VAT (Value Added Tax) is one of the most common concerns for salon owners and stylists when ordering professional beauty products from distributors.
Understanding, if a wholesaler like Salon Centric applies VAT, can make a big difference in your product costs. So is Salon Centric VAT exempt or not? Let’s discuss.
VAT is charged at the point of sale. For a wholesaler like Salon Centric, this means charging VAT at checkout on the final invoice total.
Is Salon Centric Required to Charge VAT?
Whether Salon Centric must charge VAT depends on your business location.
Salon Centric has a presence in over 25 countries globally. However VAT policies differ in each region based on local legislation.
For example, if your salon is located in the UK or the EU, Salon Centric is required to charge VAT at the current rate of 20% for your area.
This applies to all purchases made by phone, online, or in local stores.
However, if your salon is located in the United States, Salon Centric is not required to charge VAT.
This is because the US does not have a national VAT system. Sales tax varies by state and local jurisdiction instead.
Some key factors impacting VAT collection:
- Your salon’s shipping address – VAT rate is based on where products are shipped, not where the buyer is located.
- Business or personal purchase – VAT may not apply to personal purchases under a threshold.
- Product type – Some products like ebooks/software may have different VAT rules.
Always provide your complete business address at checkout for accurate VAT calculation by Salon Centric.
Registering for VAT Exemption
If your salon is VAT registered within the UK/EU, you can provide your VAT number to be exempt from paying the VAT charge.
How to Register for VAT Exemption:
- Sign up for a Salon Centric Credit Card. This provides access to VAT exemption and other perks.
- Fill out the VAT exemption form fully including VAT ID number.
- Send the completed form to Salon Centric by email or in store.
- Allow 1 week for processing then orders will no longer be charged VAT.
You’ll need to register your business for a VAT number in your country to be eligible for exemption. Make sure registration is complete before claiming VAT exemption.
Also, keep in mind VAT exemption has annual renewal requirements. So you’ll need to update your VAT certificate with Salon Centric regularly to maintain zero VAT status.
Does Salon Centric Charge VAT on Shipping?
VAT rules also apply to shipping costs depending on where you are:
- Within the EU – Shipping is considered a service so VAT applies at the standard rate.
- To the EU from outside – No VAT on shipping from non-EU origins.
- Within the US – No VAT charged on shipping or products.
Always check the final invoice to see taxes and confirm shipping VAT accuracy. Contact Salon Centric customer service with any questions on charges.
Is Salon-Centric VAT Exempt in Other Situations?
Some other cases where Salon Centric may not be required to collect VAT from salon customers:
- Purchases under the VAT registration threshold – In the UK this is currently £85,000 in sales.
- Shipping orders to VAT exempt geographic areas – Such as the Canary Islands.
- Small Business VAT Schemes – Such as the Flat Rate Scheme in the UK.
There are also scenarios where you could be partially exempt from VAT when ordering from Salon Centric:
- Product exemptions – Certain essential goods like food, books, or children’s clothing may not be subject to VAT.
- Customer exemptions – Such as charities, public sector bodies, some schools/universities.
Check with your local taxation authority to confirm if any VAT exceptions apply to your particular salon’s situation.
Can You Get Salon Centric Products VAT Free?
Aside from having a valid VAT registration number, there aren’t many options to receive Salon Centric products entirely VAT free:
- Order as a personal shopper instead of business – But there are low annual limits like £15,000 in the UK before VAT applies. Also excludes ability to deduct VAT on expenses when filing taxes.
- Get product samples – Salon Centric provides some free samples that don’t have VAT added. Limited to trial sizes.
- Ship order outside the EU – No VAT for orders shipped to non-EU destinations like the US or Canada.
Purchasing through another distributor like Amazon might have lower or no VAT but has other tradeoffs for businesses.
Ultimately VAT at the standard rate will apply on most salon-centric orders from the UK/EU whether ordering online, in stores, or over the phone.
So make sure to factor it into your product costs.
Tips to Reduce VAT Impacts
Here are some tips salon owners can follow to reduce the impact of VAT charges when ordering essential supplies:
- Get VAT registered – Have your VAT ID number on file at Salon Centric to legally skip VAT at checkout. Just don’t forget yearly renewal.
- Order larger quantities – Take advantage of bulk pricing to lower costs including VAT. Can also save on shipping.
- Order less frequently – Place larger orders but less often to cut down on total VAT paid per year.
- Use VAT inclusive pricing – Factor VAT into all pricing to avoid hidden costs. Makes it easier to calculate margins accurately.
- Adjust pricing – Raise service prices to maintain profit margins after materials become more expensive with VAT.
- Offer VAT refunds – Provide VAT refunds to salon tourists from outside the EU with receipt documentation.
The Bottom Line on Salon-Centric and VAT
VAT treatment when buying from Salon Centric ultimately depends on where your salon is located globally.
Within the EU, a standard 20% VAT will apply to all purchases. However salons can provide a VAT ID to qualify for exemption upon approval.
For salons outside the EU, no VAT charges apply. Just local sales tax depending on your jurisdiction.
Understanding the VAT rules is an important part of managing operating costs as a beauty business.
With the right preparation, salon owners can ensure VAT doesn’t cut too deeply into margins on professional products.
Reach out to the Salon Centric support team for any other questions related to VAT collection policies or rates.
Frequently Asked Questions
Does VAT apply when I purchase products over the phone from Salon Centric?
Yes, VAT at the standard rate will be added to phone orders placed by salons located in VAT applicable regions like the UK or EU.
Providing a valid VAT ID can remove VAT charges.
I’m VAT registered but Salon Centric charged me VAT, what should I do?
First double check your VAT exemption status is active in your Salon Centric PRO account. If it shows active but you were still charged, contact support to have the VAT amount refunded.
Is VAT charged on sample products ordered from Salon Centric?
No, the free samples program from Salon Centric does not currently charge VAT. But regular-priced full-size products do have applicable VAT added.
I’m based in Germany, what VAT rate does Salon Centric charge?
The standard VAT rate in Germany is currently 19%. So Salon Centric will add 19% VAT to orders shipped to Germany unless you provide a valid German VAT ID.
Can I get Salon Centric products imported from the US VAT-free?
Unfortunately no, any Salon Centric orders shipped from outside the EU into an EU country will still be subject to local VAT at delivery.
Your geographic business address determines VAT applicability.
Do I need to collect and remit VAT when reselling salon-centric products?
If your salon is VAT registered, you must collect VAT from your customers and remit it on your VAT return. Ensure your pricing builds in VAT to cover the amount paid to Salon Centric.
I’m opening a new salon – should I register for VAT right away?
It’s recommended that VAT register your new salon immediately. This allows you to reclaim VAT paid on expenses like Salon Centric purchases.
Even if below the VAT threshold, it gives you an ID to use for future exemption.
Does Salon Centric charge VAT in Canada or Australia?
No, neither Canada nor Australia have a VAT system. Some Canadian provinces charge provincial sales tax instead.
Australia has a Goods and Services Tax (GST) that may apply.
Can I deduct the VAT paid to Salon Centric from my business taxes?
If your salon is VAT registered, you can reclaim the VAT amount paid to Salon Centric by deducting it from your VAT return filing.
This helps offset the input VAT on your expenses.