Where does Dreamlove operate from?
All purchases made at Dreamlove are subject to current Spanish and EU regulations, as well as any other legal provisions that affect international transactions. The purchasing system is subject to the current legislation in Spain, therefore, sales transactions will be considered as conducted in Spain.
Are taxes included in Dreamlove's prices? No. Dreamlove sells in regions exempt from VAT (Value Added Tax), and therefore all advertised prices do not include it. We understand that our customers are businesses or professionals and can deduct it. VAT will be added to those who are eligible during the final checkout process.
Transactions between European Union countries:
Do companies from European Union countries have to pay VAT on their purchases? Since Dreamlove operates from Spain and the invoicing company is equipped with an Intracommunity VAT ID, all purchases made by companies residing in any EU country with a VAT number will be exempt from paying VAT, provided that our system validates the VAT number on the VIES platform. https://ec.europa.eu/taxation_customs/vies/#/vat-validation
Do companies from European Union countries with a VAT number have to pay VAT if the delivery of the goods is made in Spain? Yes. If the goods do not leave Spanish territory, Spanish law requires us to charge VAT.
Do companies from European Union countries without a VAT number (VIES) have to pay VAT? Yes. For companies, individuals, or legal entities residing in EU countries without a VAT number, they will have to pay VAT. If I make a dropshipping shipment to a customer in the European Union with a VAT number to whom I have not charged VAT, do I have to pay VAT?
Do companies from outside the European Union have to pay VAT? Purchases made by companies, individuals, or legal entities residing in non-EU countries with deliveries outside the European Union will be exempt from paying VAT since they will be considered as exports. However, if the deliveries are made in Spain or the rest of the European Union, VAT will have to be paid. Apart from VAT, are there any other taxes that may have to be paid if the shipment is outside the European Union? For this purchase/shipping system, the customs system may apply the corresponding tax charges for each country. If I make a dropshipping shipment to a customer outside the European Union to whom I have not charged VAT, do I have to pay VAT to Dreamlove? You don't have to pay VAT since it is considered an export. Transactions with the Canary Islands, Ceuta, and Melilla.
Do companies, individuals, or legal entities residing in the Canary Islands, Ceuta, and Melilla have to pay VAT? Due to their fiscal regime, the Canary Islands, Ceuta, and Melilla are considered extracommunity territories. Therefore, purchases with invoices and deliveries made in this geographic area will not have to pay VAT.
Do companies, individuals, or legal entities residing in the Canary Islands, Ceuta, and Melilla have to pay VAT if the delivery of the goods is made in mainland Spain, the Balearic Islands, or another EU country? Yes. If the invoice is issued to the Canary Islands, Ceuta, and Melilla but the goods do not leave the community territory, Spanish law requires us to charge VAT. Recargo de equivalencia (only in Spain):
What is recargo de equivalencia (equivalent surcharge), and who has to apply it? Recargo de equivalencia is a special VAT regime for retail traders who do not carry out any type of transformation on the products they sell, meaning it applies to self-employed retailers selling to end consumers. It applies to both self-employed individuals and communities of property, but not in industrial or wholesale trading or service activities.
What does recargo de equivalencia consist of? For the retail trader, it means paying a slightly higher VAT rate in exchange for not having to submit VAT declarations to the Tax Authority. Thus, VAT is paid directly to the supplier, simplifying VAT management. It only applies to invoices for goods corresponding to merchandise, never to services. The retailer must inform the supplier (Dreamlove) of their fiscal regime so that the equivalent surcharge is included in their invoices.
According to Royal Decree-Law 20/2012 on measures to ensure budgetary stability and promote competitiveness, which includes the increase in VAT, the equivalent surcharge rates applicable from September 1, 2012, are: 5.2% for items subject to the general VAT rate of 21%. 1.4% for items subject to the reduced VAT rate of 10%. 0.5% for items subject to the super-reduced VAT rate of 4%. How to pay the equivalent surcharge at Dreamlove? The advantage for those under this special regime is that Dreamlove's website is adapted to this tax. In the process of creating an account at Dreamlove, you must select the option "Yes, I am subject to R.E. (equivalent surcharge)".
If you already have an account, please contact Dreamlove's Administration Department.