How did the 2021 EU VAT Directive changes affect Zalando sellers?

The 2021 EU VAT Directive amendments mandate that VAT on online purchases is charged in the customer's country. Consequently, platforms like Zalando are deemed suppliers, making them responsible for collecting and remitting VAT on behalf of sellers.

What are the VAT obligations for sellers using Zalando's Partner Program?

Sellers storing inventory in Zalando's EU warehouses must register for VAT in each country where their goods are held. This requirement ensures compliance with local tax laws across different EU member states.

How does the One-Stop-Shop (OSS) scheme benefit Zalando sellers?

The OSS scheme simplifies VAT compliance by allowing sellers to register in a single EU country and report VAT for sales across all member states. This approach reduces the need for multiple VAT registrations, streamlining the tax reporting process.

Are there specific VAT considerations for non-EU established partners selling on Zalando?

Non-EU partners shipping from EU warehouses to EU customers may have Zalando act as the deemed supplier, handling VAT collection and remittance. However, this depends on specific conditions, and sellers should consult with tax advisors to understand their obligations.

What are the invoicing requirements for Zalando sellers concerning VAT?

Sellers must provide valid VAT IDs and corresponding certificates for each market they operate in. Invoices should include necessary details such as the legal entity's name, address, and VAT ID to ensure compliance with tax regulations.

How does the DAC7 regulation impact Zalando sellers?

Effective from 2023, DAC7 requires digital platforms like Zalando to report specific information about their partners to tax authorities. This includes details such as the seller's name, address, tax identification numbers, and bank account information, enhancing tax transparency within the EU.

What should Zalando sellers know about VAT?

Currently, Zalando is among the largest online fashion marketplaces in Europe, covering as many as 23 countries. For fashion manufacturers, selling on Zalando gives a unique opportunity to use a broad consumer base of over 45 M customers and promote their goods via many different channels.

Beginning to sell on Zalando

If you are planning to begin selling your goods on Zalando using the platform’s partner program and are wondering where to start, here is a short summary of a typical enrolment pipeline:

- Submit your application online via the Partner Portal on Zalando

- Wait until your application is reviewed

- Discuss further requirements and the geography of your sales with a Zalando representative

- Sign the contract

- Integrate your items

- Complete the onboarding

Such partnership allows you to plug in your items and use Zalando’s fulfillment scheme. Other possible partnerships are selling wholesale to Zalando or using the Connected Retail model for selling without using Zalando’s fulfillment.

Taxation of Zalando’s sales

The VAT administration for Zalando sellers was impacted by the changes of the EU VAT Directive in 2021. Since then, the VAT for online purchases has been charged in the country where the customer is located.

Based on the adjusted regulations, Zalando is considered the deemed supplier and is responsible for charging and collecting VAT on behalf of the seller.

Zalando acts as a logistics partner and allows for more efficient transportation of items by storing stock of the partner’s goods. The platform does not allow sales of items stored outside the EU. Sellers of the Zalando’s Partner Program that hold inventory in Zalando’s warehouses will have to register for VAT in the countries where the items are kept. A similar process is applied to other partner programs, such as the Fulfilment By Amazon (FBA). Such registrations can be done via the One-Stop-Shop (OSS) scheme.

The OSS scheme simplifies VAT registrations, as the company can register in a single country but quickly provide VAT returns for as many European member states as needed. Therefore, Zalando sellers can use OSS to submit VAT in the countries where their items are stored or customers are located.

Share your Zalando selling experience

We'd love to hear about your experiences selling on Zalando. Have you faced any challenges with VAT? Share your stories and any issues you have encountered in the comment section below. Your insights could help others navigate the complexities of VAT compliance.