See how CBIT manage Shopify merchants for IOSS shipments
December 16, 2022
As of July 1 this year, the VAT exemption on imports of goods worth up to €22 when accepting shipments from countries outside the European Union is abolished. This means that customs formalities are mandatory on all goods imported into the EU, regardless of their value and whether they are of a commercial or non-commercial nature.
Correct way to calculate VAT
To make things easier the EU created a VAT accounting system called IOSS (Import One Stop Shop). This system allows VAT to be paid as part of the online payment for goods on a non-EU merchant's website.
However, the IOSS system can only be used if the goods imported into the EU from third countries do not exceed the value of EUR 150 and are not excise goods.
If you wish to register for IOSS and your business is not established in the EU, you must appoint an intermediary to handle the VAT for you.
Appointing the intermediary (such as Crossborderit) provides assurances to member states that retailers located in countries without mutual assistance agreements have a local representative who can support queries and audits related to EU VAT obligations; the intermediary is also there to make payment in the event of non-compliance, in most member states.
Acting on behalf of a vendor selling in the EU, the intermediary is responsible for filing IOSS returns, making payment and providing the relevant tax administration with all relevant data requested.
Sellers on Shopify can now be on the IOSS
Crossborderit (CBIT) integrates with Shopify. The Crossborderit app, along with Shopify's tax and duty calculator, allows merchants to calculate taxes at checkout, report shipments using their CBIT IOSS number and enter EU countries under the new "one stop shop" rules.
The current Crossborderit application allows automatic reporting of IOSS shipments. Future versions will allow VAT collection at checkout.
Crossborderit's Shopify application costs $24 per month. When this fee is charged on Shopify, it will replace the $19.99 fee Crossborderit charges for access to the CBIT system. This access includes all reporting, compliance and system access.
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