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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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.