Borderfree and EU VAT

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3 years 9 months ago #549 by Nick
Nick created the topic: Borderfree and EU VAT
Back over on our ever popular Borderfree user experiences article, we have an ongoing issue with sales tax or VAT for a within EU purchase by a consumer or shopper.

Our very clued up shopper has recognised that Borderfree, when she purchased something at the famous department store in Knightbridge, London, called Harrods, deducted the UK VAT and then added the VAT rate of her own country where she lives.

She raised this with Borderfree and Harrods and didn't get the answer she was hoping for. Harrods said that it was nothing to do with them, and Borderfree said they are complying with EU law by only applying one instance of sales tax to the purchase.

Oh dear Harrods, their famous customers service is not what it once was! And Borderfree are only half right, they do only need to ensure one instance of VAT is paid, but they have chosen the wrong country, because within the EU you pay the VAT of the country where you purchased the goods. So in this shopping instance that would be the UK.

How do I know? I have done my research and found this on the official EU website:

"Pay VAT in the country where you shop
As a private individual shopping in the EU, you should only pay VAT once, in the country where you make your purchase."

From here

So it would appear that Borderfree have been applying the wrong VAT amounts to their customers' purchases for shopping within the EU.

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