With the scale of the development of online trade, one of the most popular methods is the so-called dropshipping. In short, dropshipping is a type of trade in which the trader agrees in advance with manufacturers to offer their products. This can be done through your own website or any of the world’s leading platforms such as Amazon, Shopify, eBay and others.
Before starting that activity, the trader must have VAT(VATA) registration.
There are two main ways to carry out this process and respectively two completely different ways of posting.
One option is when the person(s) dealing with dropshipping does not buy the product from the manufacturer and then sell it to the customer. In this case, the person(s) shall be the intermediary of the transaction. Here he/she does not carry out purely trading activity, but mediation. In these circumstances, a dropshipping-type trading invoice is issued for a pre-agreed commission. In this billing situation, VAT is not charged.
The second dropshipping option is when the trader buys the product from the manufacturer and sells it to the customer. The transport itself is carried out directly from the manufacturer to the customer without the goods physically entering the country of the trader. It is essential here that sales are recorded and declared in sales journals and monthly VAT declarations.
In the dropshipping field, things are very diverse and specific. Since dropshipping is a type of trade that has entered the NRA’s view, our advice is to know your particular case very well and consult specialists on the matter. Negligent treatment towards your business can lead to serious penalties in subsequent inspections by the competent public authorities.
CONTACT US! We at T&G Consulting can be useful to you throughout the entire accounting process. Your dropshipping business needs professionals familiar with the methodology, legal procedures, intricacies of accounting – in T&G Consulting we offer you exactly this. Take advantage of our services.