@Dbaca We have a fair few shipments now that need uploading, from July 1st onwards, but I am very hesitant to do this until we know exactly what we need to show. Getting a little close to the wire as this needs to be done by this time next week at the worst. Any final advice would be most welcome at this point.
Hi Damon, Iām really trying to be patient as I do appreciate this IOSS system is new to everyone, but this is a pure politician answer, it addresses nothing, itās just playing for extra time. Weāre not debating whether a uni-state VAT collection method is a good idea. Weāre asking how to submit to your system in the correct manner so our customers wonāt get fees because we didnāt include all the required information and payment.
We didnāt create an IOSS intermediary service, your business did this - it chose to make itself in this area and to accept payment for providing that service.
Your clients rely on your business to provide 1) a clearly understandable service, that is 2) compliant with the requirements of the authorities you are dealing with. Thereās been a lot of feedback so far, from more than one forum, that your service is confusing due to the lack of documentation, and now we have this second (potential) issue over the shipping VAT.
Based on what has been mentioned here (and also considering that Amazon and Shopify are both charging VAT on the shipping cost, which is how it always was pre-IOSS), it does look like your business (may) have made an error. Like someone else has said, if youāve made a mistake, please do own it so we can move on from this without penalties being applied. If you donāt know if your business has made a mistake, or you believe your service is correctly compliant, please mention this. Anything is more useful than the reply youāve just given.
If an error has been made here, then I ask you to please note that your current upload document only has a field for the sales amount and the VAT amount. In that EU document, it advises that the product sales amount and the shipping amount should be separated so that the product intrinsic value is correct. Does that mean you would need to add a new column(s) to your upload file, relating to the shipping cost and the shipping VAT?
If you have business insurance to cover claims from your clients if your system turns out to be incorrect, please let me know and Iāll proceed to upload the data in the form requested (just the product sale amount, no shipping cost or shipping VAT). I assume weāve probably signed away our rights to compensation in the legal agreement, however?
I would also like to mention that a few days ago I requested if you could elaborate regarding the need to submit uploads to you daily. You said it was something to do with the clearance - can you provide more detail, please? Itās a very manual process to retrieve the data for these uploads so the upload frequency makes a big difference. Someone else mentioned here that they thought IOSS is only a monthly reporting thing. Iāve uploaded nothing so far because Iām still waiting for this situation to play out. It sounds like Iām far from the only business here that is waiting before they do their first upload.
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Until Dbaca returns from reading the VAT Directive, we can at least go back to the source ourselves.
The directives (link1)(link2) and regs (link) that form the new VAT e-commerce rules amend the VAT Directive (link). The Taxable Amount (link) (articles 72-89 of the VAT Directive) has not been amended.
So VAT must be collected on shipping costs that the customer pays. IOSS consignments are no different to any other consignment in this regard.
Notes on how to determine the intrinsic value (which is a different thing, Dbaca) can be found on page 68 here: link
Firstly I will say that the template is clear on what we need for the upload. We also have a shopify app that will allow you to avoid this step and we will roll it out early next week.
āIf an error has been made here, then I ask you to please note that your current upload document only has a field for the sales amount and the VAT amount. In that EU document, it advises that the product sales amount and the shipping amount should be separated so that the product intrinsic value is correct. Does that mean you would need to add a new column(s) to your upload file, relating to the shipping cost and the shipping VAT?ā
@AnyDevil I donāt think thereās any need to separate a sale into goods and shipping for a VAT return, or for supplying that info to an intermediary filing that VAT return. The separation necessary for intrinsic value will be explicit in the electronic data that goes with the postal consignment.
Though maybe @Dbaca could answer your direct question directly.
Thanks very much for clarifying. Now to wait for Dbaca to acknowledge your previous messageā¦and half of what I wrote in my message.
I am confused.. What do you need clarification about? Get. s hold of me directly and we can have a call. damon@crossborderit.com. I will give you my number and we can talk.
Please contact me directly. I know the answer hear but I am getting trolled . Please if you are my customer I will answer. Contact me at damon@crossborderiit.com and we will get a call together.
Is it trolling to point out a pretty egregious error made by a representative of an intermediary - and therefore someone in a position of perceived authority on the matter? Perhaps I went too far in asking you to correct yourself, but given your position as the representative of an intermediary I had thought providing accurate advice to your clients and others might be a good idea.
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I stand by my statement that the VAT is levied on the cost of the goods.
I have been in international trade for the last 15 years and I have taught international trade and Supply Chain for ten years. All of these rules are interpretive. If you find a rule in a countries tariff it can at some point be interpreted differently even if you have shipped fine with that method many times. The only way around this is to have customs authorities file a ruling which applies just for your company. Because of the interpretive nature of trade rules and the fact that the IOSS is new I will not make an absolute statement.
I want you to keep in mind that my company is liable for making sure that these fees are levied correctly. I would be very safe If everyone paid on shipping as well. The tax authorities will absolutely accept this higher sum.
In order to determine the meaning of the legislation we spoke to the tax authorities , Customs and our independent tax firm. Each of them agreed that the VAT is levied on the cost of the goods without shipping however there are caveats that you see in the legislation if shipping is bundled with the price. They will except payment on the bundled shipping. I have asked the authorities and counsel.
I will not make an absolute statement I can only go on what the authorities have told me. If the interpretation changes I will let everyone know. You are also free to go to your lawyer or reach out to an EU tax authority, or any other resource that you have.
I appreciate your focus on this but I cannot keep defending this. The opinions are not mine and I did not come up with it out of thin air. I realize that this frustrates you because your interpretation is different but please understand that we are in constant contact with the authorities and we get other opinions as well. I can only do my due diligence. I am also not an anonymous person on this board and I will not make a binding legal pronouncement. Please everyone I am not an attorney and I am not making legal claims
Please feel free to check with customs, Tax authorities and any legal counsel. We can all just do our homework. This is all that we could do to clarify this issue. I have done due diligence on my side.
One way or another we submit filings next week. If someone from Brussels or any of the other member states have interpreted this differently we will know immediately. I will also communicate it immediately. This will not be egg on my face as I am not the one interpreting this. I have tens of thousands of shipments we are facilitating and it is in my best interest to get this right as well.
If you want to express your frustrations with this opinion I am happy to have a call with you.
I meanā¦ you kinda did make an absolute statement:
The IOSS rules are different than the VAT rules and does not require you to collect VAT on shipping. I have a Swedish document that states that but I am going to translate it and get it on the forum.
And to back that up you quoted a section of a document - a section dealing with intrinsic value, not taxable amount. And ignored the implication that VAT is due on shipping on pages 19 and 20 of that document, an implication shared on page 68 of the Explanatory Notes. And that transport and insurance costs are included in the customs declaration for IOSS consignments and are to be transmitted to the gloriously named Surveillance, from which VAT due and VAT paid is cross checked. Not to mention the VAT Directive.
Fair enough. Seems a bold move, given whatās in the VAT Directive and that document you quoted. And given what everyone else is doing. But youāve got your advice, so fair enough.
Hello. We have been trying to figure out the website to register for an IOSS number and we are still coming up empty handed. There are a lot of these websites that are attempting to hold our hands through this whole process of registering and overcharge for it, but why do we need them? All we need the actual website to register, no?
It appears the VAT functionality is now live via tax settings in the shopify selling profile.
We are losing a lot of business because we canāt ship to EU anymore.
Where are the clear answers? Why is there no tutorial or assistance through this process from Shopify? Can someone help?
Even if you do enter the IOSS number their systems are not working with it. Our store currency is in USD and Shopifys system is confusing that with the Euro amount
Eg sale is $160 and less than the 150 Euros so tax should be added on at checkout
but it isnt as it thinks the $ amount is the Euro amount
Been trying to get this sorted with them for over 3 weeks now and will soon be involving our legal teams if it doesnt get sorted soon
Our Shopify APP is ready. I will upload all the data without needing to do it manually.
You will need to have your IOSS number from us. Then E-mail support@crossborderit.com with your Shopify Domain and we will build you a private link.
In a few weeks when the public APP is working you will need to switch from the private app to the public one which will have more functionality.
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@Dbaca just emailed you guys, need that link asap, please.
@Dbaca what is your solution? Iād like to review.
We are working on creating them.
I donāt know whether I should claim VAT excluded. Should I let the customers pay VAT upon the delivery?
What do you guys think?
I emailed your business on Friday 10am UK time asking about the Shopify app link. On Monday you sent two emails from your own address, urging your customers to hurry up with their submissions and to reply to you if needed. I replied Monday evening saying I am waiting for your general support email to respond. What is the current response timescale, please?
You mentioned in your email that you need these reports daily. Iāve asked on this thread on more than one occasion if you can please explain the daily requirement in more detail so we all can understand better, because these reports appear to be submitted monthly. It is incredibly manual to make these uploads (before there is access to your app), so itās much easier to make them once or a few times a month instead of daily. I last asked about this here in a long message, to which you gave a very short reply that didnāt acknowledge most of what Iād queried.
Regarding the ongoing debate here of whether VAT should be applied to the shipping charge and submitted via IOSS, or not, please see the EU IOSS bible that has previously been linked here.
On page 68-69 it mentions this (screenshot): āVAT is applied on the total value of the saleā¦the goods and the transport chargesā, which appears to state that the VAT is applicable on the shipping charge. Youāve mentioned before that Amazon and Shopify are getting it wrong by applying VAT on the transport charge. This suggests to me that they are handling it correctly, which would mean that Crossborderit isnāt - can you please advise?
We have submitted our app to Shopify. They expect that it will take five business days but that will get rid of this manual step at least for Shopify users. We quit sending the private app when Shopify expedited the approval for the Public app.
We are not just reporting VAT, We are working with clearance agents not all of them but some as this is the core of our main business. So we need to know what is in the system as soon as possible. I realize this is a challenge when folks are manual but it works automatically if you have the app. We will have other extensions shortly.
We do not like the manual aspect of the uploads either as they are challenging for us as well.