- Original Poster
- #1
I have started a new thread rather than continue to add to the ongoing "IOSS" 16+ page thread, as this is fairly unrelated to the "IOSS registration" and more a tax thing on eBay.
Short story is, we use eBay and Royal Mail Click+Drop. Since 1st July a lot of orders on eBay show the plus-VAT and IOSS / VAT Collected notes in the order details. So that's fine.
But, certain orders don't appear to have this accounted for. I noticed it on a couple of Spanish orders.
Example: Order 1 has come through. £10 item, £10 postage, 21% tax collected. Total: £24.20
Example: Order 2 has come through. £10 item, £10 postage, no tax collected. Total: £20.00
Both orders are similar value, and both from buyers in Spain.
I asked eBay about this and I'll paste the chat transcript below - I would appreciate feedback on this.
I am essentially being told that the buyer is VAT exempt and it doesn't matter, and to just send the item as it is.
What do others think here? I am not sure what my best course of action is really. I asked the buyer, he seemed oblivious.
Transcript below, long winded but see bolded parts for agent replies and red highlights:
Agent: About your query yes eBay is now collect Tax for buyer outside UK where item sold for £135.00 or below however, if item doesn't have IOSS information and not part of ship to address of your buyer that means VAT not required. This change is mandated for buyer where they can see VAT through eBay checkout. The only responsible of seller is update listing and add VAT rates.
Agent: All order outside UK has required VAT except some buyer's excluded for paying VAT don't worry this change apply since July 1st all buyer outside UK and part EU is now aware since eBay send general message about changes.
Agent: By the way did you specified VAT rate of 20% from your listing?
Me: I do not need to, I am not vat registered in the UK.
Vhee Jay: I see but your item location is UK right?
Me: Yes
Agent: Great! By the way UK to UK no vat required and we only generate IOSS information if item sold outside UK where buyer's mandated to pay and no obligation for seller to take action since we made it aware for all potential buyers.
Me: Ok great. Yes I know that about the UK vat, as I have been non-VAT registered for many years and trading without problem. The only concern was my Spain orders from today/yesterday that do not show any VAT paid by the buyer. So eBay IOSS is not being used. So you are saying this will be due to the buyer not being required to pay VAT?
Agent: Yes if there's no IOSS that's mean this particular buyer exempted and its considered normal sales.
Me: i just do not understand how that is possible to avoid paying VAT on an item that someone from France (for example) pays VAT on, when EU rules should all be the same.
Me: I would just like to absolutely be sure that the Spain order is not incorrect and eBay should have added VAT. The rules for EU are all the same - VAT on *everything* except certain items (medical supplies, things like that). But all my items are plus VAT in Europe. Just wondering how someone in Spain does not pay it, but someone in France does. Want to check eBay is not incorrect.
Agent: Bear with me,
Agent: (rep looks at my first order number, clarifies tax unpaid by buyer)
Me: Correct, that is the item and the buyer. So buyer has not paid VAT? Or does not require himself to pay VAT? If he is not required to pay VAT, how is that possible? All EU rules are the same. If I dispatch the item I know it will get rejected as unpaid tax.
Me: This is obviously a huge concern as we expect everything for EU to be plus VAT. But it is only a couple of Spain orders not showing VAT. So not sure why.
Me: There are other Spain orders with no VAT paid, too.
Agent: By the way since this VAT is just started July 1st and not yet finalize some regions or country haven't apply or added this changes yet in line with EU VAT rates.
Agent: So there's a possible Spain or eBay.es have threshold for TAX obligation. And not required yet.
Me: But if you look at second order (second order number provided), this is Spain, and VAT paid at 21%. This is why it is extremely worrying/confusing. It means it is very high risk for me to dispatch a non-VAT paid order. eBay should not allow them? It is not my responsibility to pay the VAT and worry about it getting rejected due to unpaid charges.
Me: I just do not know what to do for the best.
Agent: This one have - VAT Paid : IOSS - IM2760000742 where buyer pays VAT that means if some other buyer from Spain doesn't have VAT from there purchased. The buyer is exempted part of exemption.
Me: I know. Do you understand my concern though? Some paid VAT, some did not, but rules are meant to be uniform across the WHOLE EU - VAT on everything
Agent: Let me share exemption criteria for VAT where buyer located outside UK. Bear with me,
Agent: Found buyer have register VAT id from Spain where they contacted local tax consultant to get exemption for paying tax: If your income is less than or equal to the standard deduction, it's not taxable. For example, if you're under the age of 65, single and earned an income of less than £12,000 in a year, you are not required to pay tax.
Me: Is that not income tax? Not VAT on something you buy surely?
Agent: To be exempt from withholding, both of the following must be true: You owed no federal income tax in the prior tax year, and. You expect to owe no federal income tax in the current tax year. Also if buyer is working in government No VAT required.
Me: I will leave it at that and see wha the buyer says, I have asked him. Thank you for your help.
Agent: No worries those buyer is just exempted. Possible working in government like military or earn less. The buyer will surely understand this as this is a genuine issue and no one can blame for this.
(end)
What do we think from this then? Seeing EU orders with no VAT paid says to me it'll just get rejected/charged at customs.
EDIT: some of the stuff he quoted seems to be word-for-word copy/paste from sites unrelated to the VAT query or even Spain!
Short story is, we use eBay and Royal Mail Click+Drop. Since 1st July a lot of orders on eBay show the plus-VAT and IOSS / VAT Collected notes in the order details. So that's fine.
But, certain orders don't appear to have this accounted for. I noticed it on a couple of Spanish orders.
Example: Order 1 has come through. £10 item, £10 postage, 21% tax collected. Total: £24.20
Example: Order 2 has come through. £10 item, £10 postage, no tax collected. Total: £20.00
Both orders are similar value, and both from buyers in Spain.
I asked eBay about this and I'll paste the chat transcript below - I would appreciate feedback on this.
I am essentially being told that the buyer is VAT exempt and it doesn't matter, and to just send the item as it is.
What do others think here? I am not sure what my best course of action is really. I asked the buyer, he seemed oblivious.
Transcript below, long winded but see bolded parts for agent replies and red highlights:
Agent: About your query yes eBay is now collect Tax for buyer outside UK where item sold for £135.00 or below however, if item doesn't have IOSS information and not part of ship to address of your buyer that means VAT not required. This change is mandated for buyer where they can see VAT through eBay checkout. The only responsible of seller is update listing and add VAT rates.
Agent: All order outside UK has required VAT except some buyer's excluded for paying VAT don't worry this change apply since July 1st all buyer outside UK and part EU is now aware since eBay send general message about changes.
Agent: By the way did you specified VAT rate of 20% from your listing?
Me: I do not need to, I am not vat registered in the UK.
Vhee Jay: I see but your item location is UK right?
Me: Yes
Agent: Great! By the way UK to UK no vat required and we only generate IOSS information if item sold outside UK where buyer's mandated to pay and no obligation for seller to take action since we made it aware for all potential buyers.
Me: Ok great. Yes I know that about the UK vat, as I have been non-VAT registered for many years and trading without problem. The only concern was my Spain orders from today/yesterday that do not show any VAT paid by the buyer. So eBay IOSS is not being used. So you are saying this will be due to the buyer not being required to pay VAT?
Agent: Yes if there's no IOSS that's mean this particular buyer exempted and its considered normal sales.
Me: i just do not understand how that is possible to avoid paying VAT on an item that someone from France (for example) pays VAT on, when EU rules should all be the same.
Me: I would just like to absolutely be sure that the Spain order is not incorrect and eBay should have added VAT. The rules for EU are all the same - VAT on *everything* except certain items (medical supplies, things like that). But all my items are plus VAT in Europe. Just wondering how someone in Spain does not pay it, but someone in France does. Want to check eBay is not incorrect.
Agent: Bear with me,
Agent: (rep looks at my first order number, clarifies tax unpaid by buyer)
Me: Correct, that is the item and the buyer. So buyer has not paid VAT? Or does not require himself to pay VAT? If he is not required to pay VAT, how is that possible? All EU rules are the same. If I dispatch the item I know it will get rejected as unpaid tax.
Me: This is obviously a huge concern as we expect everything for EU to be plus VAT. But it is only a couple of Spain orders not showing VAT. So not sure why.
Me: There are other Spain orders with no VAT paid, too.
Agent: By the way since this VAT is just started July 1st and not yet finalize some regions or country haven't apply or added this changes yet in line with EU VAT rates.
Agent: So there's a possible Spain or eBay.es have threshold for TAX obligation. And not required yet.
Me: But if you look at second order (second order number provided), this is Spain, and VAT paid at 21%. This is why it is extremely worrying/confusing. It means it is very high risk for me to dispatch a non-VAT paid order. eBay should not allow them? It is not my responsibility to pay the VAT and worry about it getting rejected due to unpaid charges.
Me: I just do not know what to do for the best.
Agent: This one have - VAT Paid : IOSS - IM2760000742 where buyer pays VAT that means if some other buyer from Spain doesn't have VAT from there purchased. The buyer is exempted part of exemption.
Me: I know. Do you understand my concern though? Some paid VAT, some did not, but rules are meant to be uniform across the WHOLE EU - VAT on everything
Agent: Let me share exemption criteria for VAT where buyer located outside UK. Bear with me,
Agent: Found buyer have register VAT id from Spain where they contacted local tax consultant to get exemption for paying tax: If your income is less than or equal to the standard deduction, it's not taxable. For example, if you're under the age of 65, single and earned an income of less than £12,000 in a year, you are not required to pay tax.
Me: Is that not income tax? Not VAT on something you buy surely?
Agent: To be exempt from withholding, both of the following must be true: You owed no federal income tax in the prior tax year, and. You expect to owe no federal income tax in the current tax year. Also if buyer is working in government No VAT required.
Me: I will leave it at that and see wha the buyer says, I have asked him. Thank you for your help.
Agent: No worries those buyer is just exempted. Possible working in government like military or earn less. The buyer will surely understand this as this is a genuine issue and no one can blame for this.
(end)
What do we think from this then? Seeing EU orders with no VAT paid says to me it'll just get rejected/charged at customs.
EDIT: some of the stuff he quoted seems to be word-for-word copy/paste from sites unrelated to the VAT query or even Spain!
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