information document 62 . These thresholds are not applicable to goods containing alcohol. For instance, an online retailer selling wines to private persons should charge the VAT applicable in the country of destination right from the initial sale. Even if the threshold is not exceeded, traders can still opt to register for VAT in the Member State of the consumer and charge the VAT applicable in that country. It may be a commercial advantage if the VAT rate 62 “VAT in the European Union” or “Thresholds”. applicable in the country of destination is lower than the rate in the traders’ country. For instance: the threshold is €100,000 in France, Germany, the Netherlands and Austria, €35,000 in most other countries like Spain, Italy, Portugal and Finland, and £70,000 in the UK. Online retailers need to register in each of the countries where they have private customers and pay VAT to the national authorities. So a retailer charges the VAT rate of his country until his foreign sales have reached the threshold applicable in his own country, after which point he would charge 21% to Belgium and the Netherlands, 19.6% to France, etc. (See the applicable VAT rates in the EU Member States.) An example: the threshold in Luxembourg is €100,000 euro. The online retailer needs to register for VAT when in a given year the total sales to private persons in Luxemburg exceed this amount. The trader can also opt to register right from the first sale to a private person, which would mean that the customer does not have to pay 21% (if the trader is based in the Netherlands or Belgium) or 27% VAT (if the trader is located in Hungary), but only 15%, the applicable VAT rate in Luxembourg. Quite a difference for the consumer! It is the trader’s commercial decision whether he chooses to register separately in each member state concerned. These VAT rules only apply in the 28 Member States of the EU 63 . 63 Source: VDFR VAT Management 21% VAT-rate in Belgium and the Netherlands 27% VAT-rate Hungary 19.6% VAT-rate in France 15.0% VAT-rate in Luxembourg
THE EUROPEAN UNION (EU) – A BRIEF OVERVIEW EUROPE B2C E-COMMERCE 43 1957 Foundation year of the European Union The European Union (EU) – A Brief Overview The EU is an economic and political partnership between 28 European countries that together comprises about 40% of the continent. The EU was created in the aftermath of the Second World War. The first steps were to foster economic cooperation, the idea being that countries that trade with one another become economically interdependent and will there- fore be more likely to avoid conflict. The result was the European Economic Community (EEC), initially formed in 1957. Since then, a huge single market has been created and aims to develop its full potential. The founding members of the EU in 1957 were Belgium, France, Germany, Italy, Luxembourg and the Netherlands. In 1973 Denmark, the UK and Ireland joined, followed in 1984 by Greece, in 1986 by Spain and Portugal, and in 1995 by Finland, Sweden and Austria. Then, following the collapse of their regimes in 1989, eight countries from Central and Eastern Europe (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia) and Cyprus and Malta became EU members in 2004, followed by Bulgaria and Romania in 2007. Croatia joined the EU as its 28th member on 1 July 2013. Candidate countries are Iceland, Montenegro, the former Yugoslavian Republic of Macedonia and Turkey. Potential candidates for membership are Albania, Bosnia and Herzegovina and Kosovo. What began as a purely economic union has evolved into an organisation spanning policy areas that range from agriculture, through consumer protection and the information society to transport and travel. A name change from the EEC to the European Union (EU) in 1993 reflected this. The EU is based on the rule of law: everything that it does is founded on treaties, voluntarily and democratically agreed by all member countries. These binding agree- ments set out the EU’s goals in its many areas of activity. The EU has delivered half a century of peace, stability and prosperity, helped to raise living standards and launched a single European currency, the euro. The objective of the Single European Market (SEM) – the EU’s main economic engine – is to enable goods, services, money and people to move freely within the EU. Another key objective is to develop this huge resource to ensure that Europeans can draw the maximum benefit from it. As it continues to grow, the EU remains focused on making its governing institutions more transparent and democratic. More powers are being given to the directly elected European Parliament, while national parliaments are being given a greater role, working alongside the European institutions. In turn, European citizens have an ever-increasing number of channels for taking part in the political process. 28 countries Member of the European Union as of July 1, 2013
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Page 7 and 8: EUROPE: A BRIEF INTRODUCTION EUROPE
Page 9 and 10: EUROPE B2C ECOMMERCE 2012 EUROPE B2
Page 11 and 12: EUROPEAN REGIONS AT A GLANCE EUROPE
Page 13 and 14: EUROPEAN REGIONS AT A GLANCE EUROPE
Page 15 and 16: EUROPEAN E-COMMERCE, GOODS AND SERV
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Page 21 and 22: INTERNET ACCESS AND (MOBILE) USAGE
Page 23 and 24: INTERNET ACCESS AND (MOBILE) USAGE
Page 25 and 26: THE MATURE MARKETS EUROPE B2C E-COM
Page 31 and 32: THE EMERGING MARKETS EUROPE B2C E-C
Page 33 and 34: THE EMERGING MARKETS EUROPE B2C E-C
Page 35 and 36: FORECAST UP TILL 2016 EUROPE B2C E-
Page 37 and 38: ONLINE PAYMENTS IN EUROPE EUROPE B2
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Page 53 and 54: ABOUT THE AUTHORS EUROPE B2C E-COMM
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