Including dropshipping in your accounts

It sounds appealing: you sell products and your supplier delivers them directly to your customer, without you having to physically handle the goods. Handy, isn’t it? But how do you register dropshipping correctly in your accounts? And from when do you need to take (I)OSS into account? We explain how you can register your income, costs and VAT simply and clearly.

What exactly is dropshipping? 🚢

With dropshipping, you sell the product, but the supplier ensures it goes directly to your customer. You handle the sale, the invoice and contact with the buyer, but the product never comes into your possession.

Here’s how it works:

Suppose you sell a designer lamp for €100. The supplier charges €60 and sends the lamp directly to the buyer. This way, you receive €40 and have time left over for marketing and customer service, without the hassle of managing a warehouse.

Which documents do you need to keep? 📑

Accurate bookkeeping starts with good documentation. You need three types:

➡️ Invoices from your suppliers: proof of your costs.

➡️ Sales invoices to your customers: you must invoice every sale correctly, including VAT where applicable.

➡️ Keep delivery notes or proof of dispatch, so you can easily demonstrate any additional costs.

Tip: keep everything digitally or on paper. That way, everything is ready should the tax authorities come to check.

How do you register your income? 💶

It is important that you include your full turnover in your income. So not just the profit you are left with, but the full amount the end customer paid for the product.

The price charged by the supplier, plus any delivery costs, should be recorded as a business expense. This reduces your taxable profit.

What about VAT? 🧾

Depending on your VAT rate, you charge VAT as you would if these products were coming directly from your own warehouse:

➡️ Sales within Belgium: 21% VAT (or an exceptional VAT rate where applicable to your products).

➡️ Sales to other EU countries: check the distance selling threshold. If you remain below it, simply apply the Belgian VAT rules and charge Belgian VAT to your private customers.

➡️ Sales outside the EU: usually VAT-free.

Threshold for distance sales and the OSS return 🚨

As long as you have less than €10,000 in income from dropshipping to foreign private persons, you apply the standard VAT rules in Belgium.

➡️ Exempted from VAT: you do not charge VAT on your sales and this income simply counts towards your turnover threshold for the exemption rule.

➡️ Subject to VAT: you charge Belgian VAT to your customers.

Once you exceed the €10,000 threshold, things do change. VAT is no longer levied in Belgium, but in the country where the customer resides. As a result, you must use the EU ‘One Stop Shop’ (OSS) system or register directly in the country where your customers reside.

This turnover also no longer counts towards the exemption scheme for small businesses in Belgium, which means that from that point onwards, you must charge VAT on these sales and have administrative obligations.

Useful links 🔗

How to choose the correct VAT rate: 6%, 12% or 21%?

How does reverse charge work?

Accounting for e-commerce: How to record costs and income via online marketplaces