EU IOSS Signup

[TKJ-London]

Of course, IOSS is not mandatory, but it allows for a much smoother experience for EU customers. So most businesses sending to the EU will want to register - but not if a fiscal rep is required, which is the main issue here.

Hello all, I'm just joining this discussion as I've been researching how to register for IOSS as well.

I understand that IOSS registration is not mandatory until you reach a distance selling threshold of £8800 of goods sold to ALL EU countries combined. I will register in any case as I don't want my customers to bear the burden of paying VAT and customs handling/ admin charges on receipt (those charges are obscene and seem completely arbitrary). So I'd rather charge the EU VAT rate through my online shop and remit to EU - otherwise I expect to lose all my EU business.

Regarding zero-rated VAT for exports - that's just the government trying to trick you! All it means is you pay no VAT for your goods to *leave* the UK. It has no bearing on what VAT is charged in the receiving country. It's that simple, but the language used makes you think you're sending for free!!

Also I believe there is a clear reason why we are not able to register for IOSS right now, and that's because EU countries (and probably UK too) are simply not prepared to implement it. I expect the changes due on 1st July will be postponed until 2022. See this article which explains my reasoning (Sorry, as a new user I can't post the link): on the Avalara website article headline "Germany to miss postal operators IOSS July 2021 launch"

So we languish for longer in limbo... Thanks for having this discussion as it's the only place I've encountered such diligent people actually trying to move forward with IOSS - likely because most small businesses, at least, are completely unaware of upcoming changes to the low value threshold.

 

[Enz.87]

Hello all, I'm just joining this discussion as I've been researching how to register for IOSS as well.

I understand that IOSS registration is not mandatory until you reach a distance selling threshold of £8800 of goods sold to ALL EU countries combined. I will register in any case as I don't want my customers to bear the burden of paying VAT and customs handling/ admin charges on receipt (those charges are obscene and seem completely arbitrary). So I'd rather charge the EU VAT rate through my online shop and remit to EU - otherwise I expect to lose all my EU business.

Regarding zero-rated VAT for exports - that's just the government trying to trick you! All it means is you pay no VAT for your goods to *leave* the UK. It has no bearing on what VAT is charged in the receiving country. It's that simple, but the language used makes you think you're sending for free!!

Also I believe there is a clear reason why we are not able to register for IOSS right now, and that's because EU countries (and probably UK too) are simply not prepared to implement it. I expect the changes due on 1st July will be postponed until 2022. See this article which explains my reasoning (Sorry, as a new user I can't post the link): on the Avalara website article headline "Germany to miss postal operators IOSS July 2021 launch"

So we languish for longer in limbo... Thanks for having this discussion as it's the only place I've encountered such diligent people actually trying to move forward with IOSS - likely because most small businesses, at least, are completely unaware of upcoming changes to the low value threshold.

We can’t work like that. We have huge amount of money we would like to invest but with this kind of instability it’s real hard to take decisions...

 

[TKJ-London]

We can’t work like that. We have huge amount of money we would like to invest but with this kind of instability it’s real hard to take decisions...

Indeed, try writing to your MP?

 

[JPMiddleton]

Also I believe there is a clear reason why we are not able to register for IOSS right now, and that's because EU countries (and probably UK too) are simply not prepared to implement it. I expect the changes due on 1st July will be postponed until 2022. See this article which explains my reasoning (Sorry, as a new user I can't post the link): on the Avalara website article headline "Germany to miss postal operators IOSS July 2021 launch"

That article has been live for some time, I don't think it's going to get delayed to be honest - Amazon, eBay and Etsy have all sent info' regarding VAT collection on their marketplaces and DHL are "ready" in that they have the IOSS field on their own MyDHL platform. Our DHL account manager is confident that it is going ahead on July 1st.

 

[Morning]

I understand that IOSS registration is not mandatory until you reach a distance selling threshold of £8800 of goods sold to ALL EU countries combined.

I think you're confusing the OSS registration rules with the IOSS registration rules. There's no threshold for IOSS registration, but it is entirely optional (albeit desirable for our EU customers).

If anyone can get to grips with the Zero rating and explain it like I'm 5 that would be appreciated!

You've said you're not UK VAT registered, so you don't need to worry about it.

If you were UK VAT registered, you would charge your UK customers 20% VAT, and remit that to HMRC, but you would not charge your customers in other countries - your sales for export would be 'zero rated'.

But since you're not UK VAT registered, you don't collect any VAT so can't zero rate anything, so don't worry about it.

However, I was only pointing out that if the Irish Revenue Commissioners are misadvising people about the rules of applying for OSS and IOSS (in this case, stating it's mandatory when it's not)

I don't think they did. The only 'must' in the email is with regards to the requirement to appoint an intermediary if a business chooses to register with the IOSS.



We do all need to be writing to our MPs though. The UK Gov has, as yet, failed to ensure direct registration access to the IOSS, despite the EU-UK trade agreement including a mutual assistance agreement on VAT. If this is because the MAA is yet to be finalised, or if it is of lesser scope, is unknown, but we need to know if and when things might change.

At the same time, UK Gov has effectively opened the UK market to foreign e-commerce sellers who fail to register for UK VAT as required - Royal Mail no longer collects, nor checks for, unpaid VAT on consignments under £135. And without an MAA with every country in the world, how is HMRC going to recover unpaid VAT from foreign sellers?

The contrast between the forthcoming EU VAT scheme and the UK VAT system in place since January is stark.

The voluntary EU scheme will limit those who choose to register (either direct from a country with an MAA or through an intermediary), but member states then have a mechanism to recover unpaid VAT. If the IOSS is not used, EU VAT will be collected on import from the buyer. Either way, EU member states get their VAT.

The UK demands all foreign sellers who sell to a UK consumer to register for UK VAT, but has no means of enforcing that, nor for recovering unpaid VAT, and to top it off does not collect unpaid UK VAT on low value consignments at the border.

 

[nick34785]

We ship from Northern Ireland which is inside the EU VAT area, and shipments arrive directly to EU customer without any customs. We currently charge UK VAT. Has there been any update to how IOSS will impact businesses in Northern Ireland?

 

[Morning]

HMRC published guidance recently. Can’t link to it because I haven't posted enough, but you should find it by googling 'OSS HMRC'.

 

[nick34785]

HMRC published guidance recently. Can’t link to it because I haven't posted enough, but you should find it by googling 'OSS HMRC'.

Thank you! I found it now, published the 13th. Great that we can do this through HMRC and not having to register in another EU country.
I wonder if the new 10,000 EUR threshold will start from july 1st, or cover the last 12 months, or current year.

 

[Simon Perkins]

You can register for an EU VAT number and IOSS ID yourself, but you will have to appoint an intermediary based in the EU to manage your EU VAT obligations and do the monthly EU VAT return.

 

[ADC]

You can register for an EU VAT number and IOSS ID yourself, but you will have to appoint an intermediary based in the EU to manage your EU VAT obligations and do the monthly EU VAT return.

Why? when the EU trade agreement says we have a mutual agreement for the collection of VAT?

 

[ADC]

Why? when the EU trade agreement says we have a mutual agreement for the collection of VAT?

Here is the detailed info from EU website about IOSS.

https://ec.europa.eu/taxation_customs/sites/taxation/files/oss_guidelines_en.pdf

Look at page 11:-

So if a country has a Mutual Assistance agreement for the recovery of VAT, there is no need for a fiscal representative.

Here is the EU-UK trade agreement signed off by the EU commission last week:-

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22020A1231(01)&from=EN

If you look at page 1091 it shows UK have signed a mutual assistance agreement for recovery of VAT

 

[Morning]

Why? when the EU trade agreement says we have a mutual agreement for the collection of VAT?

Information from the Irish Revenue OSS desk suggests the MAA may not be complete yet. Or it may not be of adequate scope compared to the agreements on VAT assistance between EU countries, and between the EU and Norway. Either way, we need to be writing to our MPs, and to Liz Truss, asking if and when an MAA will be completed to allow us direct access to the IOSS.

 

[ADC]

Information from the Irish Revenue OSS desk suggests the MAA may not be complete yet. Or it may not be of adequate scope compared to the agreements on VAT assistance between EU countries, and between the EU and Norway. Either way, we need to be writing to our MPs, and to Liz Truss, asking if and when an MAA will be completed to allow us direct access to the IOSS.

Already done it. Got no response as yet.

 

[Morning]

Already done it. Got no response as yet.

Me neither! But I'll keep sending them until I do.

 

[JPMiddleton]

The HMRC page about IOSS seems to have been updated, and seems to suggest that whilst it won’t be ready by July 1st - there WILL be a way for UK businesses to register directly.

https://www.gov.uk/government/publications/eu-e-commerce-package/eu-vat-e-commerce-package

A business not established in the EU or Northern Ireland wishing to register for IOSS will be able to do so in any EU member state or in the UK.

However, it is not expected that the UK IOSSregistration portal will be available for use for the 1 July 2021 launch. Further guidance on this will be made available before 1 July 2021.

 

[JPMiddleton]

Me neither! But I'll keep sending them until I do.

I got a response from our local MP's office (Andrea Jenkins) that she's going to bring it up today with the relevant ministers.

 

[schmexit]

I got a response from our local MP's office (Andrea Jenkins) that she's going to bring it up today with the relevant ministers.

Well done! I will be talking to my MP this week to ask her to bring this up as well.

 

[DefinitelyMaybeUK]

I see the Royal Mail have updated details of their proposed DDP offerings, see:
https://www.royalmail.com/business/international/guide/delivered-duties-paid
These include 'full' IOSS with Deloitte from £2000 a year, 'PAYG' with Taxamo at £2 a parcel and their own DDP (non-IOSS) solution which allows parcels over €150 as well, but details not yet announced.

Their DDP solution looks interesting if priced right, as the IOSS €150 is quite a low threshold depending on what you sell. The Taxamo offering requires using their 'plugin' at your checkout, again details are vague at this point in time.

 

[ADC]

What i don't understand about this IOSS thing is that it doesn't seem a very secure system. What stops someone using the IOSS number from one of the big marketplace's on their own website orders? Seems open to abuse to me.

 

[schmexit]

I contacted the EU's Europe Direct Contact Centre, and here's their response. WHAT DOES IT MEAN?

Thank you for contacting the Europe Direct Contact Centre.

Art. 204 of the VAT Directive states:

"1. Where, pursuant to Articles 193 to 197 and Articles 199 and 200, the person liable for payment of VAT is a taxable person who is not established in the Member State in which the VAT is due, Member States may allow that person to appoint a tax representative as the person liable for payment of the VAT.

Furthermore, where the taxable transaction is carried out by a taxable person who is not established in the Member State in which the VAT is due and no legal instrument exists, with the country in which that taxable person is established or has his seat, relating to mutual assistance similar in scope to that provided for in Directive 76/308/EEC (10) and Regulation (EC) No 1798/2003 (11), Member States may take measures to provide that the person liable for payment of VAT is to be a tax representative appointed by the non-established taxable person.

However, Member States may not apply the option referred to in the second subparagraph to a non-established taxable person, within the meaning of point (1) of Article 358, who has opted for the special scheme for electronically supplied services.

2. The option under the first subparagraph of paragraph 1 shall be subject to the conditions and procedures laid down by each Member State."

Indeed, the IOSS facilitates the collection, declaration and payment of VAT for sellers that are making distance sales of imported goods to buyers in the EU. The IOSS also makes the process easier for the buyer, who is only charged at the time of purchase, and therefore does not face any surprise fees when the goods are delivered. If the seller is not registered in the IOSS, the buyer has to pay the VAT and usually a customs clearance fee charged by the transporter.

From 1 April 2021, you can register businesses on the IOSS portal of any EU Member State. If businesses are not based in the EU, they will normally need to appoint an EU-established intermediary to fulfil their VAT obligations under IOSS. The IOSS registration is valid for all distance sales of imported goods to buyers in the EU. You can start using the IOSS only for the goods sold as from 1 July 2021.

For further information on the rules, please check:
(can't post link!)

For further information relevant to your specific case please contact the OOS contact point of the Member State whose IOSS portal you would like to register on: (can't post link!)

We hope you find this information useful. Please contact us again if you have other questions about the European Union, its activities or institutions.

 

[schmexit]

Contacted BEIS. They told me to contact HMRC. Typical. It's like nobody knows.

 

[JPMiddleton]

It seems pretty clear in-so-much as it's better waiting for HMRC to get going. As per the Gov link there will be a portal in the UK to sign up and do it yourself without the need for an intermediary, it just won't be ready on July 1st. I'm going to hold off until the further guidance is made available and then decide.

A business not established in the EU or Northern Ireland wishing to register for IOSS will be able to do so in any EU member state or in the UK. However, it is not expected that the UK IOSS registration portal will be available for use for the 1 July 2021 launch. Further guidance on this will be made available before 1 July 2021.

https://www.gov.uk/government/publications/eu-e-commerce-package/eu-vat-e-commerce-package

 

[schmexit]

Thanks! That might be the best option indeed. Too bad it won't be ready before the 1st and there are no more details at this time.

Why don't different governmental bodies know this?

 

[jfrm]

If you aren't ready for IOSS before 1 July, then presumably you can only send DAP or sell via Amazon/Ebay which may not be an option. And who knows when the UK government etc. will eventually produce a way to go direct with IOSS. Given their track record, could be a long time.

On that basis, I have over the last few weeks contacted 17 different companies offering an IOSS intermediary service including the obvious ones like Avalara/Avask as well as smaller companies in the EU. Some did not respond. Several told me things that I know are incorrect which did not inspire confidence. 3 weeks ago, most could not give a price but now many have got their act together. Highest quote is 4800 euros per year including registration/filing (KPMG). Lowest quote so far is: Registration + 12 months of IOSS returns: 1500 Euros.

Now I'm in a dilemma, if we don't start the process now, we aren't going to be ready for 1 July. But if we do sign up now and then discover just before 1 July that we could have gone direct or the deadline is pushed back, we will have wasted 1500 Euros. Joy.

 

[schmexit]

If you aren't ready for IOSS before 1 July, then presumably you can only send DAP or sell via Amazon/Ebay which may not be an option. And who knows when the UK government etc. will eventually produce a way to go direct with IOSS. Given their track record, could be a long time.

On that basis, I have over the last few weeks contacted 17 different companies offering an IOSS intermediary service including the obvious ones like Avalara/Avask as well as smaller companies in the EU. Some did not respond. Several told me things that I know are incorrect which did not inspire confidence. 3 weeks ago, most could not give a price but now many have got their act together. Highest quote is 4800 euros per year including registration/filing (KPMG). Lowest quote so far is: Registration + 12 months of IOSS returns: 1500 Euros.

Now I'm in a dilemma, if we don't start the process now, we aren't going to be ready for 1 July. But if we do sign up now and then discover just before 1 July that we could have gone direct or the deadline is pushed back, we will have wasted 1500 Euros. Joy.

Thanks for that! Well done on contacting all those companies. Even 1500 Euros is too much, to be honest. Especially if, as you say, it ends up being unnecessary.

 

[fallschirmjaeger]

Hi

You can still send after 1st of July but it just means the customer may have to pay the vat/import duties. I say 'may' as i cannot see how they will stop every large letter/small parcel with customs value say under £50 and get the customer to pay - certainly not immediately!

So I will be using Franking and CN22/CN23 as normal with EORI number and Tariff completed as I do now and as now, hopefully they will get through and if not the customer pays the VAT etc.

 

[schmexit]

Hi

You can still send after 1st of July but it just means the customer may have to pay the vat/import duties. I say 'may' as i cannot see how they will stop every large letter/small parcel with customs value say under £50 and get the customer to pay - certainly not immediately!

So I will be using Franking and CN22/CN23 as normal with EORI number and Tariff completed as I do now and as now, hopefully they will get through and if not the customer pays the VAT etc.

Yes, but that's a TERRIBLE customer experience. VAT + especially any handling charges can be high and difficult to pay.

 

[fallschirmjaeger]

Yes, but that's a TERRIBLE customer experience. VAT + especially any handling charges can be high and difficult to pay.

Yes I agree - sort off - with time I suspect the EU will get accustomed to VAT etc. To me it is no different to USA and I sell mainly to USA so any charges are not putting my USA customers off! But its one of these 'time will tell' I may have to do the IOSS thing if sales to EU stop completely. Even from an accounting viewpoint its easier to keep off of IOSS I suspect!

 

[schmexit]

Yes I agree - sort off - with time I suspect the EU will get accustomed to VAT etc. To me it is no different to USA and I sell mainly to USA so any charges are not putting my USA customers off! But its one of these 'time will tell' I may have to do the IOSS thing if sales to EU stop completely. Even from an accounting viewpoint its easier to keep off of IOSS I suspect!

VAT itself is not a problem. It's the handling charges for collecting it, which can be from £10-20, depending on the country/courier. IOSS would prevent this, as VAT would be prepaid. For higher-priced goods, these handling charges may not be such a big deal. But if you order something that's £20 and then you have to pay £4 VAT + £20 handling charge when you receive it, you would not be happy.

 

[fallschirmjaeger]

VAT itself is not a problem. It's the handling charges for collecting it, which can be from £10-20, depending on the country/courier. IOSS would prevent this, as VAT would be prepaid. For higher-priced goods, these handling charges may not be such a big deal. But if you order something that's £20 and then you have to pay £4 VAT + £20 handling charge when you receive it, you would not be happy.

Yes I agree but I've not had the issue in USA, Canada, French West Indies, Australia etc. so I am hoping that it wont be an issue in EU! If it becomes an issue I will change to what's best, but as from 1st of July I wont be changing anything!

 

[schmexit]

Yes I agree but I've not had the issue in USA, Canada, French West Indies, Australia etc. so I am hoping that it wont be an issue in EU! If it becomes an issue I will change to what's best, but as from 1st of July I wont be changing anything!

It will be an issue in the EU, as there's now a €0 threshold for importing commercial goods. In the USA, it's $800 before you have to pay any import taxes/duties.

 

[schmexit]

I contacted London Business Hub's Brexit Panel for advice. Their response:

"Apologies for the late reply, can you please explain what IOSS is?"

 

[iossisbs]

It's a complete mess.

No one knows anything.

There is a mutual assistance agreement between particular countries in the EU and the UK, as far as I know, such as France where we have a VAT reg (Google 'Do I need a VAT fiscal representative after Brexit?' and go to first link by Avalara) but there are so many conflicting messages. One French tax agent said to me - you don't need to use an intermediary on the phone due to Mutual Assistance - and another said you absolutely do, they say: 'many companies in UK think that they don’t need to take an intermediary because of EU-UK Mutual Assistance Protocol but this is false.
This protocol is not valid because the recovery assistance threshold is not the same as that of the VAT-EU protocol. Our ministry has confirmed us recently.'

On the French website, it says that people who have a French VAT reg (and I assume this is the same for other EU countries) can apply for IOSS via their French Tax portal. They need to request a special code which activates a service on their portal, that takes 2 weeks to arrive. Once activated, they can use this service to apply for IOSS.

I am not aware of any way to directly register via UK at this time. As far as I know it has to be done via 1 member state tax office, ideally where you have an existing VAT reg.

The DIT, HMRC, UK Gov and everyone else doesn't have the foggiest!!

The only people who tell you that they know what's going on are expensive agents like Avalara or SIMPLY VAT who just quoted me £175 / month to fill in a few numbers that I will have to provide to them (a 10min job.) And £345 for the registration.

It's all nonsense. I don't care if you're Deloitte, KPMG or PWC - Even the experts imo do not know because all of this is new info, and much of it is murky and unconfirmed, so they are learning at the exact same pace as us, as and when info becomes clear. They have no 'consultancy expertise' to offer us imo. It's all one big scam.

The EU needs to get its act together - they've left this right to the last minute.

I wish they would just put out a crystal clear answer about whether or not UK companies need or do not need an intermediary when fulfilling cross border from UK to EU below €150, and whether or not mutual assistance agreements apply or do not apply for us.

Complete nonsense. Brexit is going so well!

 

[Morning]

It's a complete mess.
'This protocol is not valid because the recovery assistance threshold is not the same as that of the VAT-EU protocol. Our ministry has confirmed us recently.'

I'd been worrying about that since I got the reply from the Irish Revenue that intermediaries were required for countries without an MAA of 'suitable scope' or whatever it was they said. Between EU countries I think the threshold for assistance is 1500 euro, and it's the same for Norway-EU (and no intermediaries needed for Norway businesses). But the UK-EU MAA threshold is £5000.

So if the UK Gov has signed an MAA that isn't of suitable scope for the IOSS, why isn't anyone shouting about it beyond on forums like this? It would be totally negligent for the UK Gov to fail to secure unrestricted access to the IOSS, despite signing an assistance agreement on VAT.

But at the same time, NI businesses will be registering with an HMRC OSS, and HMRC talks of a UK IOSS portal coming eventually (which NI businesses don't use). Is the UK-EU MAA of suitable scope for those, but not for UK businesses to register without an intermediary? Who knows!

 

[Graham Wharton]

Checked in with Ireland Revenue today and still got a negative response.

The current situation for UK traders is that Norway is the only third country with which the Union has concluded an agreement on mutual assistance therefore, it is necessary for UK customers to appoint an EU established intermediary to register for IOSS and use the scheme at this time.

Negotiations are ongoing with the EU Commission and the UK so this may change in the future.

 

[schmexit]

It's a complete mess.

No one knows anything.

There is a mutual assistance agreement between particular countries in the EU and the UK, as far as I know, such as France where we have a VAT reg (Google 'Do I need a VAT fiscal representative after Brexit?' and go to first link by Avalara) but there are so many conflicting messages. One French tax agent said to me - you don't need to use an intermediary on the phone due to Mutual Assistance - and another said you absolutely do, they say: 'many companies in UK think that they don’t need to take an intermediary because of EU-UK Mutual Assistance Protocol but this is false.
This protocol is not valid because the recovery assistance threshold is not the same as that of the VAT-EU protocol. Our ministry has confirmed us recently.'

On the French website, it says that people who have a French VAT reg (and I assume this is the same for other EU countries) can apply for IOSS via their French Tax portal. They need to request a special code which activates a service on their portal, that takes 2 weeks to arrive. Once activated, they can use this service to apply for IOSS.

I am not aware of any way to directly register via UK at this time. As far as I know it has to be done via 1 member state tax office, ideally where you have an existing VAT reg.

The DIT, HMRC, UK Gov and everyone else doesn't have the foggiest!!

The only people who tell you that they know what's going on are expensive agents like Avalara or SIMPLY VAT who just quoted me £175 / month to fill in a few numbers that I will have to provide to them (a 10min job.) And £345 for the registration.

It's all nonsense. I don't care if you're Deloitte, KPMG or PWC - Even the experts imo do not know because all of this is new info, and much of it is murky and unconfirmed, so they are learning at the exact same pace as us, as and when info becomes clear. They have no 'consultancy expertise' to offer us imo. It's all one big scam.

The EU needs to get its act together - they've left this right to the last minute.

I wish they would just put out a crystal clear answer about whether or not UK companies need or do not need an intermediary when fulfilling cross border from UK to EU below €150, and whether or not mutual assistance agreements apply or do not apply for us.

Complete nonsense. Brexit is going so well!

It really is a complete mess.

I 100% blame the UK government for this. The deal we got sucks and instead of making sure that small businesses have clear guidance on IOSS/exports, they don't seem to be bothered. Not ONE person that I have contacted from the government, including my MP, has said: "Oh, wait, this is serious - I will get right on it and we will have a clear answer shortly."

 

[schmexit]

While we're waiting for answers...

- Why the €150 limit?
- How is this calculated (goods inc VAT but before postage, for example)?
- What would you do with orders over €150?

 

[Graham Wharton]

150 EUR is the Duty Free threshold.

• Shipments above 150 EUR Intrinsic Value require duty to be collected at the border, so they say not to collect VAT at the checkout as the VAT + Duty will be collected at the border.
• Shipments below 150 EUR Intrinsic Value do not require duty to be collected, so if VAT is collected at the checkout, there will be nothing to collect at the border and the items will breeze through.

The Intrinsic Value is calculated by summing the ex-vat sale price of all items on the order including removing any discount. The Intrinsic Value DOES NOT include any shipping, freight or insurance costs. It is the "Intrinsic Value" of the goods. Not the order total. Search for the definition of "Intrinsic Value IOSS" on google. Sorry, I dont have enough credit to post links. You should be able to find the EU docs to back up this information via google.

It is not the same calculation as when determining the amount of VAT you should collect, which SHOULD INCLUDE shipping, freight or insurance costs.

For orders with intrinsic value above 150 EUR, just do not collect any VAT. Do not collect UK VAT. Make sure your commercial invoice contains a breakdown of the goods value, shipping costs, and total order value. If your goods have "Country of Origin" the UK, and you have the necessary evidence to support it, include an Origin declaration on your commercial invoice stating that the goods should attract preferential duty rates and include your EORI number to ensure they go duty free. In this case, VAT would still be collected at the border even if no duty is due, due to preferential duty rates.

I hope this helps.

Graham

 

[schmexit]

150 EUR is the Duty Free threshold.

• Shipments above 150 EUR Intrinsic Value require duty to be collected at the border, so they say not to collect VAT at the checkout as the VAT + Duty will be collected at the border.
• Shipments below 150 EUR Intrinsic Value do not require duty to be collected, so if VAT is collected at the checkout, there will be nothing to collect at the border and the items will breeze through.

The Intrinsic Value is calculated by summing the ex-vat sale price of all items on the order including removing any discount. The Intrinsic Value DOES NOT include any shipping, freight or insurance costs. It is the "Intrinsic Value" of the goods. Not the order total. Search for the definition of "Intrinsic Value IOSS" on google. Sorry, I dont have enough credit to post links. You should be able to find the EU docs to back up this information via google.

It is not the same calculation as when determining the amount of VAT you should collect, which SHOULD INCLUDE shipping, freight or insurance costs.

For orders with intrinsic value above 150 EUR, just do not collect any VAT. Do not collect UK VAT. Make sure your commercial invoice contains a breakdown of the goods value, shipping costs, and total order value. If your goods have "Country of Origin" the UK, and you have the necessary evidence to support it, include an Origin declaration on your commercial invoice stating that the goods should attract preferential duty rates and include your EORI number to ensure they go duty free. In this case, VAT would still be collected at the border even if no duty is due, due to preferential duty rates.

I hope this helps.

Graham

That's brilliant, thank you so much, Graham!

So, if the order looks like this, all prices ex any UK/EU VAT:

Item A: £10
Item B: £30
Discount: £5
Shipping: £10
_______________

EU duty-free amount: £10 + £30 = £40. The £5 discount is disregarded?

But EU VAT is charged on: £10 + £30 - £5 + £10 = £45

Is that correct?

 

[Graham Wharton]

No, you include the discount.

The intrinsic Value would be 35 EUR
And VAT would be due on 45 EUR

On my store, I do all my sales in GBP. Once a month, I will download the exchange rate from the EU website (InforEuro) and use this to convert the 150EUR into GBP. Currently about 131 GBP. Then I do the threshold comparison against this number in GBP. And any VAT calculations I do in GBP at the relevant EU rate.

At the bottom of my commercial invoices which are all in GBP, I will have an EU VAT summary section where I state the exchange rate used, and convert the Total Ex Vat, VAT Charged and Grand Total into EUR for information, and will include my EU VAT Number when I get it.