Printful charges me tax for shipping to the UK, but my business pays tax in The Netherlands. HELP!

Tourist
6 0 5

I'm using Printful to dropship a few of my online products. Printful correctly exempts my orders from tax, as a business, while I collect and pay tax from EU customers in accordance with the regulations. I've run into a major problem in that, when an order is placed via my store (based in The Netherlands) by a UK customer, Printful charges UK VAT, which I can't recover. In other words, the UK VAT simply comes out of my profit, which basically leaves none. This can't be right. Can anyone help?

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Community Manager
Community Manager
2395 163 350

Hi @Debbie_Stokes,

 

Nick here from Shopify. Good question!

 

Taxes can be difficult to figure out even at the best of times. I looked into this for you and found that Printful has a help document based around why are you being charged tax where it states that VAT is added on some orders going to the EU, which you can see from the image below:

 

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Without taking a closer look behind the scenes at the order it's hard to troubleshoot your specific case further. It could also be worth reaching out to Printful about his directly which you can do from their live chat function on the Printful website highlighted below:

 

19-22-1xhxp-5cc3y

 

I would say to reach out to Printful as the best next step to understand why they might have charged a tax on this particular order. 

 

Hope this helps!

 

All the best, Nick

 

 

Nick | Social Care @ Shopify
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Tourist
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Thanks, Nick. I appreciate your reply. However, I contacted Printful in the first instance, and they simply quoted what they say on their site. I've spoken to my tax advisor in The Netherlands, and he agrees that they have this wrong, so I feel a bit helpless...

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Community Manager
Community Manager
2395 163 350

Hi @Debbie_Stokes,

 

Apologies for the delay on getting back to you about this. 

 

Would you be able to explain this a little further for me, please? Is it charging a VAT when it shouldn't or is it just charging a different price of VAT for UK customers only? 

 

Could you also let me know how you have your tax settings set up in your Shopify admin too? For example, have you ticked the box to have all tax included in your prices as shown below?

 

01-25-s0vwd-iwhhe

 

I'm just trying to understand exactly what your situation is to see if there is a workaround we can look into for you. I'm also wondering if the Tax overrides and exemptions could be worthwhile looking into for you. One of the most common tax exemptions is VAT exemptions in the UK. You can find the Shopify help guide for Tax overrides and exemptions here

Nick | Social Care @ Shopify
 - Was my reply helpful? Click Like to let me know! 
 - Was your question answered? Mark it as an Accepted Solution
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Tourist
6 0 5

Hi Nick,

Thanks for sticking with this. The issue is not connected to my Shopify settings at all. To clarify:

1. My store is set up to include taxes in my prices, and all EU consumers (non-business) are charged Dutch VAT, 21%, when they place an order in my store. This is all working exactly as it should be. Meanwhile, EU business customers are exempt from VAT, except in The Netherlands, where Dutch VAT is charged by me and then recovered by the business customer via the Dutch tax authorities.

2. Similarly, Printful has my Dutch VAT number, and uses it to zero-rate VAT on my Printful invoices, as an EU business customer that is not based in a country where Printful has tax obligations. This is correct.
3. Now, if I were a UK business, where Printful apparently has tax obligations, they would charge me VAT even as a business customer (the same as I would charge a Dutch business customer, see point 2), and that would be correct. UK businesses can then recover that VAT from the UK authorities, and that's all fine.

4. So here's the problem: Printful is adding UK VAT to invoices billed to my Dutch company, in the event that I request them to fulfill an order to a UK customer. My Shopify customer invoices show Dutch tax on the original order, which I declare and pay. My Printful business invoices show UK tax, billed to me, which I cannot recover, as I am not a UK company. Hence there is something wrong with the way tax is handled by Printful.

 

To be honest, I don't expect you be able to solve this. But there must be other EU (non-UK) Shopify store owners, using Printful, in exactly the same predicament. How do they manage it??!

 

Best Wishes,

 

Debbie

 

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New Member
2 0 2

Hi Debbie

 

Did you get this sorted out as I have the same problem and can't seem to get an answer

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Tourist
3 0 1

@Debbie_Stokes , 

I have exactly the same problem with Printful. And from what I know they get it completely wrong. And also with other Tax calculations. They charge VAT depending on the location of the end-customer and not YOUR business location.

 

According to the EU VAT Directives for Triangular Transactions, Business A (Printful) charges Business B (Your Business) without VAT while you charge your Customer (C) the according VAT rate of your Business location (Netherlands). 

 

Printful thinks that if they are registered in the UK they need to charge you, but that is nonsense because you are not a registered business in the UK. Therefore it is an Intra-EU business transaction, which requires "Reverse Charge VAT" which means they charge 0% VAT and you will report it to your tax authorities with Reverse Charge. They can not charge you a different countries VAT... if you are a registered VAT ID holder (a legit business).

 

Printful takes the actual end-customer's (your customer's) location and handles it as if it was their customer. Which is completely wrong.

 

I sent in numerous complaints about this and other incorrect practices by now. When it comes to accounting and bookkeeping, Printful is a nightmare. They are only very slowly and resistantly adapting to the European system.

 

Cheers

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Tourist
6 0 5

Hi there! Thanks so much for the reply, and for reinforcing the viewpoint. This situation has been driving me crazy!

 

There must be something we can do, right? I just don't know what, as I'm relatively new to this kind of business. Maybe there's some kind of EU arbitration service or something like that. I had hoped that the experts at Shopify would step in and help, but seems they don't understand the problem.

 

I had given up fighting, but your note has re-ignited my will to get this sorted out. Let's stay in touch!

 

Thanks,

 

Debbie

 


@DesignDrudge wrote:

@Debbie_Stokes , 

I have exactly the same problem with Printful. And from what I know they get it completely wrong. And also with other Tax calculations. They charge VAT depending on the location of the end-customer and not YOUR business location.

 

According to the EU VAT Directives for Triangular Transactions, Business A (Printful) charges Business B (Your Business) without VAT while you charge your Customer (C) the according VAT rate of your Business location (Netherlands). 

 

Printful thinks that if they are registered in the UK they need to charge you, but that is nonsense because you are not a registered business in the UK. Therefore it is an Intra-EU business transaction, which requires "Reverse Charge VAT" which means they charge 0% VAT and you will report it to your tax authorities with Reverse Charge. They can not charge you a different countries VAT... if you are a registered VAT ID holder (a legit business).

 

Printful takes the actual end-customer's (your customer's) location and handles it as if it was their customer. Which is completely wrong.

 

I sent in numerous complaints about this and other incorrect practices by now. When it comes to accounting and bookkeeping, Printful is a nightmare. They are only very slowly and resistantly adapting to the European system.


 

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Tourist
6 0 5

@TheGecko 

Hi - apologies, I didn't see your note until another reply came in recently. If you haven't seen the latest posts, please take a look. The more of us that come forward with this problem, the better the chance to resolve it, I hope!

 

Please can you let me know where your business is based?

 

Thanks,

 

Debbie

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New Member
2 0 2
Hi Debbie

I am originally from the UK but I am living in Spain, over here you have to have a great deal of paperwork just to set up a business and we have to submit invoices every month to a Gestor / accountant they have looked into this as from day one we have to register for VAT (IVA in Spain) as there are no lower limits for sales before paying (crap) I am on the European VAT register and the Gestor has looked into this problem as there should no be double VAT rate and he assures me that Printful are in the wrong on this and they should not be charging VAT on purchases to the UK as I have to pay the VAT. with Printful I can't get past the customer help as they no doubt have a list of Q&A's for problems so the reply is the same. 

I am having a real problem as my market was the UK but I can't sell there because of this problem the prices are just too high, to be honest I am getting to the point with POD of finishing my store etc as we have such high outgoings here in Spain and it is just not making sales I can't seem to compete, I know it takes time to get things running but ads and the cost of the items are just not adding up.



Thank you for the reply I am interested in what happens with this as I know Printful are in the wrong on this.



Kind Regards Les
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