Financing, tax rates, and accounting
Hello,
I registered myself as auto entreprenuer in France (a sole proprietor business).
The registered business address on Shopify is my address in France.
However, I live and work in S.Korea.
So my products are being sent from non EU country (S.Korea) to EU countries.
I realized that all products being imported into EU countries from outside the EU are subject to 'import VAT'.
My client based in France actually had to pay an import VAT of 20% to receive the product.
I'd like to collect this import VAT in advance and have it included in the product price.
How can I do this?
This is my setting page for taxes and duties for European Union.
Under 'Shipping to the EU from outside the EU', it is mentioned that this is turned off because i'm located or collecting VAT in the EU.
I guess this is happening because my business address is based in France.
To summarize,
I have a business registered in France but I'm sending product from non-EU to EU countries.
How can I collect import VAT in advance?
Many thanks in advance!
I am in the same situation and would like to know how use Shopify to charge local VAT on EU orders under €150. Because my business is registered in the EU, I see the message that this option is turned off, despite a non-EU location being set up and holding all the inventory.
Any ideas?
Thanks..
Hi @Morgan-Firetoys ,
Did you find a solution to your problem?
I applied for an IOSS number so getting it wouldn't be a problem.
However, it still seems like that IOSS option is turned off because I'm located in the EU.
Hi Kport,
I spoke to Shopify support but unfortunately they couldn't offer any help - this was the response:
"If you’re located in the EU or you collect VAT on sales within the EU, then collecting VAT when you ship to customers in the EU from outside of the EU isn’t supported.
You can only choose IOSS if your store’s location is set to outside the EU. I can understand you have a UK location, but only the store's address matters here, which is Ireland."
We could change our Shopify store address to the UK but then we wouldn't be able to use Shopify Payments to receive funds in Euros (without punishing exchange rate fees). Our current workaround is for Shopify to calculate local VAT on all EU orders. We ship <€150 orders IOSS and report only those totals in our monthly IOSS returns, then any orders >€150 are sent DDP and we pay the import VAT via the courier.
It isn't an ideal solution but as far as I can see it is a problem that Shopify need to fix - I can't see any other workarounds..
Hi @Morgan-Firetoys ,
Thanks for your comment and sharing this with me.
I don't see why Shopify wouldn't allow IOSS just because a business is regsitered inside EU.
When you use DDP and pay the import VAT via the courier, what do you have to do exactly?
Do you just proivde the IOSS or intracommunautarie VAT number to the courier company you use?
I contacted one of courier companies in Korea and they asked for IOSS and doesn't accept intracommunautaire VAT number.
I think your solution is by far the most reasonable way to work around this issue.
Hi Kport!
For the better buying experience you are clearly looking for, you have 2 options:
Delivered Duty Paid (DDP): you will need a courier contract, they will pay the taxes and duties to customs on import and invoice you for them instead of the end-customer on delivery.
Positive:
+ shipments with any value
+ little surprises
+ transparent costs
Negative
- expensive (always full customs procedure can be easily 20€ alone)
- can be slower due to above or VERY expensive if really fast
- difficult to get good rates without high volumes
- platform configuration can be a hassle
IOSS: EU wide simplification, believe it or not 🙂 simplified both customs procedure and fiscal compliance. You collect and report and pay at EU country of registration as an EU company.
Positive:
+ EU company needs no Intermediary
+ Cheaper shipping with IOSS number
+ Faster shipping with IOSS number
+ click a box registration for EU company with VAT registration
+ report filing and payment
+ carrier agnostic
Negative:
- only applicable for shipments below 150€ intrinsic value
- configuration
- when both over and under 150€, configuration even more so
- filing in some EU countries (not harmonised naturally)
We are happy to guide you through the process at EAS Project. Our app for the cross-border compliance: https://apps.shopify.com/eas-eu-compliance
Hello @TeemuEAS ,
Thank you for your reply and sorry for the late response.
I tried two of your recommendations and please see below for further questions.
1. DDP
I contacted several international delivery companies and they required IOSS number.
I only have a Intra-Community VAT Number.
They said that they need the IOSS number to use their DDP service.
2. IOSS
Upon doing research, I learned that this is for non-EU companies.
However, my company is registered in France.
Can I still apply for an IOSS number?
Many thanks in advance,
Hi Kport,
Talking to logistics companies is sometimes a painful experience... DDP specifically does NOT require IOSS number, DDP means that the courier will pay taxes and duties at destination country customs and invoice them from you. IOSS allows for simplified customs procedure where they do not have to pay anything to customs as you will remit the VATs using IOSS scheme. I am afraid you have to go through the discussions with them again... I am happy to join, btw, just send a message via our website 🙂
IOSS is for both EU and non-EU companies. It is an abbreviation for Import One Stop Shop, which indicates that the goods are delivered from outside of EU to EU end-customers. For EU companies IOSS is simplified, you do not need to use an IOSS Intermediary and you can simply register yourself via the French tax admin portal. Give them a few weeks.
Due to the reduced role EAS takes with EU companies using IOSS, we have a very different pricing which is not visible on our website. I am happy to share it with you by email.
Hi @TeemuEAS ,
Thanks for your detailed response.
I did apply for an IOSS number and now I've been waitting for it for two weeks by now. Maybe the French tax needs more time.
I'm registered in France but as mentioned, my products are shipped from outside EU to other countries.
So I do need to learn and get help about taxes.
Could you tell me what type of services you provide?
Thanks!
Hi Rapidturtle,
we provide full compliance services, starting from registration (when applicable), store configuration (always needed) automatic report generation (returns, post-sale discounts and exchange rates taken into account). Our service scope is slightly less for EU merchants than non-EU, which is taken into account in our pricing. EU merchant IOSS pricing is not on our website, just get in touch with us 🙂
More here: https://apps.shopify.com/eas-eu-compliance
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