Winkel Factuur Insights
Dropshipping is a popular business model: you sell products via your webshop (e.g., Shopify), but the supplier (often in China via AliExpress or Oberlo) ships the package directly to the customer. You don't need inventory and run little risk. But fiscally, dropshipping is complex. What about VAT? Who pays import duties? And how do you create a correct invoice? In this article, we explain it in detail.
In dropshipping, you are the seller of record and must charge VAT to your customers, even though the supplier ships directly. Import VAT applies on goods from outside the EU.
Dropshippers face unique VAT challenges because goods ship directly from suppliers in different countries to end customers. This guide clarifies dropshipping VAT rules for imports, EU sales, and OSS, and shows how to automate compliant invoicing.
With dropshipping, three parties are involved: you (the seller), your supplier (e.g., in China), and your customer (the consumer). Because goods often come from outside the EU, specific rules apply.
Since July 1, 2021, e-commerce rules have changed significantly. The exemption for imports of small consignments (under €22) has expired. This means that VAT must be paid on **every** shipment from outside the EU.
There are two scenarios:
1. You import the goods (You are the importer)
You pay the import VAT to customs (or via your carrier). Then you sell the product to your customer with domestic VAT (or the VAT of the customer's country).
2. The customer imports the goods (Customer is the importer)
This is often the case with AliExpress dropshipping. The supplier ships directly to the customer. The customer runs the risk of having to pay import costs and VAT at the door. This is disastrous for your customer satisfaction!
To prevent your customer from having to pay at the door, you can use the IOSS scheme. This applies to shipments with a value up to €150.
With IOSS, you settle the VAT at the sale in your webshop (e.g., 21% for a Dutch customer). You pay this VAT monthly via the IOSS return. The package gets a digital IOSS label, allowing it to pass through customs smoothly without extra costs for the customer.
Many platforms like Shopify have integrations to make this easier. But beware: your invoice must be correct!
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Start free trial →As a dropshipper, you are obliged to keep correct administration. Although you don't always have to send an invoice to consumers, it is essential for your own records and for business customers.
What must be on the invoice?
• If you use IOSS: Clearly state the VAT amount you charged.
• If you deliver to entrepreneurs (B2B): Beware, IOSS is only for consumers. Other rules apply for B2B (often reverse charge).
• Supplier outside the EU: Your purchase invoice from AliExpress is often not a valid VAT invoice. Keep it as proof of costs.
Most dropshippers use Shopify in combination with tools like DSers (the successor to Oberlo). These tools automate the ordering process at AliExpress.
However, these tools do **not** create invoices for your customers. They only forward the order to the supplier. This is where **Winkel Factuur** comes in.
Winkel Factuur connects to your Shopify store and automatically creates a professional invoice for every order. Our software takes IOSS rules into account and calculates the correct VAT per country. This way you comply with the law and your customers receive a neat invoice in their own language.
1. Not accounting for returns:
As a dropshipper, you are responsible for returns, not your supplier in China. Ensure a return address in your country.
2. Underestimating profit margins:
Don't forget to include VAT, import duties (above €150), shipping costs, and transaction fees.
3. Unclear delivery times:
Be honest about delivery time. 'Ordered today, delivered tomorrow' is often impossible.
4. Ignoring tax rules:
Tax authorities strictly check dropshippers. Ensure your VAT returns are correct.
Since July 2021, VAT must be paid on every shipment from outside the EU, regardless of value. You can either import the goods yourself and charge domestic VAT to customers, or use the IOSS scheme for shipments under EUR 150 to collect VAT at the point of sale.
IOSS (Import One-Stop Shop) lets you collect VAT at checkout for goods shipped from outside the EU worth up to EUR 150. The customer pays the full price upfront and the package clears customs without extra charges. This greatly improves customer experience compared to surprise charges at delivery.
Yes. You are obliged to keep correct administration. For business customers, invoices are mandatory. For consumers, they are strongly recommended. If you use IOSS, you must clearly state the VAT amount charged on the invoice.
No. Your purchase invoice from AliExpress is often not a valid VAT invoice. Keep it as proof of costs for your records, but you cannot use it to reclaim VAT. You need proper invoices from VAT-registered suppliers for input VAT deduction.
Yes. Winkel Factuur connects to your Shopify store and automatically creates a professional invoice for every order, taking IOSS rules into account and calculating the correct VAT per country. Invoices are generated in the customer's language.
Avoid hassle with tax authorities. Winkel Factuur ensures correct VAT invoices for all your dropshipping orders, including IOSS support. Try 14 days for free.
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