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VAT (value added tax) is a tax that European Union (E.U.) retailers are required to pay for purchases for their store. Faire 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. Some retailers on Faire may not be VAT registered, and orders to such retailers will be treated as B2C supplies. See further information on this below.
Brands are required to obtain VAT registration in E.U. countries for B2B transactions if at least one of the following criteria is met:
If you meet at least one of the requirements above, you must register for VAT in all countries where you meet this criteria. If this criteria is not met, you likely do not need to be VAT registered for B2B transactions in those specific E.U. countries.*
All E.U. brands are required to provide their VAT registration status. You may add your VAT information in your Account Settings at any time. If you do not have a VAT number and do not meet your country’s threshold for registration, please select the "I don't have a VAT number" checkbox.
*You are responsible for determining if you need to be VAT registered in each country you sell your products. Please consult your tax advisor for VAT implications for your business.
VAT will be applied to your orders based on where you (the brand) are shipping the products from at the point of sale. There are three different types of orders you may receive on Faire:
Please see below to learn more about how Faire will manage these different shipments. We also recommend checking your “Ship From” address before fulfilling orders. You can review this on each order details page and adjust accordingly.
Please note: If you are fulfilling orders from the E.U. to a non-E.U. retailer, Faire will not collect VAT. These retailers will be charged customs and duty at the border.
Domestic shipments:
For any products that brands are shipping domestically, as long as the brand is VAT registered, Faire will collect VAT from the retailer at checkout and then remit this VAT payment to the brand as part of their order payout. The standard VAT rate of the retailer’s country will be added to the invoice.
If the brand, however, is located in another E.U. country but shipping the products from the same country as the retailer, Faire will check to see if the retailer’s country allows for reverse charge. If the retailer’s country allows for the reverse charge mechanism, Faire will not collect any VAT on the order and indicate on the invoice that no VAT was collected due to reverse charge. It will then be the brand and retailer’s responsibility to complete the reverse charge on their VAT invoice.If the retailer’s country does not allow for the reverse charge mechanism, Faire will collect VAT at checkout and remit this VAT to the brand as part of their order payout.
Intra-Community Supply:
With intra-community supply, Faire will not facilitate any VAT charges for VAT registered retailers. Faire will note on the invoice that the order is considered intra-community supply for their records. The retailer is responsible for accounting for this transaction on their returns.
If the retailer is not VAT registered, Faire will charge the VAT rate of the retailer's country. You can read more about this here.
International shipments:
For any products a brand ships from outside the E.U. to an E.U. member state, 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 ensure the retailer is not double charged for taxes.
For more information on VAT implications for your business please consult your tax advisor.
Please note: If you are an E.U. brand shipping to a retailer outside of the E.U. (including the U.K.), we will not charge/remit VAT in the order. Retailers will be responsible for paying any duty/fees at the border.
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