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

Shopify Discussion

Topic summary

UK and non-EU e-commerce sellers face challenges implementing the EU’s new IOSS (Import One-Stop Shop) tax regime, effective July 1, 2021. The system requires charging destination country VAT rates on sales under €150, while sales above this threshold remain VAT-free until delivery.

Key Technical Issues:

  • Shopify’s native functionality initially lacked proper €150 threshold implementation
  • VAT must be applied only to orders under €150, but early implementations charged VAT on all orders or none
  • Configuration requires adding IOSS number under Settings > Tax > EU > “Shipping to the EU” section (not within EU section)
  • Debate exists whether shipping costs should include VAT in IOSS submissions

Registration Challenges:

  • UK sellers cannot register directly with EU tax authorities due to lack of mutual assistance agreement
  • Must use EU-based intermediaries (CrossBorderIT, Taxamo, EasyProject mentioned)
  • Ireland rejected some UK applications; Sweden appears more accessible
  • Registration fees and per-transaction costs vary significantly

Intermediary Solutions:

  • CrossBorderIT offers IOSS number provision and Shopify app integration
  • Concerns raised about their support responsiveness and unclear documentation
  • Daily/weekly reporting requirements create manual workload
  • Payment processing fees and multiple invoices increase costs

Current Status:

  • Shopify eventually released IOSS functionality (April 2021)
  • Royal Mail exploring DDP (Delivered Duty Paid) alternatives
  • Some sellers avoiding IOSS registration, letting customers pay import fees
  • EasyProject/Avalara mentioned as working solutions with automatic threshold handling
Summarized with AI on November 15. AI used: claude-sonnet-4-5-20250929.
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@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.