According to the source posted below, we are not REQUIRED to collect EU Taxes, it is more of a courtesy so our customers do not have to pay them themselves (like they always did). Since we are based in the USA with no stock stored in the EU, we have chosen not to register, our customers are used to paying the taxes, they know that and it is indicated at checkout on our website:
“It is optional but when a company is IOSS registered it must comply with IOSS rules. IOSS will enable non-EU sellers to register in just one EU Member State to centralize their VAT declaration and payments for all EU-bound shipments. If you decide not to declare the VAT centrally, the Member State of consumption (the destination country in the EU) will become responsible for collecting VAT on the goods. If you are not registered for the IOSS scheme and are not using any customs prepaid solutions, any import tax and customs duties in the EU country of destination will be charged to the EU shopper upon delivery of the goods. This would considerably impact the shopping experience for your customers based in the EU. For businesses outside of the EU, it is advisable to register under IOSS and appointing an EU-established intermediary to fulfil their VAT obligations under the IOSS scheme, unless the seller’s country has signed the VAT mutual assistance agreement with the EU (only Norway at the time of writing).”
My source is: Asendia, they won´t let me post the link here, but will post a screenshot.
I agree totally. I am a small business based in the U.K. that sells physical product worldwide with orders ranging from a few £/Euro to a few hundred £/€. This is one of the reasons that I started this whole discussion. Despite having researched widely, One thing that I understood for the first time yesterday is that the U.K. DOES NOT have a mutual assistance agreement with the EU and therefore U.K. sellers must use an intermediary. This really complicates things for Shopify sellers. I use Royal Mail Click n Drop for postal service and the Shopify to Click n Drop integration is key to my business. How all of this is going to work in an IOSS scenario is a mystery to me. The Royal Mail advice is dubious, but alludes to future solutions. If anyone can shed any light on this please do.
I’m in exactly the same boat, selling similar values and using Royal Mail Click & Drop. I’ll keep waiting to hear more. I may have to temporarily stop EU sales or send DDU.
I’m a sole trader, not registered for VAT in the UK as in nowhere near the threshold and I’m unsure accessing the IOSS means I’d have to register for VAT here too.
I recently found this company who allow you to use their ioss number which means you don’t have to register yourself and pay high reg fees. They charge per packet like taxamo but seem cheaper and the customer service is much more responsive.
I have not tested them out yet as I am still waiting to see if there are any last minute changes but they maybe a good low option to start with. If new options appear in the coming months at least you have not invested alot of money upfront.
Thanks, that looks interesting for sure. Like you I am holding off signing up to anything in case anything is made clearer/easier for those of us in the UK. It would be so much easier if we were permitted to access IOSS without using an intermediary.
Thanks for your input. I just don’t know what to do for the best right now, except suspend shipping orders to the EU until I’ve found the best solution for my business.
I’m a sole-trader, there is no way I send more than 60 parcels a month to the EU. This year to date I have only sent about 50 to the EU. Last year I sent 150 in total. In the run up to Brexit I had a lot more orders from the EU. My main custom is from UK, USA, Canada and Australia with Germany being the most consistent country sold to in the EU by a mile.
I am not familiar with dealing with VAT returns as I’m not VAT registered in the UK, my turnover is nowhere near enough and I can’t find reference anywhere to whether a non-UK VAT registered business will have to register for UK VAT to submit EU taxes??! I don’t want to risk sending parcels DDU as I am sure it will be a shocking experience for the customer with long delays and not knowing what the local postal service handling fee will be. In the UK it’s £8 but I have heard some horror stories about huge fees for handling parcels in the EU.
I send all my parcels via Royal Mail Click and Drop, printing my own postage and customs labels. Royal Mail are working on a DDP scheme but it’s still under trial and won’t be ready before the deadline of 1st July and I imagine it will be expensive. I used to sell wholesale to some EU countries, mainly Germany, so I will have to use DDP for those wholesale orders above 150 Euro.
Hi all, newbie here in the same boat as most of you.
One question I have before I rush out and sign up for anything in EU would be does the UK Limited Liability status for your company (if you are Ltd) stay in place legally if signing up in an EU country or do you all of a sudden become personally liable?
I concur. I am surprised so many companies are saying that you need an intermediary. Sometimes against extraordinary prices. I wonder if they can prove that. The EU site says that third country sellers “normally” need an intermediary. My interpretation is that a UK business can register individually in any EU country. This is because in the EU-UK Trade and Cooperation Agreement (TCA) there is a clause that EU and UK will cooperate in VAT fraud matters. There is another EU legal document that says that biz from third countries that have an agreement with the EU to cooperate on VAT fraud will not have to use an intermediary. Bear with me, I am building this legal case. In the meantime, I am happy to know where all those that advocate intermediary services got this from.
This is interesting. I would like to hear more from people with experience with the IOSS registration process. My interpretation of the law is that this should be possible but the practice might be different. At the moment and intermediary seems to be the most risk-free option, but if not strictly necessary, businesses can save costs.
I am curious to know this too. I cannot see how to integrate Taxamo in Shopify?..can it? It states it will integrate Magento from 1st July, but does not mention Shopify?
Our EU sales just dropped off the moment Brexit kicked in on 1st january. Until then, we sold more units into the EU than anywhere else. Now we only do about 4 sales a week into the EU, but we are desperate to get them back, so feel we need to be IOSS registered. At this point everyone, including our accountant is truly confused by it all!
I echo all your points. Having had my IOSS registration rejected by the Ireland authorities on the basis that the UK doesnt have a mutual assistance agreement with the EU, I am at a loss as to what to do. My accountant is likewise unclear about it all, having done extensive research it seems that confusion reigns…
I think I will start with taxamo or these guys https://www.crossborderit.com/ioss first, if later we can reg for ioss in the UK we can change and have not paid big ioss regisitration fees (which most ioss intermediaies are charging.)
I appreciate all the discussion and helpful suggestions posted on this board, and I notice that most of you seem to be in the UK. I’m wondering if there are any participants who sell from the US, as do I? Our issues and solutions are slightly different (the commercial intermediaries suggested seem to only be able to work with UK based sellers) and I’m interested in learning what others (US) have discovered. Also, I’m a very small company and I have few sales to the EU and even fewer of less than €185. Anyone else dealing with a similar situation?
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!
Yes, I am hoping the Royal Mail PDDP as an alternative to IOSS registration may work for me. Their Click & Drop service already integrates with Shopify and I can set the taxes to be charged at the correct rate for each EU country through Shopify so on checkout (having factored in the extra Royal Mail charges into my EU postal rate) the correct amounts should have been paid and can then be paid onwards using the PDDP service. Well, here’s hoping that’s how it will work!!!
I am not sure if you get customer order returns but the benefit with the ioss return is that we can reverse any vat we paid when we recieve a refund. I am not sure if we will be able to do this with the Royal Mail PDDP.
I believe with there solution once the vat has been paid you won’t be able to recover this in the event of a return.
Luckily, I don’t think I’ve had one return in twelve years of trading, only a few undelivered orders due to incorrect address. So this wouldn’t be a deal breaker for me, I’m not VAT registered in the UK and I’m still unclear if I will have to be to charge EU VAT whether it’s via IOSS or whichever service.
