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.
@Bibico_Admin Hi. This is the email we received yesterday 30 June:
As of July 1st, 2021, the European Union (EU) is making changes to tax regulations for eCommerce purchases made within the EU. These changes include the elimination of minimum sales thresholds, updated value-added tax (VAT) rates, and a choice of how to remit taxes. We’ve added options to the tax settings in Shopify to help you comply with these changes.
It’s important that you take the time to understand how these changes impact your business and update your tax settings in Shopify before July 1st. You can find more information on the EU’s One Stop Shop VAT site and in our recent blog article on the topic, but we recommend consulting a tax professional to learn what is right for your business.
Tip: Based on our records, you currently ship products to the EU from countries outside of that region. When buyers in the EU purchase from your store, they will be required to pay VAT and/or duties upon delivery. You can choose to charge VAT on orders up to €150 to simplify the buying and shipping experience on those orders. To do this, you’ll need to provide us with your Import One Stop Shop VAT number which will enable you to submit a single VAT remittance for all of the EU. Update your tax settings in Shopify based on the choice that makes the most sense for your business.
So, we received a letter (pdf) from the Swedish tax authorities showing us an iOS number. We haven’t received any “Paypal onboarding” though. What next??
You should receive uploading instructions and can start to use your IOSS. We are working on some changes made by the payment provider and will have payment info soon. We have a little time with that so as long as you ship and upload you will be fine.
Goods are low value where they are in consignments with an intrinsic value not exceeding £135 (€150). Two new IT systems will be introduced – one for the collection of VAT on imports of low value consignments and the other for the collection of VAT on intra-EU Business to Consumer (B2C) transactions of goods. Both systems are designed to reduce administrative burdens on business and to facilitate the collection of VAT across the EU. Implementation of the EU’s e-commerce package is in accordance with the UK obligations under the Northern Ireland Protocol.
So there may be hope yet with registering for IOSS thru HMRC…
we just set it all up, no issues so far, shopify all set up, working with correct rates
I don’t know though how the extra duties will be calculated, ie we have thousands of HS numbers missing because suppliers not giving us any
so we just got an larger order, and not sure what the government will charge in Germany when they get the goods as an extra customs, shopify charged only the German VAT
@Det742021 You can look up the HS tariff codes here: https://www.gov.uk/trade-tariff. It is quite easy to use and check as long as you know the key term but it also depends how complex your products are. We tend to use the generic code for the products we sell (scale model toys).
They are really complex, we sell roughly 30|K lines including raw chemicals, papers, art stuff etc, all different codes. The fastest to take out stock and try to mass update all the lines with commodity codes.
Will take ages.
Hi What happens if customers order over the limit, looks like Shopify is taking the VAT over this treshold as well, plus how do I know how much the customs will be, how will the customer pay for that?
@Det742021 In Shopify, under Settings > Taxes… have you ticked the box “Include or exclude tax based on your customer’s country”? Maybe this is why the £135 is not being applied.
Please note that we are not changed our EU Tax settings on Shopify yet, which is why we have not implemented this change as yet.
Yes, but then ALL the VAT is removed, so none of these work
No manual from Shopify, and not one of these work properly, how does anyone expect us to know
@Det742021 And have you set up the European Union as a separate shipping region - as Shopify have indicated - with each destination country VAT rate? As well as submitted your IOSS reg number to them? If this does not work, you should log on to Shopify Support chat.
We have eu set up as separate and we are using shopify on daily basis with 60K customer shipping worldwide, so YES it is obviously set up.
YES we submitted IOSS but Shopify is NOT programmed properly I would really expect an updated manual from shopify, as we are paying for the service!
I don’t want to get Tax investigation and millions of issues as shopify cant handle the changes.
If you tick the box you suggested it will remove the VAT from ALL, which is not what we need.
Everything is set up correctly and shopify should deal with this.
Millions of business owners face the same issues.
how long it will take in general to receive the code? I applied on 27th but it still says “We have recieved your request for an IOSS number and are working to get it ready for you as soon as possible. You will be notified when it’s available.”
You have to use an intermediary within the EU, we got ours in a day from Crossborder IT, you can find their details above in the same thread,
They are in Sweden, but they will deal with this for you
