How does VAT work for Non-E.U. European orders?

VAT (value-added tax) is a tax that European retailers are required to pay for all purchases for their store. Petspace will facilitate this charge and its remittance to brands under certain circumstances, as explained below.

Please note: VAT laws differ for business to business (B2B) and business to consumer (B2C) relationships. All transactions on Petspace are B2B transactions. If you have any questions about how to facilitate direct to consumer orders not on Petspace, we suggest contacting an advisor to assist with those transactions or the marketplace you are conducting business through.

Do I need to register my business for VAT?
Brands outside of the European country they are transacting with are required to obtain VAT registration for B2B transactions if at least one of the following criteria is met:

– Brand has business entity in the European country they are selling to
– Brand has fulfillment logistics within the European country they are selling to (ie. warehouse or fulfillment center where you will ship orders from)
– Brand plans to ship products to themselves within the European country before fulfilling to their European retailers

If none of the above criteria is met, you do not need to be VAT registered for B2B transactions in that specific country. If you are in Europe, please consult your tax advisor for VAT implications for your business.

How does VAT apply to my orders?
VAT will be applied to your orders based on where the brand is shipping the product from at the point of sale. Please see below to learn more about how Petspace will manage domestic and international shipments.

Domestic European shipments:

For any products brands are shipping from within a specific European country to a retailer in that country, Petspace will charge the retailer the standard country VAT at checkout for the transaction. This will then be automatically remitted to the brand in their order payout.

Please note: In any case where a brand is shipping goods to retailers domestically, the brand will be required to enter their VAT registration information into their account before they are able to fulfill European orders. You may also add your VAT information in your Account Settings at any time.

International shipments:

For any products a brand ships from outside their European country, VAT charges will not be included at checkout for the retailer. Retailers will be responsible for paying VAT at the border when collecting the goods in addition to any duty. Retailers will be notified of this requirement during checkout.

In these cases, VAT charges will not be remitted to the brand regardless of whether or not the brand is VAT registered. Since VAT is applied to orders based on the ship from address (ie. where the order is fulfilled and shipped to retailers) this will also ensure the retailer is not double charged for taxes.

For more information on VAT implications for your business please consult your tax advisor.