VAT rules for dropshipping

Hello there, A UK-based company planning to engage in a dropshipping operation with Printify, where the products are manufactured within the EU. We will be selling these products to customers in both the EU and the UK. Given the complexities of VAT and customs regulations, especially post-Brexit, we seek clarity on several key points: Origin of Goods and VAT: Considering the products are made in the EU, how does this affect the VAT treatment of our sales to EU and UK customers, particularly in terms of applying the correct VAT rates and potential implications for customs duties? Intra-EU Supply Chain: For products manufactured and shipped within the EU to EU customers, what are the specific VAT obligations for our UK-based company, and how do we handle VAT registration and reporting in the relevant EU member states? Sales to UK Customers: How does the origin of goods within the EU impact VAT and customs duties for products sold and shipped to customers in the UK, considering our business's UK domicile? Reclaiming VAT on B2B Purchases: Given that Printify charges us VAT on our purchases, what is the process for reclaiming this VAT, and how does the EU origin of the products affect this process? Compliance and Documentation: What specific documentation and compliance measures are necessary to ensure we meet all VAT and customs obligations, given the EU origin of the products and our cross-border sales model? Thanks!

Hi Matt Boer,
If you are dropshipping goods in to the UK over a value of £135 then the VAT liability in the UK will be determined by who the importer of record is in the UK.
If the UK customer is the importer of record then they will be responsible for paying the import VAT and your supply of goods to them will be Outside The Scope of VAT as otherwise they would be paying the VAT twice.
If you are dropshipping goods under a value of £135 then please see the guidance below:
Changes to VAT treatment of overseas goods sold to customers from 1 January 2021
If you are dropshipping goods in to the EU then there may be a requirement to register for VAT in the relevant member states.
The supplier of the goods to you will be making a supply of goods to you in the EU and so you will be making an EU supply to your customer.
The member state(s) where this happens will determine where you will need to register for VAT in the EU.
Please also see the guidance on the Europa website regarding the rules and procedures for the supply of distance sales:
VAT e-Commerce - One Stop Shop
The origin of the goods doesn't affect VAT as the VAT is determined by where the Place of Supply of the goods is deemed to be.
Please contact our International Trade Team to discuss the Rules of Origin and how this may affect the duties payable.
Imports and exports: general enquiries
Thank you.