Importing to another EU country to avoid VAT

Zander1983

Hi
We're planning to import 300 items from China. I'm a little confused about VAT.

So, each item costs about $16.50 to make and its about $150 for shipping. So to produce and ship it's approximately $17 per item.

I'm going to use Amazon FBA (fulfillment by Amazon) so I just need to ship to an Amazon warehouse and they'll handle the packaging and posting of sales.

So if I ship to the Amazon warehouse in Ireland, the cost will be:

Import to Ireland:
Production cost + shipping + custom duty (2.9%) 17.49
VAT (23%) 4.02
incl VAT 21.51

We pay 4.02 VAT to revenue on each item.

Sell on Amazon:
Sale price 40
customer VAT 9.20
Total price 49.20

We pay 9.20 to revenue and claim back 4.02 - is this correct?

What if someone from, say, Switzerland bought the product? They would pay VAT of 8% which is 3.20. Would we then still be able to claim back the 4.02 in VAT we paid?

I'm asking because I'm wondering if it would be better to ship to an Amazon warehouse with a cheaper VAT rate. For example Luxembourg, which has an Amazon warehouse and a VAT rate of 15%

Thanks

WerewolfGM

Zander1983 wrote: »

Hi
We're planning to import 300 items from China. I'm a little confused about VAT.

So, each item costs about $16.50 to make and its about $150 for shipping. So to produce and ship it's approximately $17 per item.

I'm going to use Amazon FBA (fulfillment by Amazon) so I just need to ship to an Amazon warehouse and they'll handle the packaging and posting of sales.

So if I ship to the Amazon warehouse in Ireland, the cost will be:

Import to Ireland:
Production cost + shipping + custom duty (2.9%) 17.49
VAT (23%) 4.02
incl VAT 21.51

We pay 4.02 VAT to revenue on each item.

Sell on Amazon:
Sale price 40
customer VAT 9.20
Total price 49.20

We pay 9.20 to revenue and claim back 4.02 - is this correct?

What if someone from, say, Switzerland bought the product? They would pay VAT of 8% which is 3.20. Would we then still be able to claim back the 4.02 in VAT we paid?

I'm asking because I'm wondering if it would be better to ship to an Amazon warehouse with a cheaper VAT rate.

Thanks

You pay vat in the landed eu state
In Ireland you pay vat on duty and vat and duty on shipping
In some countries you would pay less
Switzerland isn't in the eu though
Are you vat registered ?

Zander1983

WerewolfGM wrote: »

You pay vat in the landed eu state
In Ireland you pay vat on duty and vat and duty on shipping
In some countries you would pay less
Switzerland isn't in the eu though
Are you vat registered ?

Sorry just edited the post, I was thinking of importing it to Luxembourg as its the place with an Amazon FBA warehouse and a lower VAT rate (15%).

So we're not VAT registered. We just recently came up with this idea and decided to try it out. We haven't registered a company or anything yet.

WerewolfGM

Zander1983 wrote: »

Sorry just edited the post, I was thinking of importing it to Luxembourg as its the place with an Amazon FBA warehouse and a lower VAT rate (15%).

So we're not VAT registered. We just recently came up with this idea and decided to try it out. We haven't registered a company or anything yet.

you don't have to charge vat if you arent vat regged you do have to pay it
luxembourg is far away where are you selling into is there a shipping difference
tbh you should get an hour with an accountant

Zander1983

WerewolfGM wrote: »

you don't have to charge vat if you arent vat regged you do have to pay it
luxembourg is far away where are you selling into is there a shipping difference
tbh you should get an hour with an accountant

Will be shipping around Europe. Shipping costs aren't high are the package is very light. Will talk to an accountant so. Thanks