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Charging VAT when selling to outside EU?

  • 26-05-2010 2:26pm
    #1
    optimusgrime
    Registered Users, Registered Users 2 Posts: 56 ✭✭


    Hello,

    Quick question, suppose I'm selling an item of clothing online that I charge €10 for.

    When I sell within the EU customer pays €10, of this, €2.10 VAT goes to Revenue.

    Supposing I sell to a customer in the US.

    Do I charge them €7.90 for the item as I do not have to pay VAT on it or how does it work?

    Any advice would be much appreciated.

    Thanks


Comments

  • #2
    J_Wholesale
    Closed Accounts Posts: 245 ✭✭J_Wholesale


    Yes, you charge them €10 less VAT, which is €8.26. However, very few Americans know what VAT is, and probably assume that the price is the price.

    Not advocating this, just saying.


  • #3
    optimusgrime
    Registered Users, Registered Users 2 Posts: 56 ✭✭optimusgrime


    Thanks for the reply.

    I'd be trying to offer Americans a lower price to compete with their prices so being able to sell at €8.26 instead of €10 would be a plus.

    Would it be legal to charge the €10 to US customers in any case? I'm guessing not.

    Thanks


  • #4
    antoinolachtnai
    Registered Users, Registered Users 2 Posts: 9,815 ✭✭✭antoinolachtnai


    Yes it is perfectly legal to charge them 10 euros. If they place an order, they are ordering based on an inclusive price.

    One alternative possibility to offering a lower price to the US is that you use the extra 17 percent to cover the shipping cost to the US.

    You will need to be aware that if you grow the business, and if the items are more than 20 or 30 euros, US import taxes will raise their ugly head.


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