I use Xero. My understanding is that in the accounting software that each European sale would be posted to a VAT free account - eg Sale to Germany. At the end of the month you would have to manually export all EU sales, account for the different VAT rates, and somehow submit a report into the EU IOSS portal. Then account for the VAT to be paid... Messy at the very least and I am still pondering whether to register or not. I will read up on the documentation over the weekend that Shopify has just released to better understand how Shopify is going to handle all of this eg at the moment my pricing in Euro on my website is VAT free, and I am not sure how that will change with IOSS - will product prices stay tax free and VAT be applied (or not) at checkout dependent upon the 150 Euro threshold....
Unfortunately you will need an EU Intermediary. This is because since Brexit the UK now has no fiscal agreements with the EU and unlike Switzerland and Norway are not part of the EEA either.
We can help and are giving free IOSS guidance. We can refer you to EU Intermediaries that can get you set up and ready click here for more information.
There's lots of confusing and incorrect information out there so I hope this helps everyone
Our accountant has advised us to wait before registering. This is because it may be possible to register for IOSS through the HMRC portal and submit through there. But it does state that the system might not be ready by 1 July.
Shopify seems to have set up the taxes/shipping solution with the £135 threshold for EU countries. It requires the EU VAT IOSS registration number so we ourselves will not implement it as yet until things are clearer.
Yesterday we received an email from Shopify notifying us about these new tax settings update. Here it is:
As of July 1st, 2021, the European Union (EU) is making changes to tax regulations for eCommerce purchases made within the EU. These changes include the elimination of minimum sales thresholds, updated value-added tax (VAT) rates, and a choice of how to remit taxes. We’ve added options to the tax settings in Shopify to help you comply with these changes. It’s important that you take the time to understand how these changes impact your business and update your tax settings in Shopify before July 1st. You can find more information on the EU’s One Stop Shop VAT site and in our recent blog article on the topic, but we recommend consulting a tax professional to learn what is right for your business.
Tip: Based on our records, you currently ship products to the EU from countries outside of that region. When buyers in the EU purchase from your store, they will be required to pay VAT and/or duties upon delivery. You can choose to charge VAT on orders up to €150 to simplify the buying and shipping experience on those orders. To do this, you'll need to provide us with your Import One Stop Shop VAT number which will enable you to submit a single VAT remittance for all of the EU.
Update your tax settings in Shopify based on the choice that makes the most sense for your business.
Update tax settings
To learn more about the tax setting options available, visit our help centre.
Hmmm...well that facility doesn't appear in my store. I wonder if you need to be on the Advanced plan for this or whether all EU countries need to be in one shipping zone. Lumping all EU countries into one EU shipping zone wouldn't work for my store as courier shipping prices vary so much across the EU.
On the Royal Mail website there is an integraton called taxamo which looks like it will take the place of an EU intermediary and handle all the ioss for you.
I have asked shopify to see if they will develop an integration/app for taxamo.
It seems like a good low cost alternative to soe of the companies like Alvara who are charging alot of money for this service.
I agree, if not I believe simplyvat can do everything for £175 per month. Alot of our eu sales went through marketplaces so not sure if simplyvat is worth it for us.
I am sure more services will be rolled out shortly.