Anything surrounding taxes or fees with international shipping can be intimidating. Knowing all the requirements will take some research. While you can do research on your own, due to the nuances of tax law it is highly advisable to speak with a legal or tax professional. This guide will provide you with some very general advice surrounding Tax Identification Numbers or TINs, give general information on VAT (Value Added Tax) and IOSS (Import One-Stop-Shop), and supply you with links to help articles on how to apply your tax identifier numbers to shipments in ShipWorks.
The basic use of a TIN is to quickly identify your business and track its related tax activities. Within the United States, you may be familiar with the Employer Identification Number (EIN) that appear on your tax forms.
If you are shipping to other countries, particularly in Europe, your business will require another type of TIN. Some of the more common ones are Value Added Tax (VAT) , Import One-Stop Shop (IOSS) and Economic Operators Registration and Identification (EORI).
VAT: Value Added Tax Number is required for doing business in several European countries. You may need more than one VAT Number based on the countries in which you do business.
EORI: A unique number used by customs and other authorities to monitor and track shipments coming into and out of the European Union.
IOSS: An online portal to help businesses pay their VAT called the Import One Stop Shop (IOSS). Businesses must register to use this service and they are provided a number for it.
Which TIN should I use?
The appropriate Tax Identification Number for your business is dependent on several factors. The major factors are where your goods ship from, the destination country, and what goods you sell.
You can check the embassy or government website for the destination country to find out which tax numbers they require for imports. Ultimately, this would be a conversation to have with a tax expert.
How do I get one?
Each TIN has a set of requirements to meet before you apply for one. Many countries will list the requirements and methods of application on their government website. In many cases, you will fill out an online form.
How many TINs can I have?
You can have multiple Tax Identification Numbers associated with your business especially if you ship to multiple countries.
Can I ship internationally without a TIN?
Any shipment that is subject to taxes and duties will need one. Failure to include a TIN number on your shipments may result in fines, delays or returns.
However, not all countries require VAT or duties, so the requirements may vary. Consult government websites for the destination country or talk with a tax expert to confirm if you need a specific TIN.
Starting July 1st, 2021, all goods shipped to the United Kingdom (UK) and the European Union (EU) are subject to Value Added Tax, or VAT, regardless of the price of the goods in the shipment. You can use the Avalara VAT Risk Assessment tool to find out if your company will need to be VAT registered.
VAT is a tax applied to a product whenever value is added at any stage in the supply chain—from production to the point of sale. The cost of the VAT that is paid is based on the cost of the product, minus any of the costs of materials used in the product that has already been taxed.
The IOSS (Import One-Stop-Shop) allows suppliers and merchants selling imported goods to customers in the EU to collect, declare, and pay the VAT to the tax authorities, instead of making the buyer pay the VAT at the moment the goods are imported into the EU as it was previously the case (for products over 22 EUR). You can use the IOSS to cover VAT fees for consignments of up to €150.
Obtaining Your IOSS Number
If you have questions or need your IOSS number, contact your selling channels to request this information. If you do not use the IOSS, your customers WILL pay the VAT upon delivery.
EU law requires that the standard VAT rate must be at least 15% and the reduced rate at least 5% (only for supplies of goods and services referred to in an exhaustive list). The actual rate will vary between EU countries. View the country-specific VAT authority for more information on the rates.
Most eCommerce marketplaces will have an IOSS number that can be used to apply the correct VAT at the time the order is placed. Reach out to your marketplace to receive this number.
Countries in the EU
Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden
As a U.S. online retailer, you will now be required to create an online account with Her Majesty's Revenue and Customs (HMRC) and register for a VAT number in order to deliver ecommerce orders to the UK. You will be required to collect all VAT fees from your buyers at the time of product purchase. This VAT fee was previously collected when a parcel entered the UK, typically with the buyer having to pay VAT to release the package from Customs. Read more about shipping to the UK.
The VAT tax standard rate is 20% - VAT rates vary and are dependent on the product price.
Online Marketplace, or OMPs, selling to customers in the UK are responsible for collecting VAT from customers. If you sell goods through an OMP, you do not need to use your UK VAT number or charge the VAT.
If goods being sold are already in the UK at the point of sale, the OMP making the sale is now responsible for the VAT.
Utilize ShipWorks' built in automation features to store and automatically apply your Tax ID numbers to international shipments. Below is a list of carriers and the Tax ID types supported in ShipWorks along with links to help articles to assist you with adding your Tax ID numbers.
This list will be updated as we add support for more carriers. (*Default value in ShipWorks)
Use the following ShipWorks help articles to learn how to enter your tax ID numbers when shipping internationally.
Manually Add Tax ID and IOSS Numbers to Shipments - This article will guide you through how to manually add a Tax ID Number to a single shipment.
Add Tax IDs and IOSS Numbers to ShipWorks - Guides you through creating a Shipping Profile that can be used to apply your Tax ID and IOSS numbers to one or more shipments.
Add Tax Identification Number to Commercial Invoice - Ensure that Tax Identification Numbers (TIN) are displayed on the printed Commercial Invoice when shipping internationally.
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