European countries are implementing rules mandating prepayment of VAT for e-commerce orders. The directive is part of the “Digital Single Market Strategy for Europe" to ensure VAT collection for international online orders. Jet Worldwide offers best in class shipping solutions for online orders to Europe and the UK from US and Canada.
The low-value threshold under which many e-commerce parcels are imported were considered to be both unfair to local retailers and being taken advantage of via abusive practices. As a result, non-EU businesses and online sites must now collect EU VAT.
Among the main changes are provisions for online marketplaces to be deemed the "supplier." As a supplier, the online marketplace will be held responsible for collection of VAT for online orders of up to €150.
This new process, referred to as the Import One Stop Shop (IOSS), are designed to simplify the importation of online goods valued under €150.
Summary of Changes of VAT Rules for Imports to the European Union:
1. EU VAT Rule Changes are Effective July 1, 2021
All goods imported to the EU will be subject to VAT on July 1. Currently, goods valued under €22 can be imported duty free and without VAT.
2. Introduction of IOSS Processes and portal
Import One-Stop Shop: E-commerce shipments valued under EUR 150 can be imported via One-Stop Shop (IOSS) processes that allow sellers and online marketplaces to charge VAT at the point of sale and remit it directly to the authorities.
- If the IOSS is not used, the VAT will be charged to ecommerce customers by the importing carrier (plus an administrative/ pre-payment fee).
The Canadian e-commerce businesses and marketplaces will be able to register for a VAT account in only one EU country. Currently, sellers have to register in each country they sell and ship to.
3. Collection of VAT from point of Sale by marketplaces and online sellers
Online marketplaces or direct to consumer (DTC) individual sellers (who do not use an online marketplace) are the responsible party for collecting VAT for orders up to €150.
- Online merchants using several marketplaces to should keep records of their sales corresponding to the IOSS number/ customs declarant used for the transaction.
4. The IOSS applies to online sales to all EU countries and Northern Ireland
EU countries include Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden. EU VAT rules for Northern Ireland are established in the EU-UK Joint Protocol.
5. Canadian companies and ecommerce sellers can access register via the IOSS portal of an EU Member.
Businesses not already established in the EU will likely need to appoint an EU-established intermediary to fulfill the VAT obligations.
For details on IOSS and the otherEU’s VAT rules, visit: Publications Office of the European Union.
IMPORT CONTROL SYSTEM and DDP TO EUROPEThe implementation of IPC’s ICS2 (Import Control System 2) or similar solutions, so that entry summary declarations on all parcels and packets entering the EU are made. Jet works with online sellers to offer Delivery Duty Paid (DDP) solutions from the US and Canada.
The UK has instituted similar VAT collection requirements. Online platforms including eBay and Shopify are having to adapt to support the collection of VAT to the EU and UK. Jet Worldwide works with shippers in Canada and the US to develop high-volume parcel import processes and last-mile delivery to Europe Union Countries and the UK.
New record-keeping requirements will be introduced for businesses facilitating supplies of goods and services through the use of an electronic interface, including where the electronic interface is not a deemed supplier.
Jet Worldwide is a trusted brand that has been providing international shipping solutions for over 35 years.
- Jet Worldwide provides options for parcel shipping solutions between the USA and Canada and Europe / UK for online orders.
- Delivery VAT and Duty paid import for B to C e-commerce consignments
- Jet Worldwide offers transparency and world class logistics support. We are not shy about recommending alternative solutions as necessary.
Low-Value Duty-Free Threshold: €150
The good news is that shipments valued under €150 are not subject to duty. And many registered businesses can claim back value added tax paid. It is simply a matter of collecting the European countries VAT at moment of checkout.
Including VAT at check out for European orders actually gives credibility to the online site.
Intrinsic value: The €150 threshold is for the total shipment (not each item within a shipment and excludes shipping and insurance cost (unless they are included in the price and not indicated separately on the invoice). For goods of a non-commercial nature the intrinsic value is the price which would have been paid for the goods themselves if they were sold for export to the customs territory of the Union. Products subject to excise duties).
Shopify, e-Bay and Shipping Online Canadian Orders to Europe
Jet Worldwide helps sellers find import and last mile delivery solutions to the European Union, UK, Japan, Caribbean, South American and Asia Pacific countries. Consult with Jet Worldwide to improve your international shipping for online orders from Canada and the USA.
Read more about HS Codes and shipping online orders
Shipping European Online Orders from Canada via Jet Worldwide
For a quote for shipping online orders, provide details including shipping volume, item(s) being shipped, average value and weight of each parcel. The more details the better :).
Disclaimer: The information in this blog is for general information only and is not intended to, constitute legal and/or tax advice. Producers, shippers, exporters, importers should confirm their processes with their customs brokers, carriers and regulating authorities. All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed. The content on this posting is provided “as is”; no representations are made that the content is error-free.