Feature Request: Integration of Taxamo assure into the checkout for UK companies selling to EU

[amanda_drury]

I'm not sure how to put in a features request - please can someone tell me if this way doesn't work.

I have been looking into how as a small business I can improve the experience for my EU customers of purchasing from myself, post Brexit as a UK business.

Royal Mail have recommended a company called Taxamo assure which acts as a IOSS. They calculate and charge the customer VAT and pay it to the EU on our behalf without us having to fill in the VAT return. They charge £2 for each transaction. It sounds like the perfect solution but unless you are a shopify plus business one cannot get access to the Shopify checkout and do the API integration. The irony is if you are a shopify plus customer you will be big enough and it will be more cost effective to set up your own IOSS.

I have spoken to support about this who have suggested that I put in a feature request. So here it is. If more people can also express an interest in this feature it may have more chance of being implemented and go somewhere to ease the Brexit headache of doing business with the EU.

[Morning]

"-0 EUR items are a nightmare (we send out a lot of replacement stock).  Don't forget that IOSS also deals with duty and a 0 EUR item still has an underlying dutiable value!  CBIT simply can't deal with this because it works from the cart total not the underlying product value like Taxamo does.  So, we now send out all replacements at a 90% off discount and manually capture 0 EUR payment so that we *can* pay duty"

But IOSS doesn't deal with duty. That's the whole point of the 150 euro threshold - it matches the ‘goods of negligible value' threshold for duty exemption. I'm not sure what you mean when you say "so that we *can* pay duty"?

Regarding replacements, I've only found one reference to replacement consignments in everything I've read on the IOSS:

"There are situations where the imported goods are defected, but the seller allows the importer to keep them instead of returning and then ships new ones.
From a customs perspective, there will be two CDs for release for free circulation as each of those cover different goods that will be released into the single market. The VAT procedure should follow the present situation for replacement of goods."

As to what that procedure is... I have no idea.

[LauraECY]

I think it is this?

https://www.gov.uk/hmrc-internal-manuals/customs-special-procedures/spe14030

Calculation of duties: goods repaired or replaced free of charge
No duty is due on authorised OP (Outward Processing) goods which have been
repaired, or replaced, free of charge under a contractual or statutory
obligation arising from a guarantee.
Documentary evidence that the repair was free of charge, such as a warranty
or other contractual documents, must be produced with the import entry.

As you say VAT is still due on replacements - which I found on this page:
https://www.gov.uk/guidance/using-outward-processing-to-process-or-repair-your-goods

[SarahFB]

@LauraECY Hi, hope you don't mind me asking you personally but you've made a lot of sense on this thread that I've read all 25 pages of, and I'm another small business here who has had to turn off postage to the EU since 1st July and am looking for an affordable way to send to my EU customers again!

How are you finding Crossborder it now the app is live, is it automatically uploading your transactions and calculating your charges? I am yet to turn download the app or register with CBIT plus I will also have to turn on the charging taxes for the EU within my Shopify settings. CBIT looks to be the best option for me at the moment.

IOSS doesn't deal with customs duty, as you said.  Are you finding that your customers are still having to pay duty or handling fees to receive their parcels? Surely our obligation as businesses sending to the EU is to simply compliant with the VAT aspect.  I have been looking at and waiting for DDP options via Royal Mail but as Taxamo won't integrate with anything other than the super expensive Shopify Plus stores, that seems to be out of reach. Are you aware if duty is only applicable to orders over the 150 euro mark?

My store is all in GBP, so I guess I will need EU customers to be able to view the store in EUR for it to calculate VAT properly?

Thanks and I hope you don't mind my questions! 😄

Sarah

[LauraECY]

Hi Sarah,

The CBIT app is working really well. All our issues seem to have been
resolved and several customers have commented about how smoothly it is
working.

Shopify does the tax calculation if you are set up with region based taxes.
This is something that Support can help with but you will have a region
called European Union in your shipping zones. You then input your IOSS
number in where prompted by Shopify and the checkout automatically shows
the correct taxes for each country regardless of which currency your store
uses. We are solely in GBP and are working on an assumption that Shopify
apply the current exchange rate (happy to be corrected on this!).

Since installing the CBIT app we haven't had any issues with it. It is much
easier than the data upload was!

With IOSS orders there should not be any additional import charges in the
EU, this appears to have been an issue with how Royal Mail was set up
originally. If you enter your IOSS number in Click and Drop you will be
able to purchase IOSS compliant shipping (the options are clearly marked).
We have Shopify and Click and Drop integrated so it pulls the order
information through for us.

I hope this helps!

[SarahFB]

@LauraECY Thanks so much for replying! I was hoping the the app will have smoothed out the wrinkles!

Having done a bit more research (I admit to sticking my head in the sand a little with all this), I am now aware that no duty is due for B2C parcels, so as long as the VAT is charged and collected properly via Shopify and the IOSS info is inputted into my Royal Mail C&D account, with the little icon rather than the number showing on the postage label. Theoretically then the parcel should 'sail' HAHAHA through customs to the customer with no extra VAT charges or handling fees being incurred (plus there is 0% duty as per the UK-EU Trade Agreement).

When you set up the regional taxes, did you need a UK VAT number? I am not UK VAT registered, haven't got the turnover required, and would rather avoid it if possible.  I do have my EORI number already, had that ages and it's already on my CN22 forms printed through C&D.  I only want to charge regional taxes to the EU, nowhere else in the world, is this something you were able to do?

Thanks again!

[LauraECY]

That is a good question. We are VAT registered so I am not sure, sorry! I
don't think they are linked

[SarahFB]

No problem @LauraECY 

Having looked at the Taxes section, under Collect Taxes via IOSS, it asks for registration country? I presume we put this as Sweden as that's where CBIT is based?

[LauraECY]

Yes that is correct!

[SarahFB]

@LauraECY That's great, thank you for your help! I shall download the CBIT Shopify app, then register, as per @Dbaca 's instructions earlier in the thread and hopefully can get shipping to the EU again very soon!

[Nitsa]

@LauraECY  Hi Laura, Interesting and informative, thanks. One question, do you ship many orders to Germany ? I ask because I know that the German postal authorities have stated they won't be ready for IOSS until 2022 and if I were to resume EU shipping many of my customers would be from Germany and I could do without the problem of them being charged twice etc. Would be grateful for any information you may have on this. Thanks. Nitsa.

[SarahFB]

@Nitsa Ugh, really, a lot of my EU customers are based in Germany.  I can't believe they are not ready for IOSS, if that's the case they should be letting parcels through without charging them VAT as it's unfair to charge them twice?? If the parcels are IOSS labelled then this shouldn't be happening? It just gets worse doesn't it!

[Nitsa]

@SarahFB Well, I haven't found any updated info that contradicts this but on the lookout for it as we speak.

https://wwwhttps://www.avalara.com/vatlive/en/vat-news/germany-to-miss-ioss-july-2021-launch-date.ht... 

[SarahFB]

@Nitsa Thanks, and @LauraECY good to hear you've had packages arrive in Germany ok.  All mine are under the 150 euro limit, so here's hoping!

My head hurts!! 😄

[Dbaca]

Most countries should be fine with the IOSS. Some carriers struggled early on but it looks like things are getting normalized.

[LauraECY]

We have shipped a few orders to Germany and we have not had any negative
feedback. I wonder if the situation with Germany is that German companies
will not be able to register in their own country. With CBIT the IOSS
registration and payments are all registered in Sweden and my understanding
is that that allows for delivery to all EU countries. @Dbaca might be able
to clarify the situation.

[Nitsa]

@LauraECY Thanks Laura. I agree some clarification needed. I can tell you that for orders in excess of 150 Euros German customs are an absolute nightmare at present with delays and I really don't want the same experience with smaller orders.

[LauraECY]

We have the same with larger orders, one going to Italy took 6 weeks by
courier!

[Dbaca]

Yes, It really does not matter what country you are registered but Sweden has been very good for us. We are a Swedish company and have good connections with the Tax Authorities. The number should be accepted in any EU country.

[Nitsa]

My husband (Swedish) read your reply about having good connections with the Swedish tax authorities and remarked that you must be the only person who has, (expletives deleted, many of them). His prejudice not withstanding ,I will take a closer look. After I take over from him chopping up the ingredients for our casserole, it's really getting quite violent.:-)

[Dbaca]

Sweden removed the De Minimis three years ago so they may have been a bit more ready of IOSS than some other countries. This is just by opinion.

[SarahFB]

@Nitsa that made me laugh out loud!! Was it getting like the Swedish chef from the Muppets smacking all the veg with the knife!! 😄

[NatashaD]

@Nitsa Hi - I just came across a few of your comments whilst frantically searching for information on Shopify stores shipping parcels to the EU under IOSS. I'm the idiot who, despite probably not having enough EU sales to justify it financially (though I can't afford to lose the ones I was getting pre-Brexit), paid an EU intermediary for an IOSS number and they do my monthly VAT returns. I wanted to be able to continue offering a service to my EU customers who have been incredibly loyal to me over the last few years. I felt I was led to believe a) using an intermediary was the only option if I wanted to continue selling in the EU (Taxamo wasn't an option for me) and b) it would be a smooth and seamless experience for me and more importantly, my customers. Well the reality is very different - I'm pulling my hair out with parcels taking ages to arrive and customers being charged when they have already paid tax! I spoke to Dutch customs yesterday because a customer had been charged for tax there despite already paying it on my store. But what really surprised me was the fact that she told me that the Dutch postal service are still charging handling fees of 4-5 Euros even for IOSS parcels - this I was not aware of as a thing, and I'm not sure my customers will tolerate this. I use Royal Mail (click and drop) and I would have expected them to at least be aware of what their service partners in EU markets are doing with regards to charges like this. The whole point of using IOSS surely was to avoid customers having to pay anything once their parcels arrived in their country - this is what I've communicated them, and now it looks like this might not be true. I haven't come across any other EU countries doing this (yet), though I wonder if it will become the norm? Anyway, my question is, are you aware of this happening anywhere else? Pre-Brexit I was shipping a fair amount to Denmark, Sweden, Poland, Ireland, Germany and France so these are the countries I'm most interested in. Denmark is particularly slow in my experience (that's when they're bothering to deliver the parcels in a usable condition!). I've sent the same parcel to Spain twice with DHL, and it was refused by customs - though I have no idea why! I've been searching online trying to see what people's experience of shipping is since 1st July under IOSS, but haven't been able to find much. Considering I haven't shipped that many EU parcels since IOSS came into force, I feel like I'm having more issues than expected for such a small volume of orders. I saw you mentioned Germany said they wouldn't be ready for IOSS until 2022 - that's insane!! Would love to hear anyone else's experiences!

[Nitsa]

@NatashaD I feel your pain. The Netherlands is also not up to date on IOSS, I know that from conversations with an Etsy seller (Etsy includes IOSS as part of the platform) who has had to stop shipping to the Netherlands. You're also right about handling charges, it's 4 euros if it's delivered or 7 euros from a pickup point, on top of that of course is the VAT being charged again. It's a similar situation in Latvia as well. You also mentioned Spain and I notice that quite a few larger companies won't ship anything less than €150 now leaving the customer responsible for the tax, I can only assume that is also due to the IOSS. I have my doubts whether Germany will be ready in January 22, certainly I have customers there who don't believe that will be the case. According to one of them, if it's digital, forget it, apparently online activities relating to government departments is definitely not part of the famous German efficiency model.

I do get what you mean about wanting to continue to offer a service to loyal customers in the EU. However, at the moment I've decided not to start shipping there as it could end up being a hassle for them as well as me. Another problem that I'm very wary of is using courier companies for products going to the EU, because when they foul up or customs refuse the package your troubles can be just beginning. Depending on the company, it might ask you for payment before they return it or as in the case of TNT, return the parcel to you and then a month later hit you with a bill that is often 3 to 4 times larger than what it cost to send in the first place. You could argue it I know, but the demands dropping through the letterbox and in your inbox is just another hassle. They don't give up easily.

Anyway, it seems from conversations on here that it is working out for some people, but for me personally I have enough problems to deal with and don't want to create any more for what is a relatively small part of my business. Good luck with whatever you decide to do.

[NatashaD]

@Nitsa thanks so much for the reply - it's great to have more of an insight into people's experiences so far as up until now, I've only had my own experience to go on and I didn't know if i was just unlucky! I have had some parcels go through fine so it's not all horrendous (at least I think so because I haven't had many customers contact me to complain), but quite honestly the stress I feel with every EU parcel I send out now is quite real :(. Can I ask where you found out about these issues, is there another forum that's worth me joining? As I'd like to hope and pray that some of this is just teething issues and that everything will improve in a few months perhaps? Or is that unrealistic? I'm also looking at an EU retailer as an alternative option though that comes with a set of other issues I guess. Anyway, thanks so much for replying and I hope all goes well with your business too - what is it you do?

[Nitsa]

@NatashaD I think it’s always going to be the case anyway that not everything gets stopped so there is a certain element of luck to it. I snoop around various forums like Etsy but also various trade forums, we sell tech industrial items. If you think there is dissatisfaction with IOSS here, it’s dwarfed by the anger in the EU countries. Companies in US, Japan, China are turning down smaller orders because of all the complications. Whether you are a consumer or a business customer in the EU, ordering from non-EU countries is just problematic beyond words. And for European companies they also have the headache of OSS to deal with. Eurocrats or Bureaucrats, call them whatever, just seem to be put into this world to make life more difficult for the rest of us.

[NatashaD]

@Nitsa I think you're right - luck does seem to play a part as initially I thought things seemed ok. I would expect a certain amount of teething issues, but hearing that postal operators / customs authorities are not at all ready to deal with IOSS is frustrating beyond words! I just thought there'd be more of an international outcry about it - like you say, it's all countries outside of EU that must be experiencing these issues. Why isn't it reported in the press?! I feel like I'm shouting and no one (other than you and others on here!) are listening! Anyway, thank you for the ear, I do appreciate it 🙂

[SarahFB]

@LauraECY 

Hi Laura, do you mind if I ask you a couple more questions? I have set myself up and followed the instructions as per @Dbaca post in another thread. I have paid the invoice and am just waiting for my IOSS number, however:

1) I have noticed that I have just assumed that I will only be paying the $24 a month for the Shopify Crossborderit App.  I have paid the three months in advance (3 x 19.99EUR) as per the sign up instructions but have realised that I thought I would pay that money through the Shopify Crossborderit app which is $24 a month and I've just paid three months of 19.99EUR.  Am I right in thinking that I will be paying the 19.99 EUR a month PLUS the $24 a month for the integrated app.  I'm guessing if I only want to pay the 19.99 EUR a month I will have to upload my EU sales manually?

2) Do all EU parcels have to be sent via a tracked service for the IOSS to work from Crossborderit? Tracked post via RM is so much more expensive, especially when you consider customers will be paying extra on their postage to try and help cover the Crossborderit fees and the VAT.

Thanks in advance! 😄

[LauraECY]

The app fee replaces the CBIT subscription. I think you should receive a
credit note for any payments you have made which are then paid by the app
costs instead. 24.99 USD is fairly close to 19.99 EUR

You can use either International Standard or International Tracked. We
offer the option to our customers and most have been using the standard
(non-tracked) service. I think there are other services that can be used
but these are the main ones.

I have started gathering data on our IOSS orders and tracked orders seem to
be arriving within two weeks. So far, standard services seem to be taking
2-3 weeks.
I hope this helps!

[SarahFB]

@LauraECY it does, thank you ever so much! I will email and get the 60 EUR as credit and hopefully will receive my IOSS number soon and can sort out my postage prices.

Thanks again, you're a star! 😄

[Dbaca]

Yes get a hold of info@crossborderit.com and they will work on any credits that need to be made. Basically Shopify is charging for the platform instead of us. They do it in Dollars

[Dbaca]

You will be paying just the $24. The subscription is being paid through Shopify instead of through us directly.

[SarahFB]

Thanks @Dbaca for clarifying that.  I think I had to pay the 60EUR invoice, which I did yesterday, to trigger getting the IOSS number, which I am guessing won't be far off now.  I will email to get the 60EUR credited to my account.

[SMU]

Just heads up for anyone sending mail via Royal Mail. Not all their codes are IOSS approved. The following codes are approved and these are the ones we will be using. They are country prices. 

MTK, MTO, MTG, MP7, MP9 and MTE.  There may be more approved codes available but we only use those listed.

I would suggest calling Royal Mail to double check that these codes are on your account and if they are not get them added by the Business Team. If we do not use IOSS approved codes then we will run into issues with deliveries.

[SarahFB]

Hi @SMU , thanks for that, but I think they are the codes for a RM OBA, I use C&D.  I have created a fake order to an EU customer and all the postal options come up with IOSS as an enhancement so I am assuming that they should be delivered with no problems, but that could be wishful thinking!

[LauraECY]

That's right. If you don't have a business account but use Click and
Drop, ISOLP and ITSOLP are both acceptable. You can filter options to show
you IOSS services.