VAT | 1. November 2021

Lea’s VAT rules Update for November

Different VAT rates for supposedly identical products sometimes do not make it easy for cross-border merchants. This is shown by the following examples. by

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Always finding the correct VAT rate for different products is sometimes not easy for e-commerce merchants who deliver across borders. All EU-27 countries use different tax rates and calculation bases, and in addition there are many special rules, some of which are incomprehensible. In my update for the month of October, I have summarised three of the most curious cases that I have encountered during my work as a VAT consultant in recent weeks.

Honey in Bulgaria and Estonia

Autumn has arrived in Berlin. With wet and cold weather, the number of sore throats also increases. What to do? A fresh ginger tea with a spoonful of honey can work wonders here. Natural honey is taxed at a reduced VAT rate in most EU countries. However, caution is advised in Bulgaria or Estonia – these countries will apply the full standard VAT rate!

DVDs in several EU States

DVDs can be used in a wide variety of ways. The VAT rates applied to a DVD by each individual EU country is just as wide-ranging. The Czech Republic, Estonia, Greece and Portugal reduce DVDs if they provide a computer software for the deaf, blind and visually impaired. Germany, on the other hand, reduces DVDs if they are audio books safe for minors. Slovenia focuses on the aspect of advertising: If the DVD contains less than 50% advertising, the reduced VAT rate applies. However it may not include music, movies, games (including gambling/lottery), interactive learning, programs/events in the fields of politics, culture, art, sports, science and entertainment.

Batteries in Belgium and Netherlands

Belgium and the Netherlands not only share a border, they also pull together on the taxation of batteries: batteries are normally taxed in Belgium at the regular VAT rate. However, if the batteries are sold explicitly for use in hearing aids, the VAT rate is reduced from 21% to 6%. The Netherlands also reduces the VAT levied on batteries sold for aids for the deaf and hard of hearing from. These are taxed at a VAT rate of 9% instead of 21%.

VATRules takes into account all special cases and exceptions

VATRules always knows the correct tax rate and applies it directly in the merchant’s shop system. The database has over 1.2 million tax codes and contains over 300,000 exceptions. Item-specific, always up-to-date and for all EU-27 plus UK.

Author

Lea-Luisa Blase
Lea-Luisa Blase successfully completed her master's degree in business and tax law at the University of Potsdam. She then worked as a tax assistant at BDO AG Wirtschaftsprüfungsgesellschaft. As an editorial project manager, she then expanded her profession at an online seminar provider specifically for the tax sector and is currently employed at eClear as a VAT consultant in the internal tax department. She also prepares the content for the eClear VATRules, which contain more than 1.2 million tax codes including all exceptions, reductions and exemptions.
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