How to Sell to Europe from the US with Shopify: VAT, IOSS & DDP Explained
US is nice but have you checked Europe? 500+ million affluent potential customers – with EAS they are easily accessible without upfront investments and without sacrificing customer experience!
The only option is to have the customers pay everything at checkout. No-one likes surprises, especially surprise expenses. Efficient, customer friendly solutions exist. Learn here about how to sell to Europe with EAS.
EU and IOSS – The Foundation of How to Sell to Europe
IOSS number allows for fast and cheaper deliveries due to simplified customs procedure and collection of VAT at checkout. The end-customer is left with only collection to do. The limitation is the 150€ threshold for merchandise value. Threshold is calculated from tax free cost of merchandise, without shipping or other fees. IOSS is applicable only for physical goods.
IOSS requires an IOSS Intermediary and the choice of IOSS Intermediary is the most important one. Make sure the Intermediary
- Automates processes, not cause more manual work
- There are no official upfront charges, so make sure you don’t have them from the Intermediary
- There are no official periodical charges, so make sure you don’t have them from the Intermediary
- You can get out of the contract without excessive costs (yes, you have to read the small print)
- Solution is scalable
- Pay-as-you-go is the transparent pricing which is also easy to include in shipping fees
IOSS really is a no-brainer. If you sell digital goods, non-Union scheme supports you.
Just make sure your logistics partner can handle the operating model, just ask them. With EAS, Shopify USA merchants can be IOSS-compliant in a day or two, making how to sell to Europe a straightforward process.
UK VAT – Completing the Puzzle of How to Sell to Europe
With this registration you can sell goods below 135£ to UK in a very much the same manner as IOSS. Except it also handles your digital goods and, if you happen to store goods in UK, you can utilise the same VAT scheme.
You don’t need to have a 3rd party to do the registration. But you do need to get started with the registration yesterday, however. It will take more time, weeks instead of minutes with IOSS and EAS. Also, take it easy, some document request seem quite random…
Again, make sure your logistics partner can handle the process. We are happy to take the role of Tax Agent, which makes the model work exactly as easily as IOSS which means that mastering UK VAT is the second piece of the puzzle in how to sell to Europe and the UK effectively.
DDP
Delivery Duty Paid, meaning the customer pays everything at checkout. The merchandise, taxes, shipping, duties and fees, which will be invoiced from you, the merchant, later. For the time being, this is only possible to get from couriers, postal DDP simply does not exist in a meaningful way – yet.
The problem is, it DDP be exceedingly expensive, especially so for the low value consignments. And that can turn away customers – which is still better than you having to pay for the returns. We can easily adjust your store to collect taxes and even duties in some instances, meaning it is really is a viable option.
Combine DDP with IOSS you have all demands covered.
DDU / DAP (not recommended)
Unless you like excessive returns, please do not use DDU / DAP delivery methods. Naturally there are exceptions, such as when your product is absolutely one of a kind. In general, shipments with surprise costs at delivery WILL result in excessive returns.
And no, no-one actually reads your shipment terms. They will be surprised.
Conclusion
So now you know how to sell to Europe — don’t just stand there, get on with it! You don’t need a massive marketing budget to start testing the EU and UK markets. Open your store, make sales, and then optimize further.
With EAS, how to sell to Europe from Shopify USA becomes fast, scalable, and fully automated.
Want to learn more:
- Check out our blog – EAS Blog
- Register with EAS today – Register
- What is our pricing – EAS Pricing
- Solutions we offer – EAS Solutions
FAQ
Can I register for IOSS in UK?
No, to enrol in IOSS you need to find an Intermediary and register via them in an EU country.
Do I need a Fiscal Representative with UK VAT?
For EU, US, Canadian, Australian and NZ companies it is not a requirement.
What does EAS charge for IOSS Intermediary?
Check our pricing here.
Can I ship using IOSS to UK?
No, IOSS is an EU VAT scheme.
What happens if I ship without IOSS / UK VAT?
Depends on the logistics solution, either DDP or DDU. DDP will be delivered without demands from the customer. DDU will have the courier collect fees (can be anything) taxes and duties.
What is European tax?
Well, as Europeans, everything is taxed. Most of the discussions lead to Value Added Tax, VAT. In short, you can deduct what you have paid if you have the proper registrations but you always charge the VAT as a non-EU entity. In short. After this it gets really confusing. We are here to either explain / just make it work and we prefer the latter.
What does Shopify Tax App do?
It does the basic tax calculation. Works miracles, around the world. But it is not tax compliance. You still need to have the registrations, filings, payments etc. Which is why EAS is here. To actually make you compliant.
Do you want to start your European sales today?
