Selling into Europe: Helping you get ready for the EU’s VAT changes
What has changed for the sale of goods into Europe?
From 1st July 2021 the low value consignment relief, on goods valued under €22 sold into Europe, will be discontinued. This means that all goods sold and exported into Europe from Guernsey will be subject to VAT regardless of their sale value.
The European Union (EU) has made these changes to re-establish fair competition between European and non-European ecommerce retailers.
If you are selling goods to consumers in EU countries, you have the following options:
- Do nothing. Your goods will be classed as 'Delivery Duties Unpaid' (DDU). This is where you send the goods without pre-paying the VAT, and the recipient pays the VAT at the time of delivery. The recipient country usually adds a handling charge on top of the VAT due and this is payable before they can receive the goods. The charges depend on the country you are sending to and the value of the item. The goods may be delayed because of Customs requirements to apply these charges.
- Pay VAT via a Marketplace. If your products are sold via a Marketplace (such as Amazon or eBay), the collection and charging of VAT at the point-of-sale is the responsibility of that Marketplace. Many Marketplaces are already registered with the Import One Stop Scheme (IOSS) and will automatically include the relevant VAT in the purchase price to the buyer. Please check with your Marketplace as they may require you to include their IOSS number within the electronic customs declarations to ensure your customers enjoy problem free delivery of the goods.
- Pre-charge the VAT due and declare via the Import One Stop Shop (IOSS) scheme. If you sell your goods directly to your consumers and you wish to pre-charge the VAT due, you will need to register for the IOSS Scheme. You can then submit the IOSS number in the electronic custom's pre-clearance information on your shipping platform. Guernsey Post are not able to do this for you. Please see our IOSS and Assisted Solutions Guide below for further information.
Please be aware that items valued over €150 cannot be declared via IOSS and will still be subject to VAT on arrival.
If you choose to follow a pre-clearance solution, please note it is vital that import tax numbers are highlighted in the electronic customs data system when declaring your goods to ensure that the pre-payment has been clearly communicated.
Download our IOSS and Assisted Solutions Guide HERE
Download our FAQs click HERE
If you would like to speak to someone about your options please contact Ciara Devlin, Head of Local Business on 733507 or [email protected]