What is VAT (sales tax) and how does it work
Earlier we have charged Swedish VAT to customers inside the EU that does not have a valid EU VAT number. From 1st. of July 2021 and onwards, we will use the VAT rate in the destination country.
The Value Added Tax, or VAT, in the European Union is a general, broadly based consumption tax assessed on the value added to goods and services. It applies more or less to all goods and services that are bought and sold for use or consumption in the European Union.
We will always check against the VIES database if an EU VAT number is valid or not.
1a. If the shipping destination is outside the EU (except the UK see below), no VAT is applied. All taxes and duties are due in the receiving end.
1b. If a buyer is located outside the EU and the shipping destination is inside the EU, VAT will be applied. The VAT can be refunded when crossing the border from the EU or the buyers shipper can issue the necessary export documents.
2a. If a buyer is located inside the EU and the purchase is done as a private person, sales tax is added. The amount will vary depending on which country you live in.
2b. If a buyer is a company located inside the EU without a valid EU VAT number, sales tax is added. The amount will vary depending on which country you live in.
2c. If the shipping destination is inside Sweden, VAT is applied in all cases except when a freight company can certify that the final destination is outside the EU. Also, the VAT can be refunded when crossing the border from the EU.
3. If a buyer is located inside the EU and is a company with a valid VAT number, no VAT is applied to the order. However, if the goods is imported from outside the EU the buyer may have to pay VAT and duties at arrival of the goods.
The United Kingdom special case
Please note that from 01-01-2021 the UK is no longer part of the EU the following apply when buying at Gearwise:
- For UK customers with a valid VAT number, we will invoice without VAT.
- For UK customers without VAT number, we will charge UK VAT (20%)
- Our system will check UK VAT numbers against HMRC
- Gearwise UK VAT number is 372745673
Value added tax is named different depending on country, but it is the same thing:
VAT – Mwst. – Ust. – BTW – TVA – DPH – PDV – moms – km – ALV – ÁFA – CBL – IVA – PVM – PVN – PTU