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Is it mandatory to enter the VAT number on Shopify

Is it mandatory to enter the VAT number on Shopify?

in Blog, Shopify on March 9, 2022

Do you have a business and are you thinking of expanding it online? Then you have to open an e-commerce site. In this article, I give you an answer to all these questions.

First of all, regardless of whether you are familiar with online and websites or not, Shopify can come in handy. Is it mandatory to enter the VAT number on Shopify? I’ll also answer this question in the following paragraphs.

Is it mandatory to enter the VAT number on Shopify?

Shopify: mandatory VAT number?

After these necessary bureaucratic and fiscal clarifications, here we are with the fateful question: Is it mandatory to enter the VAT number on Shopify? In light of what has been said so far, the answer is yes.

The VAT number is a single code of 11 numbers that the Revenue Agency assigns to freelancers, entrepreneurs and self-employed workers who carry out professional, artisan or commercial activities.

For all those companies that carry out a regular and continuous sales activity, therefore stable, it is necessary to have a VAT number. By habitual character and continuity, we mean all those activities that last more than 30 days.

VAT number in Shopify dropshipping: is it necessary?

The answer is Yes! it is.

Lately, there is a particularly popular e-commerce mode: dropshipping. Is the VAT number mandatory in this case too? Before answering this question, first, understand what dropshipping is.

The dropshipping formula is very popular as it reduces costs and effectively eliminates the risk of unsold goods. In practice, it consists in selling a product without actually having it in stock. The seller displays the products in his online showcase, acting as an intermediary between the buyer and the supplier.

When a user orders a product online, the seller requests it from the supplier who personally takes care of the preparation and shipping. An ideal system for those on a limited budget and who want to start low-cost e-commerce.

Do I also need a VAT number for dropshipping? The answer is yes! since it is configured as a continuous activity, therefore stable. Opening the VAT number is one of the tax obligations to be fulfilled if you have an e-commerce site.

What are the costs of a VAT number in Shopify?

To open a VAT number you must first consider the fees to be paid to the Chamber of Commerce and the Municipality, which can range from 53 to 128 euros. Other costs are then linked to the legal form of the company.
The legal form represents the configuration of an activity from a legal point of view and there are 3:

  • Sole proprietorship: the company coincides with the entrepreneur, who is responsible for the debts with all his assets. It represents the most advantageous form from an economic point of view;
  • Partnership: the company is a separate entity from the shareholders who are however responsible for the debts of the company with their assets;
  • Joint-stock company: the company is a subject unto itself with respect to the shareholders. The company’s assets are separated from the shareholders’ assets. Of the three types, it is the most expensive, but also the most flexible.

What is Shopify and why you can’t do without it?

Shopify is an e-commerce platform that allows you to create your own online store and start selling immediately, even if you are not particularly familiar. You can sell both products and services, leveraging the physical and digital channels to increase revenue.

To create your online showcase you can take advantage of a free 14-day trial, so as to better familiarize yourself with the platform. At the end of this trial period you have 3 subscription options available:

  • Basic Shopify: a basic subscription at a cost of 26 euros;
  • Shopify: a subscription of 70 euros with some additional functions;
  • Advanced Shopify: a subscription of 265 euros that offers you all the most advanced activities to give your online business an edge.

What are the mandatory data to sell online in Shopify?

Before starting to sell you must fulfill a series of obligations such as:

Choose the legal form of the company that owns the site;

  • Open a VAT number;
  • Apply for registration at the competent Chamber of Commerce;
  • Present the SCIA to the competent Municipality;
  • Open a certified email address.

You must also enter the following mandatory information on the site:

  • Business name;
  • Registered office;
  • Tax Code of the company and VAT number;
  • Business register office where the company is registered;
  • REA registration number;
  • Share capital and paid-up fee.

Temporary shop without VAT number: how does it work?

Dropshipping without a VAT number is only possible in one case: the temporary shop.
It is to all intents and purposes a commercial activity, without the obligation to register for VAT, as long as it remains active for a maximum period of 30 days out of 365. It can be considered an occasional activity, both online and offline.

When can the temporary shop prove to be a valid alternative? For example, fashion brands can test new products, launch promotions and collections locally or sell surplus goods by exploiting the scarcity effect.

Thanks to this temporary “shop” you can test the validity of your offer, without incurring the costs of the VAT number, and then decide what to do. If you have received positive responses, then it is worthwhile to open an eCommerce site to increase your earnings. If your idea has not achieved the desired success, then you can safely close the temporary shop without additional costs.

In this case, start exploring the market for the best dropshipping suppliers without a VAT number. In fact, if things go the right way and you decide to open a dropshipping, it is certainly useful to move well in advance. One of the first things to do is to find reliable suppliers, which is not an easy operation and which in any case requires a certain period of time.

Conclusions

If you intend to open e-commerce, the VAT number is a mandatory step. The alternative would be the temporary shop which, if it were to go well, would still require the opening of the VAT number.

Whatever your choice, Shopify is a very valid ally, to create a personalized website shaped on the needs of your customers. In addition to cutting costs and time, you have the opportunity to immediately create a beautiful graphically and perfectly usable site, so as to increase sales and therefore earnings.

Now you know “Is it mandatory to enter the VAT number on Shopify?” If you like this post, please leave a comment below. You can also read this: How to choose Shopify theme?

Categories: Blog Shopify