On the 1st July the EU introduces a new tax regime for UK e-commerce distance sellers selling into the EU. For sales under Euro 150, e-commerce sellers can opt to charge destination country VAT rates to speed up delivery. For sales above Euro 150, sales will continue to be VAT free with the customer having to pay VAT / charges when the package arrives in the destination country. Will Shopify be implementing this threshold so that VAT is included/excluded automatically, or will sellers have to process refunds above Euro 150 or use an external app? Any help on this would be appreciated..
Has anyone implemented Taxamo with Shopify yet? We only have a small number of EU orders at the moment so this would be ideal for us.
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:
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.
There are a lot of IOSS pay-as-you-go businesses like this springing up. Don't forget that IOSS is not compulsory. You can still send DDP, but it is expensive, and likely to become more expensive. Using a Pay-as-you-go IOSS system at £2 a piece means that IOSS (using an EU intermediary) will be cheaper if you are sending (roughly) over 60 pieces a month. Hope that helps!
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.
If you try and register for IOSS in an EU state as a UK company you can't get passed 1st stage registration. I haven't heard of a UK company successfully registering for IOSS without instructing an EU Intermediary. It would be be great to know if this changes, but for now instructing an EU based Intermediary has been the only way for a UK company to get an IOSS ID number. We have been successfully helping our customers by referring them to EU Intermediaries we identified to get them set up on the IOSS scheme. We also took a conscious decision to help anyone else that is confused, needs IOSS help, and an EU Intermediary to get them started, so let us know. For more info and to get in touch click here.
Hope that helps! 👍
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!
For now, it makes sense to bite the bullet and instruct an EU Intermediary to get you set up with an IOSS ID and EU VAT number. You'll need to get your skates on if you're going to do this before 1st July. If the rules change and IOSS ID registration etc & monthly EU VAT returns is opened up to UK companies directly (not via EU based intermediary) who's to say that you can't terminate your EU intermediary contract if you make this potential outcome a clause from the outset. For the sake of a few hundred Euros to get set up now, you'll have an EU VAT and IOSS ID, and this may be cheaper than risking lost sales, or increased freight charges by not being on the IOSS scheme.
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...
But how, with whatever we do, do we set up the IOSS into Shopify? Taxamo has no app for this?. SamosEcommerce, how would yours integrate?
I agree its a nightmare I I think the situation will be changing daily.
I see Royal Mail testing a solution that could avoid ioss registration but work in the same way > https://www.royalmail.com/import-one-stop-shop-ioss
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?
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