Shopify USA - How to sell to EU & UK
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.
EU and IOSS
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 Intermediary and the choice of 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 you are up and running in a day or two. Whatever your requirements are.
UK & UK VAT
Much better naming, than EU OSS!
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 for you.
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.
Don’t just stand there, get on with it!
You don’t need marketing budgets. You need to open your store for sales. See what happens, you can then decide on the extra measures you take on each market.
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?
The complete package is 1,25€ / transaction + 6€ invoicing fee once the monthly invoice exceeds 30€. No upfront or periodical fees.
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.