EU Import One Stop Shop (IOSS) support

Max1957
Excursionist
25 0 26

On the 1st July the EU introduces a new tax regime for UK e-commerce distance sellers selling into the EU.  For sales under Euro 150, e-commerce sellers can opt to charge destination country VAT rates to speed up delivery.  For sales above Euro 150, sales will continue to be VAT free with the customer having to pay VAT / charges when the package arrives in the destination country.  Will Shopify be implementing this threshold so that VAT is included/excluded automatically, or will sellers have to process refunds above Euro 150 or use an external app?  Any help on this would be appreciated..

Replies 360 (360)

SSHARP
Visitor
2 0 2

Agreed with all comments here and also in need of some information from Shopify on whether this functionality for order threshold on tax settings is in the pipeline. I assume EU IOSS is going to be used by a decent portion of Shopify's users that would warrant addressing in some fashion. 

ShavingTimeDave
Tourist
9 0 6

I have just send a series of emails with the IOSS PDF to shopify support, I would suggest that everyone does this so that they can take notice and start preparing

MarshallF
Tourist
7 0 16

I wrote to Customer Service and here, in part, is the reply:

... I can confirm our developers are working on changes to how Taxes will be applied once this change comes into effect. At this time, we don't have additional information at this time about how exactly those changes will look once our developer team has completed them.

We do have a blog on our Shopify Blogs that contains some additional information, which you can check out here. [https://www.shopify.com/blog/eu-vat-changes-2021]

Please be assured that changes will be communicated to our merchants once our developers have determined how those changes will look in your Shopify Admin. You can always keep an eye on the Shopify Changelog, which announces all updates and feature rollouts on Shopify's platform....

 

Christian48
Excursionist
19 0 14

July is fast approaching, so hoping to see an update soon....

Incidentally does anyone now how to register with the One Stop Shop? My sales to the EU exceeds the 10,000 euro threshold, so I guess I need to register somewhere, but I'm just going around in circles! All web searches say you can register from 1st April 2021, but don't give a web address to go to.

JackBlack
Tourist
8 0 6

Any updated information on this? Is Shopify not helping?

Max1957
Excursionist
25 0 26
ShavingTimeDave
Tourist
9 0 6
I tried twice to register on the Irish site and have received this on 23rd April

Hi Dave

We are waiting confirmation on whether UK traders will need to use an intermediary to register for the Import Scheme.

We are advising UK traders to hold off applying for the Import scheme (via an intermediary) until we receive confirmation.

I will contact you as soon as I receive this.


Kind regards
Niamh

Niamh Maguire | IE VAT OSS | Office of the Revenue Commissioners, Personal Division, Louth District, Millennium Centre, Dundalk, Co. Louth, Ireland.
• +353-858586194 |•mossnsd@revenue.ie


Max1957
Excursionist
25 0 26

Dave, Interesting.  I read the whole EU document regarding IOSS and I thought that it was pretty clear that an intermediary was NOT required - but maybe I was reading it solely from the perspective of my UK on-line business.  I have held off registering until I understand what Shopify are going to do ....

ShavingTimeDave
Tourist
9 0 6

I know, Shopify released this in April https://www.shopify.com/blog/eu-vat-changes-2021

But the IOSS pages clearly states this: https://ec.europa.eu/taxation_customs/business/vat/ioss_en

ShavingTimeDave_0-1621277487372.png

 

This is what I received from support@shopify 

Washington (Shopify)

Apr 30, 2021, 13:34 EDT

Hi Dave,

Washington here from Shopify Support. Thank you for reaching out to us, and I'll be helping Andy with emails today.

To answer your IOSS tax system concern, while our Product team is aware of this, we do not currently have any public documentation. We won't until we have a process in place. In the meantime, just as Andy mentioned we would recommend reaching out to your local Tax authority for more information about the changes. You can also check our Shopify Changelog - Click here for updates about this when it is available.

If you need anything else, please feel free to reach out to us again. I'll be more than glad to help you out whenever & wherever.

Kind regards,
Washington | Shopify Support

 

 

 

Christian48
Excursionist
19 0 14

Thanks for the link .  Having read what  has posted, I will hold off for now on applying.

It would seem that UK sellers, selling to the EU will be in the same position from 1st July as non-UK sellers, selling to the UK were on 1st Jan. I haven't seen any functionality added to Shopify to help address the new VAT rules in relation to the supply of goods to the UK from the 1st Jan, so I'm not hopeful Shopify will be forthcoming with a solution for 1st July.

ShavingTimeDave
Tourist
9 0 6

I have applied again and received the below email. I have also read here https://www.ukbusinessforums.co.uk/threads/eu-ioss-signup.412355/ that Royal Mail are going to be an intermediary for UK customers and I am requesting additional information from my RM Account Manager. 

The details of an intermediary are here: https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part10-special-schemes/vat-ecommerce...

1.4.3 What is an intermediary for the IOSS?
An intermediary is a person that has their business establishment or a fixed
establishment in the EU and represents a taxable person for the purpose of the IOSS.
If a person has no establishment in the EU, they cannot act as an intermediary.
To act as an intermediary, that person will first need to register as an intermediary
for the purpose of the scheme. The Member State of registration will be the
Member State where the intermediary is established. If the intermediary has not
established their business in the EU but has multiple fixed establishments in the EU,
the Member State of registration will be the Member State with a fixed
establishment where the intermediary indicates that they will make use of the
Tax and Duty Manual VAT eCommerce – Registration for the OSS and IOSS from 1 April 2021
8
scheme. The intermediary will be bound by this decision for the calendar year
concerned and the two calendar years following.
Upon registration, the intermediary will be allocated an intermediary identification
number. It is only once the intermediary is registered as such for the IOSS, that they
may register taxable persons that they have been appointed to represent. The
intermediary will receive a separate IOSS identification number for each person they
represent under the scheme.
Where an intermediary is appointed to represent a supplier under the IOSS, the
intermediary will have responsibility for the payment of the VAT due and the
fulfilment of the VAT obligations of the supplier under the scheme. Such obligations
include the filing of returns and record-keeping obligations.
A taxable person cannot appoint more than one intermediary to represent them at
the same time.
To register as an intermediary in Ireland, a person will first need to apply for a Tax
Advisory Identification Number (TAIN). Where an intermediary is registered here and
wants to register a taxable person for the IOSS, the intermediary and their client will
be required to complete and submit an IOSS intermediary link notification

Dear David,

 

I note that you have reapplied for the Union Oss Scheme. This application has been disapproved. You will receive an automated email seeking further clarification, please ignore this. As previously advised the IOSS scheme would be most suitable for your business. A non-EU business (UK included) must engage the services of an intermediary for the purposes of the IOSS scheme.

 

More information on the scheme and the role of the intermediary is available here

 

Kind Regards,

Rachel

Rachel Williams  | IE VAT OSS | Office of the Revenue Commissioners, Personal Division, Louth District, Millennium Centre, Dundalk, Co. Louth, Ireland.

( +353-42-42179 |*ossnsd@revenue.ie

EUlawgeek
Tourist
6 0 3

I am going through this thread because I am finding out what the VAT implications mean for clients, which have the same issues as reported here.

ShavingTimeDave has rightly pointed out that Shopify is responsible  for VAT on parcels under €150. I have not seen any  movement on this from the side of Shopify. They should offer sellers the possibility that Shopify deals with VAT on parcels under €150, but this is probably new for their business model and they are figuring out what to do with this obligation, if they are aware of this at all.

I understand that they are building the infrastructure for sellers to use IOSS, which is good, albeit late. But as said, sellers will need to have the choice whether they register for IOSS or not if selling low-value items.

Another thing that I saw somewhere in this thread:

€10,000 sales threshold - this is for OSS and not IOSS. It doesn't apply to third-country sellers, which is the UK. EU VAT applied on all UK->EU sales at local rates.

EUlawgeek
Tourist
6 0 3

This is my interpretation of the EU guidance, but I have to say that this is not a clear-cut case. The EU doesn't talk about market places but about 'electronic interfaces' that 'facilitate sales'. Shopify is not a market place indeed but it is an electronic interface facilitating sales. I advise my clients to register for IOSS and we have to wait and see how Shopify interprets the rules and what the EU thinks of the type of services that they provide, and whether this is challenged by either the EU or someone else. Let me know if you find something in the EU rules that excludes Shopify from their VAT responsibility for low-value parcels.

DaveOliver178
Tourist
4 0 3

I spoke to Shopify support on this issue yesterday and they told me the changes would be released into Shopify on July 1st and there would be instructions a few days beforehand. 

EUlawgeek
Tourist
6 0 3

Thanks DaveOliver178

I would be helpful if Shopify communicated right now what the changes will be. People have to anticipate what the changes mean for their margins, plan optimal customer journeys and inform their clients.

iambmw
Visitor
2 0 1

If you are non eu based you will have to hire EU based intermediary to register for you, that's why I read so far

MarshallF
Tourist
7 0 16
SamosEcommerce - thanks for the information. It appears that you are UK
based. Can you/do you work with companies based in the US (or, for the
benefit of other readers, any non-UK country) on the EU VAT scheme
described in the article?
Thanks.
MarshallF
beikuo
Excursionist
17 1 3

I'm very confuse with this new rules in-place, since English isn't my first language. Can anyone correct me if I'm wrong? 

 

From my understanding a US selling will have to collection VAT if the order amount is lower than Euro150 or this is optional?

If US seller will have to collection VAT, then we will also need to register IOSS charge VAT at the check out and then pay the VAT to EU? How does this even work?

 

And orders above Euro150, the customers will have to pay for the VAT when the item arrived to the destination country. That means that as a US selling we don't have to do anything? 

 

I'm also consider listing on marketplace like eBay since they will provide their own IOSS. 

 

Matt_Grech
Excursionist
18 0 11

Registration to IOSS is optional. If you do NOT register, you send items to EU customers WITHOUT VAT tax, and then those customers will have to pay Import VAT and postal admin charges for parcel clearance. These postal admin charges can be very high in some EU countries like Belgium (it is Eur 20 for post office charge). So some customers get deterred with this.

If you do register for IOSS, the EU states that you would need to register with a financial intermediary based in an EU state who will then submit your monthly VAT statements to the EU for payment. This is why it is complicated and expensive for small businesses.

Max1957
Excursionist
25 0 26

Matt,  My understanding as a UK based e-commerce business selling items into the EU is that you don't have to use an intermediary.  You do need to register for IOSS in an EU country, but you can do that directly and mange it all without using an intermediary company.  

Matt_Grech
Excursionist
18 0 11

Hi Max1957. We cannot find anywhere on how to register directly to the IOSS even on the EU portal. How would a UK business submit the monthly VAT statements to the EU then? (At present we use Quickbooks for our digital UK VAT submission to HMRC). That is our dilemma. We would have no issue registering and submitting the EU VAT returns ourselves. The service plans being offered by some "financial intermediaries" are exorbitant to say the least.

Max1957
Excursionist
25 0 26

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....

Matt_Grech
Excursionist
18 0 11

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.

Christian48
Excursionist
19 0 14

, where within Shopify Admin is the new taxes/shipping solution with the £135 threshold for EU countries? 

Matt_Grech
Excursionist
18 0 11

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.

Regards,

Shopify Support

Christian48
Excursionist
19 0 14

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.

EUlawgeek
Tourist
6 0 3

I concur. I am surprised so many companies are saying that you need an intermediary. Sometimes against extraordinary prices. I wonder if they can prove that. The EU site says that third country sellers "normally" need an intermediary. My interpretation is that a UK business can register individually in any EU country. This is because in the EU-UK Trade and Cooperation Agreement (TCA) there is a clause that EU and UK will cooperate in VAT fraud matters. There is another EU legal document that says that biz from third countries that  have an agreement with the EU to cooperate on VAT fraud will not have to use an intermediary. Bear with me, I am building this legal case. In the meantime, I am happy to know where all those that advocate intermediary services got this from.

EUlawgeek
Tourist
6 0 3

This is interesting. I would like to hear more from people with experience with the IOSS registration process. My interpretation of the law is that this should be possible but the practice might be different. At the moment and intermediary seems to be the most risk-free option, but if not strictly necessary, businesses can save costs.

BetterReportsT
Tourist
18 0 1

Hi @Max1957 

Tiia here from the Better Reports support team.

I believe our app Better Reports may be able to help. While we are not able to manage how taxes are applied to an order, we can create sales reports that list our standard sales metrics including gross sales, net sales, and total sales by country (either shipping or billing country).  We can also create reports that show sales grouped by "Is in the EU" or "Is not in the EU".

Additionally, we can create reports that list all taxes that have been charged by order.  These reports can be set up to show a summary by month or quarter and can also be scheduled to send your email or Google Drive at set frequencies (i.e. weekly/monthly/quarterly).

In addition to building custom reports to meet your specific needs, you'll also get access to 60+ built-in reports that cover many common use cases for merchants and all of the reports can be directly exported to Excel, csv, or pdf.

I encourage you to install Better Reports and start your free 14-day trial, and I'll be happy to set this up for you!

ShavingTimeDave
Tourist
9 0 6

An update from Shopify 21st May 2021

Hi David!

This is Norma here again.

I made sure I have the correct information before getting back to you.

As a Support Advisor, we don't have updates from our developers yet on the upcoming new tax rules, so I went ahead and reached out to our Tax Support to check if they have further information on this.

According to our team, Shopify will continue to support you and other merchants through this change. What they can suggest is to wait for our developers to complete the update then we will let you know whether you need to hire an IOSS intermediary to help you pay taxes. Don't worry, Shopify will make sure to notify you about this and you'll have enough time to prepare before the implementation of these changes. All we ask from you is your patience and understanding.

If you need real time support, you can contact us via phone/chat available for you, 24/7! You can also check our Help Center for other tips and tricks that you can use for future needs.

Don't hesitate to ask for further assistance on this.

Stay Awesome, Safe and Healthy!

Norma | Support Advisor
Shopify

Bibico_Admin
Shopify Partner
30 0 10

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.

https://www.taxamo.com/taxamo-assure-rmg

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.

 

Matt_Grech
Excursionist
18 0 11

Yes we have seen that but at £2.00 per parcel (+ VAT on the parcel order), it can still be expensive on a monthly basis. It will all depend on the number of EU parcels sent monthly.

Bibico_Admin
Shopify Partner
30 0 10

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.

 

 

Bibico_Admin
Shopify Partner
30 0 10

Thanks, alot of our eu orders go through marketplaces so taxamo is not a bad option. Happy to look at your offer if it includes IOSS.

Is it your own network or do you use other courier networks, if so which ones do you use?

 

Thanks

 

SimonBig
Visitor
1 0 1

Has anyone implemented Taxamo with Shopify yet? We only have a small number of EU orders at the moment so this would be ideal for us.

NicheMiche
Tourist
6 0 3

I am curious to know this too. I cannot see how to integrate Taxamo in Shopify?....can it? It states it will integrate Magento from 1st July, but does not mention Shopify?

Our EU sales just dropped off the moment Brexit kicked in on 1st january. Until then, we sold more units into the EU than anywhere else. Now we only do about 4 sales a week into the EU, but we are desperate to get them back, so feel we need to be IOSS registered. At this point everyone, including our accountant is truly confused by it all!

Max1957
Excursionist
25 0 26

I echo all your points.  Having had my IOSS registration rejected by the Ireland authorities on the basis that the UK doesnt have a mutual assistance agreement with the EU, I am at a loss as to what to do.  My accountant is likewise unclear about it all, having done extensive research it seems that confusion reigns...

NicheMiche
Tourist
6 0 3

But how, with whatever we do, do we set up the IOSS into Shopify? Taxamo has no app for this?. SamosEcommerce, how would yours integrate?

Thanks

Bibico_Admin
Shopify Partner
30 0 10

I agree its a nightmare I I think the situation will be changing daily.

I see Royal Mail testing a solution that could avoid ioss registration but work in the same way > https://www.royalmail.com/import-one-stop-shop-ioss 

I think I will start with taxamo or these guys https://www.crossborderit.com/ioss first, if later we can reg for ioss in the UK we can change and have not paid big ioss regisitration fees (which most ioss intermediaies are charging.)

 

 

SarahFB
Excursionist
25 0 12

Yes, I am hoping the Royal Mail PDDP as an alternative to IOSS registration may work for me.  Their Click & Drop service already integrates with Shopify and I can set the taxes to be charged at the correct rate for each EU country through Shopify so on checkout (having factored in the extra Royal Mail charges into my EU postal rate) the correct amounts should have been paid and can then be paid onwards using the PDDP service.  Well, here's hoping that's how it will work!!! 😄

Bibico_Admin
Shopify Partner
30 0 10

I am not sure if you get customer order returns but the benefit with the ioss return is that we can reverse any vat we paid when we recieve a refund. I am not sure if we will be able to do this with the Royal Mail PDDP.

I believe with there solution once the vat has been paid you won't be able to recover this in the event of a return.

If this is not the case please let me know!

 

SarahFB
Excursionist
25 0 12

Luckily, I don't think I've had one return in twelve years of trading, only a few undelivered orders due to incorrect address.  So this wouldn't be a deal breaker for me, I'm not VAT registered in the UK and I'm still unclear if I will have to be to charge EU VAT whether it's via IOSS or whichever service. 😕

Det742021
Pathfinder
83 1 26

They sadly only take max 2kgs if you ship abroad, so RM is only good from really small and low value items

Deloitte and others charge a fortune to register for IOSS, anyone using fedex at all?

Dbaca
Pathfinder
166 0 42

We charge nothing to sign up of IOSS,

We charge €19.99 a month for reporting, compliance and everything else

We charge 1€ per shipment. 

We have a Shopify App in Beta and it can handle Duties and taxes for high values globally.

We work with every carrier you simply ship with the number- upload transactions to us- We will collect and pay the money.. Everything can be monitored in our SaaS system. When the Shopify app is tested you will not need to upload manually anymore. 

https://www.crossborderit.com/ioss

 

 

Dbaca
Pathfinder
166 0 42

I think this is an important approach. However, the VAT and fee can be passed on to the customer. VAT is a sales tax and is supposed to be paid by the buyer of the goods. That is the point of all of this. If It is done at a price that the customer will be happy to pay it is good. 

By far yes look at the total cost. However, the IOSS is for any carrier and having that flexibility is nice. That is why we designed the price as we did. We are not the only game in town and I am sure there must be other competent intermediaries out there.  

I am a big believer that customers should choose the service that fits their needs.

Det742021
Pathfinder
83 1 26

Thank you both, really helpful. 

We already signed up with you guys, and may sign up with the others as well, we ship worldwide and 40% of our customers are foreign, so for us, this whole is a real nightmare, also some items are high value.

If the product comes back that can kill us.:D

Dbaca
Pathfinder
166 0 42
We offer high value clearance as well Globally. IOSS is a little special but we offer True DDP globally.
Dbaca
Pathfinder
166 0 42

Crossborderit also can return some of the funds if it is returned (highvalues)

We certainly can return IOSS payments. There is a transaction fee on returns.

Bibico_Admin
Shopify Partner
30 0 10

Hello

 

Can you clarify this?

"Crossborderit also can return some of the funds if it is returned (highvalues)"

Can you confirn in the event of a return all the vat is returned except for your transaction charge?

This is important as we are a clothing company we get returns.

Thanks

 

Tim

 

 

 

Dbaca
Pathfinder
166 0 42

This is not 100% ready in the system yet but if there is a return on a shipment you can upload returns and our system will be able to take VAT within 30 days and return it to you.. We are still working with the tax authorities on this but this will be possible. We will charge our 1€ for this as it is still a transaction but a reverse transaction. Many things with IOSS are still up in the air I am sure you see carriers and tax authorities are lightly unsure about things. Returns are a topic we have spoken to them about and as systems are up and running we will be able to perform this service.