As a hobbyist interested in creating beautiful candles for you and your friends or as a new business owner in search of a reliable supplier for your scented creations you will need to have some basic knowledge of VAT regulations within the EU. This knowledge will simplify the process of acquiring the raw materials you need and clear out a few misconceptions you may have when it comes to purchasing from a B2B supplier.
The retail mindset
As consumers we are used to treat every pricetag we see on an item as “final”, whether we purchase something from the grocery store across our street or from a large online retailer based in another country. But this is not the case. Everything we buy has Value Added Tax embeded in order to simplify the process of checkout and unburden us from complex calculations.
But what exactly is VAT?
You know the term, but you cannot seem to grasp its purpose. In simple terms VAT is an indirect tax imposed by the EU on all trading goods and services. It is not something the business owner has control of and certainly not a special “bonus” for them. It is an amount of money that is supposed to be handed over to the tax office of the country the business owner is situated.
My country’s tax rate is X% why am I charged 24%?
Simply because you are buying goods from another country (in our case is Greece) in which the tax rate is different than yours. And unless the business you are purchasing stuff has registered OOS in every possible country within the EU (only mega billion euro corporations do that) then the VAT rate would correspond to the country of origin of the goods.
Welcome to the business world
And now you, a purchasing individual, physical person or upstart business owner lands on our website in search for fragrances and candle making supplies. You see the term “Exc. VAT” in every product price and you also read the statement “VAT-free for valid VAT-Id EU businesses”. And the retail mindset kicks in making you think that you will get “discounted” goods, ridden of that nasty “bonus” money.
And by never having purchased from a B2B supplier before or by never having been in contact with a B2B trader in the past, you immediately search for the “Contact Us” page to send us a flaming complaint.
Read again. Slowly.
“VAT-free for valid VAT-Id EU businesses”
Now, ask yourself these questions
Question 1: Am I a business owner?
No? Then you ARE going to be charged of tax ➕ (24%)
Yes? Proceed to the next question. 👇
Question 2: Is my business situated in the EU*?
No? Sorry but we do not ship outside of the EU**. ❌
Yes? Good, MAYBE you are not going to be charged of tax. Proceed to the next question. 👇
Question 3: Does my business have a valid VAT-Id for intra-EU transactions?
No or Unsure? Please refer to your local tax office and make the necessary adjustments. 🏦
Yes? Congratulations, you are eligible for tax exemption! 👍
What do you mean by the term B2B?
Perfumedom is operating on a Business to Business model. We are not a retailer. We do not sell end-products. Our products are not made for direct consumption, they are materials used by other companies to make finished goods. This does not mean that we do not accept orders from individuals though. It just means that if the system recognizes you as a non legal entity, your order will be regarded as “retail” with the afforementioned charges.
How do you know my business is eligible for tax exemption?
We have direct link to the VIES platform which cross references your VAT nr with your physical address at checkout. If you are eligible for tax exemption then the system will return with a 0% tax. If not, and you are sure you have made VAT exempt intra-EU transactions in the past, then please check that the billing address you are entering is correct. And double-check your VAT-Id! It must begin with the first 2 letters of your country followed immediately by your VAT nr. For more information please visit: https://ec.europa.eu/taxation_customs/vies/
We hope that by now all your VAT related questions regarding purchasing from a B2B supplier have been answered! For basic queries such as prices, invoicing, shipping etc please visit our Frequently Asked Questions.
* Excluding Greece
** Excluding the UK, Northen Ireland, Switzerland and Norway