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I am shipping from Latvia and got to the hs codes. Do I understand the taxes and customs right?

ARPRO
Explorer
57 2 8

Hello!

 

So I got to the hs codes of my products in my store making journey and now am learning about the taxes.

 

I am looking to ship from Latvia to these countries: Latvia, Estonia, Lithuania, Poland, Finland, Sweden, Germany, Denmark, Slovakia, Norway, Czech Republic, Hungary, Austria, Belgium, Netherlands, Luxembourg, Switzerland, Bulgaria, Croatia, Slovenia, France, Greece, Italy, Romania, Ireland, United Kingdom, Portugal, Spain.

 

As I understand now then I will have no problem sending my products to other EU countries as no taxes or customs are in the eu-eu shipment.

 

But as I understand Switzerland, Norway, and the United Kingdom will be the only ones of these countries that will have customs and taxes.

 

I am looking for someone to confirm this information as I am a newbie in the whole accounting and taxes....

 

Thanks.

AR PRO Systems
Accepted Solution (1)

Rostislav
Shopify Partner
178 11 26

This is an accepted solution.

HI Arpro,

 

You are wrong about there being no taxes for the cross border sales in the EU. When you deliver B2C  EU to EU you have to pay VAT calculated based  on consumption country (destination country of your B2C client). You can either register for VAT in all the EU countries (do not do that!) or use Union OSS special VAT scheme.  You still would have to handle domestic sales in Latvia via domestic VAT report. 

For UK and Norway you need to register for VAT , they both have simplified schemes  for low value consignments (LVC). Rules are different but manageable 

For Switzerland there is no reliable LVC solution (VAT is not payable for items below 65 CHF though) , so the best way is DDU shipments, postal  delivery is quite reliable there. 

If you register for OSS scheme you will have to collect VAT based on the consumption country and remit it for all the countries in the country of your identification for the special scheme. 

 

We can help you with OSS scheme and UK VAT registration . Visit us at www.easproject.com

 

www.easproject.com - the best EU and UK VAT compliance solution.

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Replies 8 (8)

Rostislav
Shopify Partner
178 11 26

This is an accepted solution.

HI Arpro,

 

You are wrong about there being no taxes for the cross border sales in the EU. When you deliver B2C  EU to EU you have to pay VAT calculated based  on consumption country (destination country of your B2C client). You can either register for VAT in all the EU countries (do not do that!) or use Union OSS special VAT scheme.  You still would have to handle domestic sales in Latvia via domestic VAT report. 

For UK and Norway you need to register for VAT , they both have simplified schemes  for low value consignments (LVC). Rules are different but manageable 

For Switzerland there is no reliable LVC solution (VAT is not payable for items below 65 CHF though) , so the best way is DDU shipments, postal  delivery is quite reliable there. 

If you register for OSS scheme you will have to collect VAT based on the consumption country and remit it for all the countries in the country of your identification for the special scheme. 

 

We can help you with OSS scheme and UK VAT registration . Visit us at www.easproject.com

 

www.easproject.com - the best EU and UK VAT compliance solution.
ARPRO
Explorer
57 2 8

With OSS scheme

EU: So if I am sending - let's say a telescopic pole from Latvia to Estonia.

Then I am going to have to include the 22% Estonia VAT into my price and shipping.

So I pay the 22% of the product and shipping.

And my client pays just the price with the VAT that I included and nothing more when receiving the package.

UK, Norway: I have to register for to VAT for those countries. Customs will be included that could be needed to pay by the buyer.

Switzerland: I have to do DDU shipping to this country. If I don't do DDU shipping the customs will be needed to pay by the customer.

Am I a bit closer to understanding it?

AR PRO Systems
ARPRO
Explorer
57 2 8

And do I need the hs codes for shipping to the eu countries (without UK, Norway and Switzerland)?

AR PRO Systems
Rostislav
Shopify Partner
178 11 26

HS codes (6 characters long) are created by WCO (World customs organisation) and they are required for all sales that cross the international customs borders.  EU is a customs union , so if you import something to EU the same rule applies. For sales within EU you do not need to use HS codes. 

www.easproject.com - the best EU and UK VAT compliance solution.
Rostislav
Shopify Partner
178 11 26

HI , 

Your understanding for sale to Estonia is correct. you sell a pole for 122 EUR (22 EUR VAT included)  For internal  (Latvia )  VAT accounting you 100  post sale with 0 VAT. For OSS scheme you account for 22 EUR due to Estonia. You pay to Latvia one in a quarter all VAT that you collected to EU sales. LAtvian tax authorities deliver these taxes to all other 26 countries in EU. 

 

UK and VAT have their own LVC schemes . 

Parcels to UK below 135 GBP you pay only VAT , over 135 GBP you should not collect VAT in the store, the end customer will pay customs duties and VAT on receipt. 

Norway. LVC scheme for Norway is different it is done on item level. If in your order all items (individually) are below 3000 NOK then only VAT is to be paid, if it is not the case  - customs duties and VAT will be collected on arrival.  

 

DDU actually means , delivered duty unpaid, so all duties  (payable on weight) and VAt will be collected on arrival 

www.easproject.com - the best EU and UK VAT compliance solution.
ARPRO
Explorer
57 2 8

Thanks for the information. Now I just understand that the eu-eu shipping will be easy, because I will just pay the taxes on each country.

But I understand that UK, Norway and Switzerland is more complicated and I should really just remove these countries from my site or have an accountant who will set it all up for these countries.

Thanks again for the information.

AR PRO Systems
Rostislav
Shopify Partner
178 11 26

UK is rather easy and it is a big market so consider registering for UK VAT before removing it. Norway and Switzerland are more complex and much smaller as markets. But it is your business 🙂 

www.easproject.com - the best EU and UK VAT compliance solution.
ARPRO
Explorer
57 2 8

Oh okay, gonna consider uk then.

AR PRO Systems