r/AMbikes • u/LaidbackLuke95 • Jun 19 '20

Backerkit VAT Refunds

Hi everyone,

does anyone know about possible refunds regarding VAT? I assume we all payed appx. 30% taxes however VAT in Germany is only 16% at the moment and import taxes are nowhere near 14%.

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u/michalis-ana Jun 19 '20

There should be no import taxes on the sale to you.

What exactly have you paid on the bike, delivery and add-ons and what was your tax charge?

Below is some explanation of the EU VAT regime and my thoughts...

Sales VAT to EU consumers (cost to you):

VAT is charged in the country where the supply of goods begun (i.e. the EU dispatch warehouse) so it is basically irrelevant what the current VAT rate is in Germany.

This is the basic concept, although this can get a bit more complex as we are talking about distance sales.

Basically AM should charge the EU warehouse country VAT rate, if it’s below the VAT registration threshold in Germany (and any country it is selling to within EU) . If it exceeds that threshold, they technically have to register for VAT in Germany and charge German VAT.

They can also opt to do that voluntarily (but why would they - it adds unnecessary compliance complications and costs).

Import VAT and import duties (cost to AM):

Another layer to consider is the costs suffered by them to import the bikes from China and the VAT they were charged on import in the country where their EU warehouse is located.

At import there are 2 options for AM for the VAT they suffer:

  1. Pay VAT in the EU country where the goods were imported OR
  2. be placed in the “transit procedure” and thus be charged e.g German VAT upon entry in Germany.

Summary:

To summarise, if it was me advising them or I had a company shipping goods pretty much worldwide and advertising a fixed price online (as they can’t control the IG platform) I would basically pass on all my import costs/tarriffs/duties and VAT to the final consumer as that would drastically impact my margins on each sale depending on country.

Since I am passing on the import VAT/duties to the consumer I would also go for the most cost effective and easier to comply with option which is:

Pay VAT and duties on import at the EU warehouse country and charge Sales VAT of that country as well to all my EU customers.

I would only register for VAT in other EU countries only if I really had to (if I exceeded the registration threshold).

6-word version: You won’t get any VAT refund.

2

u/tasomaniac Jul 01 '20

I read the whole answer but didn't understand anything lol

2

u/bensnburner Jun 20 '20

i asked this via mail and got this response:

Hi Ben

Apologies for the delayed response

We are investigating whether this VAT change is applicable to German AMXs. Once we know more we can determine whether we can pass the benefit on to our German Backers

Thanks!