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..

[Det742021]

Yes Taxamo is great as well, and also there was another company here who can help with a lot, I was thinking of Taxamo as connects to RM, but we have several couriers so we may use Taxamo as well and the 3rd company for shipping solution
At the moment we have a problem with shopify charging VAT over 135£ as well, waiting for support

[kossdesign]

Hi guys, I'm a sole trader based in Ireland, I have turnover less than €73k which means i should not collect VAT

Should I have an iosss number?

If I start collecting VAT I guess I should also get it back from fb ads! It can't only go one way

is there anyone can help me? CJ is now charging directly 20% of the final price! So I would like to understand and to be able also to get my 20% back from my FB ads

many thanks

[Max1957]

When I started this thread I never imagined the level of response and interest, and I have learned a lot, like I am sure many others have from the number of posts.  I am a UK based business selling product around the world with order values that range from a few £ to say £300.  Before BREXIT my European business accounted for about 25% of my turnover. Now it is about 5%.  Trying to get back the lost 20% will be a challenge for me and I guess for everyone.  I tried to sign up wit the Irish authorities but like a lot of others in this thread were declined.  I was surprised like many others were that the EU didn't have a mutual assistance agreement with the UK as nowhere in the documentation that I read was that mentioned.  I am going to wait until the end of July before deciding what to do.  There is mention of a UK IOSS portal, but if UK companies are forced to use an intermediary, surely that IOSS portal is only for EU/other nations use, and not for companies based in the UK?  Getting the mutual assistance agreement with the EU enacted would seem to be the critical issue, or at least understanding if it will be enacted. 

[bellboyant]

Click to expand...

Exactly the same percentages for me & the same rejection with Ireland. Tried Malta, no response.  Can't really afford an intermediary.  Wouldn't hold breath on this government sorting anything.  If they have failed to sorting equivalence for the city suspect the won't do anything for ecommerce ... for a long time. 

[NicheMiche]

Hi, has anyone managed to set up Taxamo into their Shopify store?

I have yet to succeed in getting set up properly. I registered with Crossborderit but despite having an IOSS number now, I cannot see how to pay the tax etc, as other than dropping in the IOSS number into Shopify, nothing else seems to happen automatically.

So now I am wanting to see if I can try Taxamo to automate things. But cannot see how to install this to Shopify?

We use Royal Mail for shipping.

I have wasted days on all of this and still do not understand what to do!

Any advice on how anyone is automating things I would be grateful for advice.

Thank you

[AnyDevil]

I'm not using Cross border IT yet (might take the plunge soon). My understanding is that you're meant to be including the IOSS number with your shipments and then you manually submit reports to cross border IT (I think daily?  Obv weekly would be much more manageable - would be great if they could comment here), so they can take care of paying the import VAT on your behalf?

[NicheMiche]

Hi Callum

Yes, thank  you! It would be great if we could get replies. I emailed them also, but guess they are too busy right now, which is understandable. Somewhere on this thread I read that Crossborderit had a Beta app. I would love to try that.

To start uploading daily into the system sounds horrific. As if we do not have enough commercial paperwork since Brexit!

Thank you for your response.

[frasers]

Crossborderit stopped replying message.

Received the IOSS code finally, but we need to know how to pay their fee? There's no any payment method provided to us...

[frasers]

@cetsatadmin we didn't get ioss from UK, crossborder said we can get it from them. 

[Det742021]

We got it from crossborder it in a day

[Det742021]

How does it work if we don't have a shipping system, we have login with fedex, Dpd, DHL, RM separately and we have our discounted rates?

We don't have an app which would deal with all shipments, only using a DPD, and connected with Royal mail so how will this work?

I haven't  seen anything on your site explaining how to use it, and I don't think booking a demo is very useful for us, because it will take days for someone to get back.

Thank you

[Det742021]

thank you, will register 

[Dbaca]

Yes the EIN is for the U.S. Vat will work fine in this instance. 

[Christian48]

Great - thanks 🙂

[frasers]

Same here, can i use my UK VAT number?

[Dbaca]

Yes that is fine..EIN is for the U.S. VAT will work

[frasers]

and how does the system work? I register with my UK VAT and information, after that when I want to ship to EU, I need to log into your website and fill in the shipping information to get a unique IOSS code? 

[Dbaca]

No you sign up with us and have your own IOSS number..

When you ship you can upload a csv file of your shipments, use our API or our Shopify extension (this is in beta)

Then we do the rest, Compliance, Reporting and payment

[Matt_Grech]

@Dbaca You mention that integration with Shopify is still in beta mode. Is there a demo page or a video showing how it works in Shopify please?
The problem is that if we switch our Shopify settings now to their new EU system, we will not be able to revert so would really like to see this in action, even in trial mode. We have requested a demo from your website, that's 2 weeks ago now, but have not received anything yet.

[Dbaca]

You can do a manual upload into our system until the app is ready.

[SMU]

Damon it might be useful to show the thread how to carry out a manual upload as this is what we will need support with once registered. I now have my IOSS number and thanks for your help with this. The next stage is to carry out manual upload into shopify and I am not sure how this is done.

Also the mention of a separate paypal account be set up, can we not extract our EU sales using shopify reports which details the sales and VAT paid and upload this to your platform?

[Dbaca]

We are working on detailed instructions that will be available to our customers by end of day today.

[TimothyCann]

@Dbaca - Can you also confirm when your PayPal onboarding will be happening please? I'm assuming we should not be adding our IOSS number to our shipping documents yet until we have completed the PayPal onboarding?  

[SMU]

We already have a business paypal set up for our store. Will there not be issues in setting up another one with all the same set up info? Can we use our existing business paypal account in some way? Or we can use shopify reports to extract all EU sales which would be simpler.

[Dbaca]

The onboarding is with PayPal. I believe you can use the same account.

[Keith13]

In the Shopify settings if you enable collection taxes for the EU Shopify will apply the country specific VAT in the checkout. So Shopify holds and maintains all the relevant tax rates for all 27 countries.

Is there any way in the theme code / liquid code to access these tax rates? This will mean that we can show customers the relevant tax rate, and the total price including country specific VAT before they go to the checkout.

[Foxxycarr]

Applied for our IOSS number Monday morning via Crossborderit, they submitted details to Swedish authorities, had our number arrive this morning. Incredible service and now no issues for us tomorrow going forward.

Made our announcements to our many thousands of EU customers this afternoon so very very relieved!

[Max1957]

Can I ask if your number came from the Swedish tax authorities or from Crossborderit?  The crossborderit website has absolutely no details that I can find about who they actually are/postal address/company registration etc/etc that you would expect to see from a financial company.

[Matt_Grech]

@Max1957 We looked up Crossborderit on the Swedish business register and they are duly registered with all the details. You can also download annual reports, and other documents. We also wanted some assurance regarding the company listing and it seems popular with investors in Sweden.

[Det742021]

We just got ours today from the, within 2 days, this was really fast.

It came from the Swedish tax agency, see below

Now I have to figure out the following (im an accountant and traded with every country via our business for many years, but now I don't really understand anything:)

So how this threshold will work in Shopify?

1.) we have exemnify because we sell uk, and worldwide and had to show both prices on the site,

I guess now I can remove exehmnify, because they removed the vat at checkout of the country was outside the uk

2.) then how will there threshold work, how do I know what other admin charges we have to pay for couriers?

how does anyone know what duties customer will pay above the threshold, when then goods arrive.. I know that is not related to loss...

I will book some sessions but had no time yet, meanwhile we are shipping on daily basis...DPD already blocked anyone who has no IOSS nu so you cant use them without it

Kind regards,
The Swedish Tax Agency

International Tax Office Stockholm
SE-171 94 SOLNA
Sweden
skatteverket@skatteverket.se
Telephone: +46 8 564 851 60

www.skatteverket.se

[Max1957]

@Det742021 Many thanks. I am going to wait a month before applying to see how this company's solution actually works.  I use Royal Mail Click n Drop for 95% of my orders and UPS for the other 5%.  UPS aren't blocking deliveries if you don't have IOSS number.  Any feedback on how you get on with crossborderit would be gratefully appreciated

[Det742021]

we just set it all up, no issues so far, shopify all set up, working with correct rates

I don't know though how the extra duties will be calculated, ie we have thousands of HS numbers missing because suppliers not giving us any

so we just got an larger order, and not sure what the government will charge in Germany when they get the goods as an extra customs, shopify charged only the German VAT

This is the only part I don't understand..

[Matt_Grech]

@Det742021 You can look up the HS tariff codes here: https://www.gov.uk/trade-tariff. It is quite easy to use and check as long as you know the key term but it also depends how complex your products are. We tend to use the generic code for the products we sell (scale model toys).

[Det742021]

They are really complex, we sell roughly 30|K lines including raw chemicals, papers, art stuff etc, all different codes. The fastest to take out stock and try to mass update all the lines with commodity codes.
Will take ages.

[Matt_Grech]

@Det742021 Shopify has already made the necessary changes for this setup. We received another email on whether we wish to upgrade the EU tax settings on Shopify as they would need your IOSS number. Please note that once you change to the IOSS system on Shopify, you cannot revert back apparently. It should cater for the £135/EUR 150 threshold too, so orders under £135 will have VAT included, orders over £135 will be without VAT.

[Bibico_Admin]

HI Matt

When did you recieve this email? I just checked the backend of shopify and could not see any info on this change.

Thanks

[Matt_Grech]

@Bibico_Admin Hi. This is the email we received yesterday 30 June:

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

[Det742021]

Hi What happens if customers order over the limit, looks like Shopify is taking the VAT over this treshold as well, plus how do I know how much the customs will be, how will the customer pay for that?

[Matt_Grech]

@Det742021 In Shopify, under Settings > Taxes... have you ticked the box "Include or exclude tax based on your customer's country"? Maybe this is why the £135 is not being applied.

Please note that we are not changed our EU Tax settings on Shopify yet, which is why we have not implemented this change as yet.

"

[Det742021]

Yes, but then ALL the VAT is removed, so none of these work
No manual from Shopify, and not one of these work properly, how does anyone expect us to know

[Matt_Grech]

@Det742021 And have you set up the European Union as a separate shipping region - as Shopify have indicated - with each destination country VAT rate? As well as submitted your IOSS reg number to them? If this does not work, you should log on to Shopify Support chat. 

[Det742021]

We have eu set up as separate and we are using shopify on daily basis with 60K customer shipping worldwide, so YES it is obviously set up.
YES we submitted IOSS but Shopify is NOT programmed properly I would really expect an updated manual from shopify, as we are paying for the service!
I don’t want to get Tax investigation and millions of issues as shopify cant handle the changes.
If you tick the box you suggested it will remove the VAT from ALL, which is not what we need.
Everything is set up correctly and shopify should deal with this.
Millions of business owners face the same issues.

[Det742021]

I set it up and tested many countries all working, was really simple, so so far so good 

we also got our first German order but it is over 1.7K so we cant send them with IOSS, need to use another courier, god know who..

will try fedex, but we may fail, or DPD, already freaking our using them and getting some extra hidden fees.

[Foxxycarr]

@Max1957 Swedish tax authorities. When you sign up with Crossborderit their T&C's etc are very comprehensive as is their portal. I had a few doubts to start with but I have none now tbh. They have been very good throughout the whole process.

[Dbaca]

No you sign up with us and have your own IOSS number..
When you ship you can upload a csv file of your shipments, use our API or our Shopify extension (this is in beta)

Then we do the rest, Compliance, Reporting and payment

[frasers]

what does this mean?

List of transport carriers used

Not sure what should I fill in there.

[Dbaca]

This is not required information. Just good to know.

[EUlawgeek]

Clicked something and my reply disappeared. This is what I wanted to say:

Does what is in the TCA about jointly combating VAT fraud equal to a mutual assistance agreement with the EU? If so, do the member states know this?

[SarahFB]

This is my exact concern, integration into Shopify/Royal Mail Click & Drop AND the fees intermediary companies will charge.  I cannot afford or warrant spending into the hundreds for the few EU sales I am processing each month.  It doesn't make it cost effective for me to offer postage to the EU if I'm going to lose a lot more money than I make! I used to get so many more orders before Brexit.  I am going to suspend EU sales for now until the situation is clearer and perhaps the Royal Mail solution has been developed and proved to work.

I don't want EU customers to have to deal with DDU but if it isn't financially viable for me to be IOSS registered it isn't cost effective for me to offer postage to the EU at the moment.

I have looked into Crossborderit as well and this does seem another interesting potential solution, but absolutely nothing is clear!