Value Added Tax (VAT) is a consumption tax used in many countries, especially in the European Union (EU).
Whether you need to register as a VAT payer depends on factors like your customer's location, how goods are delivered, and local tax rules.
Since Framico is based in the United States, VAT obligations typically apply to you only when you sell and ship physical products into a country that has a VAT system.
As the seller, you are responsible for understanding and meeting the tax compliance requirements for the countries where your customers are located.
When VAT Registration May Be Required
You may need to register for VAT in a country if:
You sell physical goods to customers in countries that apply VAT.
You are listed as the importer of record for shipments entering those countries.
You exceed country-specific VAT registration thresholds, where they exist.
Local tax regulations require registration regardless of your sales volume.
For order fulfillment to the European Union (EU), VAT is generally calculated based on your customer's location, not where your business is based.
Marketplace vs. Storefront Sales
Your VAT obligations can depend on which platform you use to sell your products:
Marketplaces (e.g., Etsy, Amazon): These platforms often act as the official seller for tax purposes. They typically handle the calculation, collection, and payment of VAT on your behalf for sales within certain regions.
Independent Storefronts (e.g., Shopify): When selling through your own store, you are usually responsible for tax compliance. This includes determining if you need to register, calculating the correct VAT amount, collecting it from customers, and paying it to the correct tax authority.
Need Help?
For specific queries, please contact our support team at [email protected].