Hi, I’m starting to see reports of customers facing custom duties when selling to European based customers. If I’m a UK seller do my customers in Europe now have to pay these extra fees and if so what is the purchase amount at which they have to start paying? What if I’m not actually sending the goods from the UK and instead am sending them from a warehouse in Latvia or from China?
January 11, 2021 at 8:12 am
From what I have learned;
If you are sending them goods from a warehouse in Latvia, you are selling within the EU Single Market, no Customs and VAT is under Distance Selling rules.
If you are sending from China or the UK, you are sending from outside the EU, so Customs Duties possible, depending upon rules of origin and the trade agreement between the countries and the package value. If the item is over €22, VAT is due in the purchasers country. If you aren’t registered for VAT there, it is Import VAT which is payable.
To pay Customs Duties and VAT, you can send packages Delivery Duty Paid, so the courier bills you for customs clearance and VAT, or you can send them unpaid, so the purchaser pays those to release the package.
If you do alot of volume into the country, you can register for VAT in the country to which you are selling, and then, with an EU EORI and UK EORI number, should be able to get the package straight to the purchaser, and pay the relevant VAT direct to the tax authorities without paying Import VAT (not the same thing!).
From July the EU rules change again, so you will only need a single VAT number for the whole of the EU, which should simplify things alot. Read up on “IOSS”. Also, from July, if you are selling on Amazon/eBay etc, they will sort the VAT themselves under the new “OSS” rules, which again should make life easier.