How will international VAT/GST charges affect my new ecommerce store?

Shopify Discussion
1

Hello everyone,

I’m starting ecommerce store based in USA next month. I am having trouble understanding about VAT/IOSS/GST charges on international orders.

For Canada, they stated I am considered small supplier and so I don’t need to register for GST which means I cant charge Canada customers GST. But will that be a problem during customs? Will their shipments get delayed or something?
Same thing for VAT charges for UK and EU, since I am small supplier and my revenue won’t exceed the amount they stated for me to register for VAT, will customers shipment be delayed since I wont be able to charge VAT chargers on their orders without VAT registration?

Hope someone can assist me on this matter. Any suggestions will be greatly appreciated.

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Hi Baemaya,

It does not look like Canada has a similar solution in place with UK VAT and EU IOSS for low value consignments. https://www.wto.org/english/tratop_e/msmes_e/canada_sept21_e.pdf

It means you should arrange for a Delivery Duty Paid (DDP) solution with your logistics partner.

EU and UK do not have VAT thresholds for distance selling, VAT is ALWAYS due. So you should register for the applicable programs in order to provide cost-efficient, good customer experience. For UK the registration is straight forward, just go to https://www.gov.uk/register-for-vat/how-register-for-vat

If you are unsure, you can find instructions for the registration here: https://help.easproject.com/hc/en-us/articles/6514404249757-UK-VAT-registration

Mind you, it can take up to 8 weeks…

Registration for IOSS cannot be done by a non-EU company so you will need an Intermediary who will be jointly responsible for the VAT issues. To make it simple, just register with EAS at https://easproject.com/reg

And we can take it from there. Could not be simpler. Once onboarded we handle both UK and EU for you. And you can focus on sales.

See you soon!

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Thank you so much for taking the time to respond to my questions. It was super helpful. I have begin applying for UK vat.

I have questions about EU vat. Do I need to register for Vat number from all the 27 EU countries individually? Or Uk vat number is enough?
For EU IOSS, do I need just UK vat number for register to sell all EU countries?
Can you care to explain IOSS?
Also after i apply for Uk vat number? Should i just go ahead and apply for IOSS registration or wait for the vat number to be received first?
Hope to hear from you!

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You are very welcome Baemaya!

EU VAT registrations are not required anymore, lucky you. UK VAT number does not really do anything in EU after Brexit. You will need a VAT registration in EU if you decide to warehouse goods in EU. Not before that.

Both EU IOSS and UK VAT registrations allow you to ship Low Value Consignments (LVC) with simplified customs process and collect VAT at checkout (no duties for such products). The thresholds are 135£ and 150€ for the products (0% tax and without shipping costs).

You cannot register for IOSS yourself like UK VAT. But not to worry, we handle it for you. You will need a solution for calculation and reporting in any case for UK and EU and I dare say we have the best solution available. to get started: www.easproject.com/reg.

For a crash course on VAT have a look at blogs and help desk on our site www.easproject.com

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Wow, you just made everything clear for me. I was able to apply for Vat registration last night.
After I do IOSS registration, will I instantly be able to sell to all EU states ?

I will look into the website you linked for EU IOSS registration. The website has so many helpful information. thank you so much!

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