Will Shopify implement the new EU tax regime for UK e-commerce sellers?

[Max1957]

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..

[MarshallF]

My read of the new tax rule is that it applies to ALL non-EU sellers, not just UK.  I have the same question as Max1957 and am somewhat distressed to see that there has been no response to his/her question in a week.  Here is the link to the IOSS page

[MarshallF]

Further thoughts and questions:  The new EU VAT regime (July 1, 2021) will affect all B2C sellers -- both EU and non-EU -- who sell cross-border.  And as Max1957, this only apply to sales less than EUR 150.  I can see that Shopify will allow one to set up a specific tax rate for each country, but I don't see a method to add VAT to only those orders from EU country X (at that country's rate) that fall below EUR 150.  It looks like all sales amounts will have tax added or no sales will have tax added.  Can anyone address this?  Also, "Any businesses selling less than €10,000 per annum cross-border on B2C goods and services will be exempt from the obligation to complete an OSS return. Instead, they will be able to charge their domestic VAT rate and report the sales below this threshold in their regular domestic VAT return." Source: https://www.avalara.com/vatlive/en/vat-news/eu-2021-one-stop-shop-vat-return-for-e-commerce.html. Finally (for now), please share the names of any experts or companies with whom you have had a positive experience in r=deal with VAT issues.

[BetterReportsT]

Hi @MarshallF,

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!

[MarshallF]

I appreciate all the discussion and helpful suggestions posted on this board, and I notice that most of you seem to be in the UK. I'm wondering if there are any participants who sell from the US, as do I? Our issues and solutions are slightly different (the commercial intermediaries suggested seem to only be able to work with UK based sellers) and I'm interested in learning what others (US) have discovered.  Also, I'm a very small company and I have few sales  to the EU and even fewer of less than €185.  Anyone else dealing with a similar situation?

[Ksasnic]

What if we are not vat registered as we don’t earn enough to be so? I am so confused.

[Det742021]

I found this for you, hope it helps, you can just send the goods as DDU, your customer will pay the vat and duty when the get the goods,

Your clients sales would be zero rated exports, so would count towards UK VAT registration, but let us assume your client is still not liable to register for UK VAT as well under the £85k threshold.

IOSS is where the goods are not in the EU at time of sale (ie, UK to EU). Whereas One Stop Shop (OSS) mainly for where the goods are in the EU at time of sale.

IOSS is optional, in theory your client can continue to just sell as they are now and customer is liable for the duty/VAT, however, because your client sells via Etsy, Etsy is an Online Market Place (OMP), the OMP is liable for charging the VAT on sales where the seller is not VAT registered themselves, and the OMP is liable for declaring that VAT on their own IOSS VAT return.

So you may find your client lists a product on Etsy and Etsy will add VAT to that selling price so that the EU consumer buys goods with their local VAT charged.....see the Etsy website
https://help.etsy.com/hc/en-gb/articles/360000337247-How-VAT-Is-Collecte...<>

"As of 1st July 2021, Etsy will automatically collect and remit VAT from EU buyers purchasing goods that will be imported into the EU where the physical goods are less than or equal to 150 EUR."

So it may be your client has nothing to do other than revise their pricing model to make sure they remain competitive once you've factored in the French or Spanish VAT that Etsy will add to the selling price.

Goods over £135/€150 do not fall under IOSS, IOSS is only for under £135/€150, over that and its a zero rated export/customer liable for the VAT their end.

[Dbaca]

That sounds interesting if customers want to change transportation services but IOSS works regardless of carrier..good informative post

[PEZ]

Hi, I'm all sorted with IOSS via Avalara and use a sheet app in shopify
to create the return. Thanks for the info which may be of use to others

[TeemuEAS]

Because of merchants not having automations, calculations and reports EAS is having new customers constantly using the mentioned IOSS registration company simultaneously. 

[Matt_Grech]

As a UK Shopify merchant, I must say that we are very happy with EAS Project. Their app works seamlessly in Shopify and at the end of each month, there is a detailed report of the sales for that month. Registration for IOSS went seamlessly with them and we have already seen a quiet return of the EU customers we had before so we are hopeful that the upward trend of returning EU customers will continue. 
We do not have to download reports or anything to EAS - it is all done through the app and they help with the installation and integration. 

We recommend them wholeheartedly.

[PEZ]

Why would I want DDU and get customers to face fees at point of entry and slowed goods? IOSS is designed to get around this? I am all sorted on IOSS now as its been a while but thx for the input

[Dbaca]

We have gone live with our IOSS app https://apps.shopify.com/duty-calculator

You can learn more on our product page. https://www.crossborderit.com/shopify

[chris-oc]

I too have been asked to look into this for our ecommerce store. 

I have all the same questions as Max & Marshall. 

Would there happen to be an help on this?

[Pauline_Millwar]

We are also in need of confirmation that the functionality will be implemented, so that VAT is only applied for EU orders under £135 and there will be an easy way to extract the sales and payment data for these orders. Many thanks.

[Pauline_Millwar]

It looks like the .gov website has been updated -

https://www.gov.uk/government/publications/eu-e-commerce-package/eu-vat-e-commerce-package

Interestingly it mentions a UK portal, but it might not be ready by the 1st July

“A business not established in the EU or Northern Ireland wishing to register for IOSS will be able to do so in any EU member state or in the UK.“

[Det742021]

Anyone knows why shopify is still charging over the threshold? We followed all settings correctly, set up one stop shop.

Fully registered, all set up, but we keep charging customers over the threshold, so I don't know what to do, shopify support was mainly useless sent me few manuals

we read many times, not very helpful. Anyone have the same issues?

[Foxxycarr]

@Det742021 I have set my companies shipping rates to EU based on order value of a max of £130 - if an EU customer tries to order more it will not let them order.

**VERY IMPORTANT** If you do the above you have to change 2 error messages that Shopify displays (under languages) else Shopify will give the messages that you do not ship to the country they are trying to order from!

Hope this helps as it's working for us.

[Max1957]

I need a solution that works properly for orders below and above the 150 Euro threshold, so I am going to wait for Shopify to fix things before I make what could be irreversible changes..

[rivalhockey]

Just seen this morning that UPS are now requiring an IOSS number for european shipments, unless the value is over 150 euro or the shipment isn't going to an end consumer. 

So much for IOSS registration being optional.....

[Dbaca]

We handle both in our system.

[Christian48]

@Dbaca When uploading the file, does the SalesAmount include the shipping cost? Also should the VatAmount be included in that figure too? It's hard to figure out from the example you provided in the uploading instructions. I can't see how the VatAmount in the example can be 33 when the vat rate for Sweden is 25%. 25% of 123 is 30.75.

[frasers]

@Dbaca I have sent you a private message for my ioss number but haven't heard back from you, not sure whom I can get in touch with for this issue? It has been more than a week we applied for the iOSS but so far not received anything.

[NicheMiche]

@Dbaca I have now signed up with you guys and have my IOSS number. But question for you, and I ask here, as I suspect others may also want to know. We have two webs shops in Shopify. But both owned by one limited company, so one UK VAT account and one company number. So can I use the IOSS number in both websites? Your online application form only allows for me to add the one web shop. 

Thanks!

[frasers]

@NicheMiche 

@Dbaca 

Did you receive their reply? Are you able to start shipping with the code now? I tried to contact them both on this post and on email regarding how to pay VAT and their service charge, but so far received no reply.

[NicheMiche]

@frasers Nope! Absolutely nothing at all. I emailed Monday and as yet zero response. I am shipping currently using the number they supplied, but tentatively, as I want to see if goods make it through or not.

But they were so active on here promoting themselves, then literally they vanished. I have the exact same issues as you. Nowhere to pay, and no response. Hence I am looking now at Taxamo. But I cannot see if this will link to Shopify or if I am just jumping out of the frying pan and into the fire!!

[frasers]

@SamosEcommerce 

each one has different conditions, we ship mostly from US and China by many different carriers, different lines. It's not possible to use your service. 

[Dbaca]

This works fine for Crossborderit

[Dbaca]

Feel free to E-mail me directly
Thank you,
Damon

[frasers]

@Dbaca 

We emailed to you here privately and emailed to support@crossborderit.com, info@crossborderit.com

No one reply. Really annoying that we get the IOSS code but no one can let us know how to use!

[rivalhockey]

In exactly the same position. Have received the IOSS code but no instructions from crossborderit, despite numerous emails....

[Dbaca]

Email me directly and I will send the directions.
damon@crossborderit.com

[Dbaca]

You simply manifest with the number. Then upload your shipments into our system. E-mail me directly damon@crossborderit.com and I will give you the directions. It is really quite simple.
Damon

[AnyDevil]

You've already posted this many times, this is becoming spam.

[SarahFB]

@SamosEcommerce How do you access your shipping? I use Royal Mail Click and Drop for all my parcels at the moment as it's a solution that totally suits.  How would you ship EU parcels for me? Thanks 🙂

[Det742021]

Hi guys, im having a real difficulty because of the lack of shopify support!

* Since the 1st July all new settings applied, IOSS number applied and the website work correctly and taking VAT for each Eu country we sell from the UK.
* We sell a lot over the threshold and Shopify charging VAT over the threshold (£135Gbp), with all correct shopify settings the website keep charging VAT, causing us massive issues, and shopify support is useless. Shopify support doesn’t even understand the issues, try to rid of me, brush me off, not reading notes, not looking at anything.
* We sell over 10K to the EU per year, so it is not an option for us not using IOSS.
* Anyone here have the same issues with the website, or I am a kind of moron and missing something…

[AnyDevil]

No, you're not alone. I tried a while back and it wasn't possible to get across that this has absolutely nothing to do with Brexit 1st January changes. Like with many of the feature releases, the US is the focus.

I can't even get as far as you have, because I have direct VAT registrations in two EU countries (which EU VAT law still requires for each country in which a non-EU based seller is using Amazon fulfilment warehouses).

The Shopify system won't let me use IOSS because "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."
https://help.shopify.com/en/manual/taxes/eu/eu-tax-reference#one-stop-shop-schemes

So, to get around this to be able to ship to EU-based customers, I will have to remove my EU VAT numbers and go via IOSS. But we're not allowed to pay those countries VAT via IOSS, because we have a direct VAT registration with them, meaning that even though we're a UK business shipping from the UK, VAT on our Shopify sales to customers in those countries must be reported and paid in the normal pre-IOSS manner.

There must be so many other UK-based Amazon sellers in this position. Can anyone advise what they're doing here, please?

[Det742021]

Finally I got some help and now the website works, does not charge VAT over the threshold.
Maybe it is easier to be registered with IOSS instead of the single registrations.
I tried to register with Ireland and was rejected, so I have given up and registered for one stop shop.

[Max1957]

I got rejected by Ireland for IOSS, but you say that you are now registering for one stop shop - can you advise how you are going to do this.  

[Det742021]

I use the one stop shop for Ireland as well, and the goods were delivered.
The couriers did accept them, nit have not yet done a return.

[AnyDevil]

Did you need to change any settings to get it to work, or it's a matter of them having put through a fix?

[AnyDevil]

Also, is your pricing now different depending on the country?

I'm yet to switch on IOSS but I'd really like the price to be the same no matter the country (i.e. whether the VAT rate is 20% or 25%, it still charges the same, other than currency exchange difference).  With the direct VAT registration option, that's how the pricing is handled by Shopify.

[Det742021]

I have added our IOSS into shopify Tax settings, our website didn't work correctly, because I followed their manual and added the IOSS within the EU Section.

Go to

-Settings

-- Tax

--- Choose EU from the list, next the the EU you can click on manage

----Ignore shipping within EU, you have to chose the section SHIPPING TO THE EU

-----Add you IOSS number and the country you received this registration from. This is only valid for the IOSS number.

Then save and that is it.

If you want to collect the VAT from all Eu AND you also want to collect above the 150£ threshold (collect VAT above threshold is optional), you can also do this, but then you have to fill out the IOSS details inside the SHIPPING WITHIN THE EU section.

This is what I have done wrongly. So our website was charging everyone VAT.

Shopify programmed correctly all the VAT rates for each country, it works.

Then we have to report these transactions with Crossborder IT. I will start doing this tomorrow as they had technical difficulties and just received their manual.

you can email me if you need help, or even call us, if you like, pm me

[Temi18]

Hello,

I am yet to go live with my business but I intending to shipping to the EU.

Which EU country would you advice that I initially register for IOSS with?

Also what do we do in situations where customers order about the IOSS
threshold?

I really appreciate your previous explaination, on how to add in your IOSS
number for orders under the threshold.

[Det742021]

Hi
You will need an intermediary company, they are mostly in the Eu. Within the UK KMPG and Delloitte offering services, but they charge massive amounts..
We registered here with CrossborderIT, we received our IOSS number within a day so we can continue trading.
They are based in Sweden.
I attached where to add the IOSS number, so Shopify then correctly will deal with the VAT.
It is under
-Settings
-- Tax
--- EU—Manage
-----Shipping to the EU section!
Insert you IOSS number here and also the country where you are registered with your IOSS number with
Ie us for example Sweden

Then SAVE and it should work

There is also a company called Samos here, who were very helpful, they also do shipping for you if you need them.

Registering with each country, or with you is really difficult, we got rejected by Ireland, they don’t give you IOSS number for example, only if you offer services not goods.

[Temi18]

I think I understand. I will contact CrossborderIT to find out how much it would cost.

Or is there a CrossborderIT rep in this chat who could speak to me briefly? 

[Det742021]

If you go back few pages on this forum, there is a support guy and his email.
You can also book a demo on their page.
They charge 19.99 euro per month plus some smaller extra fees, I guess we will have to increase the carriage, to recover the cost on these at our end

[Temi18]

Thank you for the extra information. May I ask what you have put in place to deal with orders over the IOSS threshold? 

[Det742021]

Over the threshold you cant use IOSS, we ship worldwide every day, so orders over the threshold left us and we sent them with Fedex.
Fedex then will collect the VAT and duties in the related country.
The problem now that most customers are not aware that they may have to pay extra duties, so it can be a shock..
We use the commodity codes/tariff numbers for each line
We get special rates from Fedex. Within EU we use DPD, Royal mail or DHL, sometimes Parcelforce.

We now started emailing customers before we send the goods out.
Customers will not get the goods until they paid the VAT and duties, we use DAP incoterms.

[Temi18]

Thank you for explaining.

I am still a very new small business looking to launch next month. I have decided to keep it simple for now and use royal mail for my UK, EU and US orders.

I am so overwhelmed and confused as to whether I should sign up for IOSS now, so I can provide a better customer service experience for my customers Or wait till I've grown more as a business.