Winning European Union VAT Laws With Printify
All successful businesses expand. But with that desirable growth comes the reality of international legal compliance. As your orders cross various borders, they will be subject to the value-added taxation of that country.
The purpose of this article is to help merchants understand the recent legislative changes to value-added tax (VAT) in the EU and the tools we’ve presented for the situation.
In short, starting October 1, 2021, Printify is charging VAT on orders in the European Union, Norway, and the United Kingdom. At the same time, we’re streamlining legal responsibilities, speeding up order transit, and providing necessary information for merchants to reclaim VAT expenses.
Printify is registered as a VAT payer in Czech Republic, Germany, Italy, Latvia, the Netherlands, Norway, Poland, Spain, and the UK.
Printify is registered as a VAT payer in Czech Republic, Germany, Italy, Latvia, the Netherlands, Norway, Poland, Spain, and the UK.
Please note that this article is not meant to serve as tax, legal, or accounting advice, instead it has been prepared for informational purposes. We recommend consulting your own tax, legal, and accounting advisors before acting.
Meanwhile, we have partnered with VAT experts to help clarify questions on print-on-demand eCommerce in Europe, and help set up VAT registration and reporting.
Table of Contents
1. What is VAT?
1. What Is VAT?
These are regulatory measures applied on transactions, tilted toward balancing the global economy. These tariffs also generate income streams for publicly beneficial purposes.
A value-added tax is a transactional tax charged on the sale of goods and services – often between 5-27% of an order’s total cost. This system has been adopted by over 115 countries, providing a common framework for invoicing, registration, and other aspects of international business.
As this tax is applicable at each stage of an order’s production, it is applied relative to the net value of the value of goods sold within producing countries – taking into account local tax rates. Generally speaking, all goods and services moving across borders or sold locally are subject to VAT.
All products within the Printify catalog are subject to VAT. This includes sample orders and items purchased without the intention of resale.
2. How Is VAT Different From USA Sales Tax?
VAT and sales tax are really just different sides of the same regulative coin in different parts of the world.
In America, sales tax is primarily applied to the sale of goods. However, these measures are distributed unequally by state and local governing bodies with significant degrees of immunity for various parties. Read more about Printify and US sales tax on our blog here.
In contrast, originally invented in Europe, VAT is almost universally applied to all goods and services.
3. Are VAT Rates Equal in All European Union Jurisdictions?
No. VAT rates are different between each country. However, the VAT rules are harmonized under the European Directive. For more information, please see EU VAT regulations.
4. How Is VAT Calculated and Charged?
The answer to this question depends on what country the order is created in, where it is shipped to, and the VAT ID used in that transaction. Concrete examples are provided at the end of this article, but let’s break down the factors first:
● How Is VAT Applied to Orders That Travel Within the European Union?
As your goods will undoubtedly cross borders within the EU, the various tax rates applied to orders depend on a few factors, such as whether or not you have a VAT ID, and the order origin and destination countries.
If you can provide a VAT ID within the producing country (where the order originates from), then the VAT of that country will be used.
If you do not have a VAT ID, then the VAT of the destination country (where the order arrives) will be used.
If you have a VAT ID in any other EU country, 0% VAT will be applied. Note that in this case you are responsible to account for the reverse charge mechanism in the destination country.
● How Is VAT Applied to Orders Shipped to European Union Countries From Other Locations (USA, China, Etc.)?
This information also applies to The United Kingdom and Norway.
Whenever a foreign order is shipped into the EU (or the UK or NO), a destination VAT is applied. However, Printify will manage all the formalities of customs using our import-one-stop-shop (IOSS) registration, which enables Printify to act as a goods importer.
Before implementing this system, each merchant’s order would be held in customs while their VAT taxes were collected. However, the IOSS regime allows us to charge the VAT upfront if the intrinsic goods’ value of the order is below 150 euros (or equivalent if invoiced in a different currency) and the merchant is not VAT registered in the EU. The VAT charged is then remitted to the tax authority by Printify, saving your customers from legislative challenges and the unpleasant surprise of paying VAT when receiving their order. Needless to say, this allows your customer to receive their order much faster.
This system eases tax burdens, speeds fulfillment, and simplifies legal requirements for all merchants. Here, the local VAT rates of the consumer destination are used.
● How Is VAT Applied to Orders Created in Europe and Shipped Outside of Europe?
When selling goods or services to customers outside the EU, you don’t have to charge customers any VAT.
● How Has Brexit Affected VAT in the United Kingdom?
All goods shipped into the UK from other countries are subject to their importation rules. When Printify clears merchant orders through customs, those shipments will incur a VAT.
All products produced in the UK and shipped abroad are subject to export rules and further importation processes abroad.
5. What Are the One-Stop-Shop (OSS) And Import-One-Stop-Shop (IOSS) Systems?
Print-on-demand merchants constantly move orders across borders. Before OSS and IOSS, it was necessary to manage several legal processes within each country an order traveled between. But with the introduction of OSS and IOSS systems in July 2021, everything is streamlined by a single (one-stop) registration, avoiding a lot of paperwork.
6. Do I Have to Charge VAT to My Customers?
Generally speaking, goods and services moving are subject to some form of taxation – particularly when crossing borders. So, when one of your orders travels, it will likely incur some form of VAT (in the EU), sales tax (in America), or other tariffs. Things can become much easier to manage under the OSS or IOSS systems.
Keep in mind that all goods on Printify catalog are taxable in Europe. If you have questions about your registration obligations, we suggest you consult a tax advisor.
7. How to Prepare for VAT Collection on Printify?
The whole process can be broken into four stages:
- Submit your VAT ID(s) on your Printify account – here’s our Help Center article on how to do it,
- The VAT on your orders will be charged based on your provided VAT ID,
- On a regular basis, receive and review your VAT invoices from Printify orders,
- Submit the necessary documentation to tax authorities and include your VAT invoices to reclaim your tax returns.
8. How to Set Up VAT Collection on My Sales Platform?
Printify API
More info will follow
9. Examples of VAT Calculation
We know that taxation in general is a complex subject. To help you better understand it, we have prepared a table containing the main principles of tax calculation in Europe along with some illustrative examples.
Keep in mind that there are three main variables dictating which VAT rate will be applied to a specific order: ship-from country (print provider’s location), ship-to country (your customer’s location), and your VAT ID (country where you have registered for VAT collection purposes).
| Ship-from → Ship-to | Are you registered for VAT in Europe? | VAT rate | Example |
|---|---|---|---|
| EU → EU | ✅ Yes You have the ship-from country VAT ID |
Ship-from country rate | T-shirt, USD 10, DE → IE. DE 19% VAT is charged. Merchant pays USD 11.90 and can claim back VAT USD 1.90 in DE. Final cost is USD 10. |
| EU → EU | ✅ Yes You have any other EU country VAT ID |
0% VAT rate | T-shirt, USD 10, DE → IE. 0% VAT is charged. Merchant pays USD 10. Final cost is USD 10. |
| EU → EU | ❌ No | Ship-to country rate | T-shirt, USD 10, DE → IE. IE 23% VAT is charged. Merchant pays USD 12.30. Final cost is USD 12.30. |
| EU → EU (within the same country) |
➖ Irrelevant | Ship-to country rate | T-shirt, USD 10, DE → DE. DE 19% VAT is charged. Merchant pays USD 11.90. If registered in DE, can claim back VAT USD 1.90 in DE and final cost is USD 10. If not registered in DE, final cost is USD 11.90. |
| Rest of the world → EU | ➖ Irrelevant | Ship-to country rate | T-shirt, USD 10, US → IE. IE VAT 23% is charged. Merchant pays USD 12.30. |
| Any country → the UK | ➖ Irrelevant | Ship-to country rate | T-shirt, USD 10, PL → UK. UK VAT 20% is charged. Merchant pays USD 12.00. |
| Any country → Norway | ➖ Irrelevant | Ship-to country rate | T-shirt, USD 10, PL → NO. Norwegian VAT 25% is charged. Merchant pays USD 12.50. |
Abbreviations used: EU – European Union, DE – Germany, IE – Ireland, NO – Norway, PL – Poland, UK – the United Kingdom, US – the United States of America, VAT – value-added tax.
Examples are calculated in accordance with value-added tax rates and regulations on August 20, 2021.
10. Where Can I Get Tax Advice?
Keep in mind that Printify does not provide legal, tax, or compliance advice. Instead, we strongly encourage you to reach out to licensed tax consultants. Printify merchants will also receive a reduced registration fee, read more here.
Disclaimer: We strongly recommend you consult a licensed tax specialist for advice on value-added tax and regulations.
Make It Happen Today!
Written by
Claire Beatley
Share the article
Topics
63 comments
Thanks Martha for all you platinum tax information. Because of your new IOSS system I am going to stick with Printify and sell not only in North America, but the UK as well. So as I understand it, you will charge the VAT to me and not my end customer. So does that mean I don’t have to file any tax’s for items sold in the U.K.? Thanks
Hi there Bryan!
VAT is charged both to the merchant and the customer. In contrast to sales tax, VAT is applied at all stages of the transaction chain. This means that there is no double charge of VAT, yet the charge is applied at different parts of the chain transaction.
While Printify charges VAT on the order to you, you are responsible for collecting VAT on the part of your sale to the end customer, respectively. In this instance, Etsy does that on your behalf. Please see more information here and here.
Can you guys PLEASE include the DATE when this type of article is published, because tax rules change, and 2-3 or 5 years from now someone is searching for this type of information and there is no info on what year this information is written.
Hi Sven,
Thank you for bringing this up! I have shared your feedback with the responsible team, who will see what can be done to improve this.
I believe Etsy collect VAT and Printify also collects VAT from buyer which is collect VAT twice is wrong
Read this
https://blog.stamps.com/2021/06/21/shipping-to-eu-new-vat-rules-starting-july-1-2021/
I think Printify misunderstood the concept of VAT. I don’t think there is such thing as double taxation shipping to Europe.
Europe only collect VAT once and if the item is valued above $150 then there is VAT and custom duties.
Etsy already collects VAT if you sell on Etsy and Printify can use that paid VAT to clear custom faster…
Etsy already collect VAT so you do not have to pay VAT again. Since, the information isn’t clear and Printify not using the VAT already collected by Etsy to make the shipping faster. Printify attempt to collect VAT again for their IOSS for a faster shipping service..
I think you misunderstood this Printify
You only pay VAT once and usually the customer already pay at check out.
Use the VAT paid by the customer at checkout to generate the IOSS. Don’t collect VAT again to generate the VAT.
Based on stamps a professional in shipping and a giant in this kind of business. They know what they are doing..
You only pay VAT once… VAT is collected beforehand selling on Etsy because at times the customer may be surprised by the price of VAT ( or if she or he does not have enough to pay for VAT ) and thus may reject the item and the seller take full responsibility and is forced to pay for the cost and provide a full refund…
That is why VAT is collected beforehand on Etsy… Printify is wrong in collecting VAT again… Do your homework better Printify (:
Let say you don’t pay for VAT as a seller and the buyer doesn’t pay for VAT as well.. and you ship the item to the customer..
The item will arrive at the country of destination.. but the buyer cannot take the item until he or she pays for the VAT and + custom duties if the item is above $150 euro..
That’s it..
Hi Adan,
Unfortunately, at the moment we cannot pass Etsy or other marketplace IOSS ID numbers further to customs, even though marketplaces have collected VAT. Hence, in order to speed up Customs process we clear the goods through our own IOSS ID and because of this we have to charge VAT to the merchants. Nonetheless, we are working on fixing the feature of passing marketplace IOSS IDs to customs.
I’ve read through most of this article and the comments and am astounded. People are right – this is double taxation and criminal for sure, but Printify aren’t to blame here. Poor Martha for copping all this abuse. From my understanding, Etsy is charging VAT to customers on top of the final sales value, independent of the charge from the merchant, so no-one is losing any profit here. I.E., if the item is listed for $20 plus postage, on check out the VAT charge will be added on top of the item and postage in the shopping cart. No VAT will be deducted from the $20. Please let me know if I got that wrong. If I understand correctly, Printify has been forced to participate in this double taxation, to ensure that it isn’t the customer who bears the full brunt and is only charged once, and also to ensure items aren’t held up in customs.
Given that there is no way to avoid the double taxation, I would prefer Printify did as they are doing, keep items moving and not sitting in customs with bureaucrats, and ensure the customer isn’t slugged 50% taxes on top of their order. But what a disgrace. Everyone should be levelling this anger at the greedy politicians who would be dragged out of their parliaments in previous generations, and not at Printify.
Note, I have happened across this looking for info on taxes, as I was very concerned about unknown taxes and also about customs charges which I don’t want to surprise customers with. This article has helped, so we can at least add a buffer to account for worst-case scenario, and I assume due to Printify’s handling of this to automatically clear items customers will not be charged any customs fees either (please clarify if wrong).
The other part of this that is absolutely criminal, is that I bet China gets a free pass. In my country it is obviously cheaper for China to post items here from overseas than it is for us to post a letter down the road. Otherwise, they wouldn’t be able to sell $2 items with free international shipping. The politicians should be looking at a day of reckoning for this double-taxation, profiteering off their own citizens while exempting a communist country, and everything else.
Hi there,
Your understanding of the topic is correct, and thank you for sharing your insight on this!
Hi Martha,
I’m a little confused with the whole sales tax and VAT? I’ve just started selling POD using Printify through Etsy, (I’m based in the UK). I’m a sole trader and therefore do not have a VAT ID. I’ve made my first sale to a UK customer through Etsy using a US POD supplier and to my horror I’ve noticed a VAT charge on the printify order as well as VAT added to the end sales price on Etsy? Together with high shipping costs from the US to the UK, how on earth can this be profitable where the shipping costs are equivalent to the production costs and two lots of VAT added on? Still not sure whether I should be submitting a USA sales tax exemption certificate, I’ve submitted and Etsy sales tax exemption form however I’m not sure if that’s right and it seems that I can’t reclaim the VAT applied by Printify as I’m a sole trader which I need to account for on the final purchase price on Etsy together with the VAT charged by Etsy in the UK at 20%? All of this would result in an un-competitive sales price for the shipped product, am I missing something here? Can you please advise?
Regards,
Ian
Hi Ian,
First, please keep in mind that Sales Tax is something entirely different to EU VAT. Printify is collecting Sales Tax on all orders being fulfilled within the US. If you are using Etsy, you can submit Etsy Sales Tax Exemption letter to us, and that way you may be exempt from all automatic Etsy orders. You can find out more about it here.
Second, VAT will be charged to the products going to the UK as well, the same way it would be if the products were going to the EU or Norway. Unfortunately, if you are not a registered VAT payer, you won’t be able to reclaim this UK VAT. Same will apply to items manufactured in the UK.
We are obligated to charge VAT on our sale to you, so you may want to reassess your need to register as a VAT payer in the UK if this indeed becomes a major issue and your key target market is the UK.
For more detailed advice, you should consult with a tax specialist, as they will be better equipped to provide you with advice which best suits your business and interests.
Hi
I have an Etsy shop, and I am from Israel.
So, if I understand correctly – if I will not use any of the European printers and will sell only to the USA, I will not be charged VAT by you?
Do I have to put my VAT ID in this case?
I still do not understand how one product can be charged twice for VAT (once to the seller by Etsy, and once by you), and please don’t use that copy-paste answers again…
Hi Ayelet,
Yes, if you are not using any of the European print providers and are not selling within the EU, then VAT won’t be charged. If you have a VAT ID, you may provide it to Printify either way, however, if you don’t intend on selling within the EU, there’s no need.
In contrast to the US sales tax system, a VAT charge is applicable at each stage of an order’s production. And to put it simply, Printify is obligated by the law to collect VAT on EU orders.
So the work around for this, for those of us using Etsy, is to use a European printer for orders coming from Europe? Do we need to use one in the same country as where the item is being delivered, or any European country?
Hi Megan,
You can switch to a European print provider, in which case we will still charge you VAT if you are not registered as a VAT payer. And as long as you are not registered somewhere in Europe as a VAT payer, you will have to take the cost of VAT we charge.
Hi,
I’m new to selling and running my own business so I’m not entirely sure how tax works in the UK. It is my understanding that I can earn up to £12500 before I am required to pay tax. So does that mean I can reclaim the tax Printify and Etsy will be charging me unless it goes over that £12500? Are there certain tax details I can submit to you so your system can automatically calculate and remove any tax charges until I reach that threshold or is that not how it works?
Many thanks,
Chris
Hi Chris,
Printify will charge VAT on sales in the UK where applicable, regardless of the status of the buyer. Generally, businesses that are not registered as VAT payers cannot recover VAT incurred on purchases. Once the business is registered as a VAT payer, it may have a right to reclaim the VAT amounts charged to them depending on the usage of the purchased items and several other factors.
As we are not tax advisors ourselves, for further guidance you should contact a qualified tax advisor or HMRC directly.
Hi if I am using a Printify UK Merchant and shipping to an address in the UK, will taxes be charged?
Hi Jason,
In this scenario, you would be charged the UK VAT.
If an item is made in one of the European countries does this extra VAT charge apply?
Hi there,
If an item is produced in the EU, we will apply a VAT rate which will depend on the ship-from/ship-to location, as well as the registration status of our customer, i.e. the merchant.
Can I just send the price and the IOSS’s number of every order each time I submit them on Printify? So I (the merchant) would not have to be charged?
Hi Kurtis,
No, this will not work.
I sell pretty much all of my stuff on Amazon, Amazon automatically deduct the VAT for my sale before I see any of the money, so does that still entail that I have to pay VAT with Printify for my orders for example in Germany to ship to Germany as well as pay VAT which Amazon have already collected too?
Hi Robert,
We will charge VAT on our side, especially if it’s going from Germany to Germany (so, within one country). What Amazon charges on your behalf on the sale to the final consumer (your customer) is in no way connected to our sale to you – the merchant. If you are registered in Germany, you should give us your VAT ID, and based on the invoice, you will be able to get this VAT via the VAT declaration.
If you have further questions regarding this, please do not hesitate to reach out to our merchant support team via [email protected].
From how I see it, Etsy is the problem, not Printify.
As Martha said, Shopify doesn’t collect VAT from the customer; however, Etsy has elected to do so. Printify doesn’t have the legal option to pass on Etsy’s IOSS numbers, so Etsy has put Printify and their Etsy merchants in a jam. To address this, Printify set itself up as a goods importer with its own VAT ID and is providing US-based Etsy merchants a way to avoid the inconvenience of charging tax to their buyers in the EU on the same product. Etsy could elect NOT to collect VAT, I assume, like Shopify, and avert all this, but they are Etsy, and they do what they want, and they want to collect VAT.
This isn’t something Printify is charging to make more profit, so folks can stop whining and ALL-CAPS RANTING. Read the other comments. Your answers may already be there. Think from all sides of the transaction, not just yours. This is not a set-it-and-forget-it business. Learn when and where to flex and pivot. Double taxation sucks, yes. We all know this. Ranting at Printify about it is not a good business practice, nor will it make a whit of a difference except give migraines to their merchant support team members. It’s a convoluted system made more convoluted by Etsy, so I blame them. I’m glad Printify is able to offer us an avenue to keep our EU customers happy.
Martha Simmons said “Having said that, at the moment, passing Etsy IOSS for all orders would be illegal.” WELL, THAT ISN’T TRUE. Sellers are specifically instruct to pass on the IOSS AND their specified monetary value to the delivery service TO BE PRINTED ON THE PACKAGE, in order to prove that VAT has already been paid by the customer and they are not charged a second time. Etsy issues a statement to the seller “You must share Etsy’s IOSS number, IMxxxxxxxxxx, with your courier for this order (use it only for this purpose)” So again, PRNITIFY IS ILLEGALLY COLLECTING A “TAX” FROM SELLERS under the guise of collecting VAT on the behalf of unspecified governments from buyers. Is that money even going to be forwarded to any government authority, because right now I have to question that.
Hi Vanessa,
The role of importer of goods will be assigned to Printify for all imports into the EU, irrespective whether such sales are made through Etsy or other sales channels. Printify will collect VAT on the sale to merchant, report and pay over this VAT through IOSS tax declaration to the respective tax authority. Furthermore, Printify IOSS ID number will be reported on all packages imported into the EU to ensure the goods are not subject to VAT charge by the customs authorities of the EU again.
If you have further questions regarding this, please reach out to our merchant support team via [email protected], and our agents will be more than happy to address all your questions.
Can I ask a second. If someone buys flip-flops off me @ £13.99 – 20% discount is £11.19. plus postage of £4.32 and that was charged at US$ 16.98 to my card, how much VAT would AOP+. add to that please? [print and delivery in UK].
I guess the questions are () VAT is on Origingal Price or reduced price? () Postage has/has not VAT? and. () is the net then converted to USD and charged to my card who convert it back to £ and charge for conversion?
Thanks
Hi James,
In this case the discounted price will be subject to VAT; shipping/postage will be subject to the same VAT rate as the flip-flops (so both at 20% VAT for the UK); and all charged will take place in USD, since we currently do not support other currencies. On the VAT invoice, you will see the GBP amount converted for tax reporting purposes only.
If you have further questions, feel free to reach out to our merchant support team via [email protected].
if we put ETSY’s IOSS number in to Printify surely you wont charge VAT knowing that ETSY will…?
Hi James,
No, that does not work that way, unfortunately. While we may know that the order is coming from Etsy, we cannot pass this information onwards, so people who print labels and declare customs don’t know whether it’s coming from Etsy or someplace else.
hello. i am confused with the double talk. VAT is supposed to be collected from the buyer. yet PRINTIFY IS GOING TO CHARGE THE SELLERS, because apparently etsy will be charging the buyers on behalf of the seller when the purchase goes through. THE PROBLEM WITH THAT IS THAT ETSY DOES NOT PASS THE VAT COLLECTED ONTO THE SELLER therefore printify will be illegally collecting a “tax” from the seller under the guise of VAT.
Hi Vanessa,
Thank you for your feedback!
I want to clarify that this is just in the case of Etsy. Store platforms like Shopify, for example, or if you place manual orders, do not collect VAT. When it comes to Etsy, due to the limitations of the technology, all we can do is pass a single IOSS ID to the print provider for all orders, as the print provider does not know which orders come through which channel.
Having said that, at the moment, passing Etsy IOSS for all orders would be illegal. Passing nothing would currently mean that your customer is being charged twice. However, passing our number for all orders and tax them would mean that at least the final consumer is not charged twice and parcels are cleared.
Ok, just to clarify – you are not charging our customer twice thats correct, but each item is double taxed, and its going out from the pocket of your customers – us. Now, you could take the IOSS we provide via Etsy for example, and I do not see why not. I cannot register in Europe, because that’s ridiculous, and I for sure don’t want to pay your partners Simply Vat that you are advertising here. In my case – it’s not worth it. I will stop sales to EU. As I see it, many will. We are def loosing customers, but so are you. I believe that by the holidays time you might come around when someone calculates that importing Etsy number costs less than loosing all the EU income.
Hi Anna,
I appreciate your feedback on the matter. At the moment, there is no solution to transfer Etsy IOSS IDs directly to our print providers, therefore we have to use this approach. That being said, we are going to add more print providers and products in Europe, so then you will be able to use those for product fulfillment within Europe without worrying about the VAT.
Will there be a VAT cost built into the Printify API when you create an order?
For people that have custom integrations that don’t use Etsy, Shopify, WooCommerce et al, can you simply include the VAT cost as a property of the order object, so that it is calculated automatically based on whatever the shopper checks out?
Hi Ben,
Not really. You will see VAT charged by us to you at checkout when you will place a manual order. But we will not be calculating or displaying any taxes on your behalf on your side to your customers.
Hello, so this is my situation. I have an Italian VAT ID but I only sell in the USA by USA print providers (and with Etsy imported orders). As I understand, I don’t pay any VAT to you, so nothing change for me, right?
Hi there,
As long as there are no operations in Europe, there is no VAT that you need to worry about.
Are you double charging Etsy sellers? Since Etsy already collects VAT, if Printify charges Etsy sellers VAT again, we are getting double charged VAT and make no profit. How are you handling VAT charges for Etsy sellers? What would you recommend we do so as not to be double charged? Thank you, I greatly appreciate your help.
Hi Erin,
When it comes to VAT, Etsy sellers are not being double-charged. Etsy charged VAT to your customer. Here’s how this works:
To prevent the final consumer (your customer) being charged twice and parcels being stuck in customs, we – Printify – will put all our sales importing into the EU through our IOSS. We will pass our values and IOSS ID’s to customs, so orders are cleared automatically, and the final consumer is not charged VAT again by the customs.
This means that we will charge VAT to you – the merchant. However, Etsy will charge VAT to the final consumer on your behalf.
Please keep in mind that there is no system of exemptions in Europe similar to the US, so such imports into Europe will be charged on both steps of the transaction. Whether you can reclaim the VAT we charge you will depend on your registrations and right to reclaim VAT in general. But to find out if this applies to you, it is something you should address with advisors or Simply VAT.
We need you to clarify Etsy Orders, which Etsy already collects VAT
Hi there,
Etsy is already collecting VAT from your customers on orders that are being shipped to the European Union, Norway and the United Kingdom.
question #6 – Do I have to charge VAT to my customers – was not answered at all. I would expect an answer to be something like YES if your selling platform does not collect and remit VAT for you and NO if your selling platform does collect and remit VAT for you and as another option – NO – you can decide not to sell to other countries and thus avoid paying VAT taxes. What we really need to know is do you have a system set up that will automatically pull in the VAT ID # / info from Etsy (or other platform that is already collecting VAT) and then NOT charge us VAT on those orders or will we be charged for VAT anyway even if it’s collected elsewhere?
Hi Julie,
Thank you for your feedback! The reason why there is no one answer is that it really depends on each merchant’s individual situation, sales volumes, location and many other factors. To find out how this affects your business specifically, you really should consult an advisor or Simply VAT.
As for us having an automatic system in place, here’s how it will work:
To prevent the final consumer being charged twice and parcels being stuck in customs, we – Printify – will put all our sales importing into the EU through our IOSS. We will pass our values and IOSS ID’s to customs, so orders are cleared automatically, and the final consumer is not charged VAT again by the customs.
In terms of tax changes, this means that we will charge VAT to you – the merchant. However, for example, Etsy will charge VAT to the final consumer on your behalf.
Please keep in mind that there is no system of exemptions in Europe similar to the US, so such imports into Europe will be charged on both steps of the transaction. Whether you can reclaim the VAT we charge you will depend on your registrations and right to reclaim VAT in general. But to find out if this applies to you, it is something you should address with advisors or Simply VAT.
I would also like to hear how Printify is handling it for the Etsy platform as Etsy collects VAT on the retail price and provides and IOSS number.
Hi Annette,
To prevent the final consumer being charged twice and parcels being stuck in customs, we – Printify – will put all our sales importing into the EU through our IOSS. We will pass our values and IOSS ID’s to customs, so orders are cleared automatically, and the final consumer is not charged VAT again by the customs.
In terms of tax changes, this means that we will charge VAT to you – the merchant. However, for example, Etsy will charge VAT to the final consumer on your behalf.
Please keep in mind that there is no system of exemptions in Europe similar to the US, so such imports into Europe will be charged on both steps of the transaction. Whether you can reclaim the VAT we charge you will depend on your registrations and right to reclaim VAT in general. But to find out if this applies to you, it is something you should address with advisors or Simply VAT.
Yes, same question as above. We can submit for tax exemptions though US Etsy sales since Etsy collects the tax on purchase. Will the same exemption be applied to international sales since Etsy automatically collects VATS for those as well?
The question is whether or not the IOSS info Esty provides will be automatically sent to the companies producing our orders and placing the IOSS info onto their shipping labels? Last I checked there was no way to provide the IOSS info to them. I would think this would be a simple update to the application Printify has setup up with Etsy. At the end of the address info area would be easiest I would think.
Hi Ken,
To prevent the final consumer being charged twice and parcels being stuck in customs, we – Printify – will put all our sales importing into the EU through our IOSS. We will pass our values and IOSS ID’s to customs, so orders are cleared automatically, and the final consumer is not charged VAT again by the customs.
In terms of tax changes, this means that we will charge VAT to you – the merchant. However, for example, Etsy will charge VAT to the final consumer on your behalf.
Please keep in mind that there is no system of exemptions in Europe similar to the US, so such imports into Europe will be charged on both steps of the transaction. Whether you can reclaim the VAT we charge you will depend on your registrations and right to reclaim VAT in general. But to find out if this applies to you, it is something you should address with advisors or Simply VAT.
I also want to know what happens with Etsy sales since they collect VAT and submit it to the applicable government. This article sounds like Prinitfy will collect it also. Please explain how this is going to work.
Thanks.
Hi William,
Here’s how it will work: in order to prevent the final consumer being charged twice and parcels being stuck in customs, we will put all our sales importing into the EU through our IOSS. We will pass our values and IOSS ID’s to customs, so orders are cleared automatically, and your customer is not charged VAT again by the customs.
This means that we will charge VAT to you – the merchant. However, sites like Etsy will charge VAT to your customer on your behalf.
Please keep in mind that there is no system of exemptions in Europe similar to the US, so such imports into Europe will be charged on both steps of the transaction. Whether you can reclaim the VAT we charge you will depend on your registrations and right to reclaim VAT in general. But to find out if this applies to you, it is something you should address with advisors or Simply VAT.
Is there a way to integrate Etsy’s numbers as they’ve been collecting VAT from our customers? I don’t want to encounter double charges. (Similar to how you handled sales tax with Etsy).
Hi Christine,
To prevent the final consumer being charged twice and parcels being stuck in customs, we – Printify – will put all our sales importing into the EU through our IOSS. We will pass our values and IOSS ID’s to customs, so orders are cleared automatically, and the final consumer is not charged VAT again by the customs.
In terms of tax changes, this means that we will charge VAT to you – the merchant. However, for example, Etsy will charge VAT to the final consumer on your behalf.
Please keep in mind that there is no system of exemptions in Europe similar to the US, so such imports into Europe will be charged on both steps of the transaction. Whether you can reclaim the VAT we charge you will depend on your registrations and right to reclaim VAT in general. But to find out if this applies to you, it is something you should address with advisors or Simply VAT.
Yes, what should we do??????????????????
Hi Sarit Shay,
To prevent the final consumer being charged twice and parcels being stuck in customs, we – Printify – will put all our sales importing into the EU through our IOSS. We will pass our values and IOSS ID’s to customs, so orders are cleared automatically, and the final consumer is not charged VAT again by the customs.
What this means for you is that we will charge VAT to you – the merchant, but sites like Etsy will charge VAT to your customer on your behalf. That said, please keep in mind that there is no system of exemptions in Europe similar to the US, so such imports into Europe will be charged on both steps of the transaction. Whether you can reclaim the VAT we charge you will depend on your registrations and right to reclaim VAT in general. But to find out if this applies to you, it is something you should address with advisors or Simply VAT.
I have the same question as Dima in regards to Etsy orders since they now collect VAT. Do you (Printify) receive Etsy’s IOSS number and will this number get passed to couriers so that our customers do not get charged VAT twice? Any help would be greatly appreciated, thanks!
Hi Bevis,
We will put all our sales importing into the EU through our IOSS. We will pass our values and IOSS ID’s to customs, so orders are cleared automatically, and your customer is not charged VAT again by the customs. This means that we will charge VAT to you – the merchant. However, Etsy will charge VAT to the final consumer on your behalf.
Please keep in mind that there is no system of exemptions in Europe similar to the US, so such imports into Europe will be charged on both steps of the transaction. Whether you can reclaim the VAT we charge you will depend on your registrations and right to reclaim VAT in general. But to find out if this applies to you, it is something you should address with advisors or Simply VAT.
So what if I don’t have a VAT number? Am I not allowed to sell in other countries?
Hi there,
You can still sell anywhere in the world as you please, we will have to charge you VAT regardless if you are registered or not. You just have to keep in mind that you won’t be able to reclaim any of the charges, because there is no system of exemptions in Europe similar to the US. You should still consult with advisors or Simply VAT, to better understand how all of this will exactly apply to your specific situation.
Please clarify what happens with orders going via Etsy platform (Etsy collects taxes for few months now).
Hello Dima,
To prevent the final consumer being charged twice and parcels being stuck in customs, we – Printify – will put all our sales importing into the EU through our IOSS. We will pass our values and IOSS ID’s to customs, so orders are cleared automatically, and the final consumer is not charged VAT again by the customs.
In terms of tax changes, this means that we will charge VAT to you – the merchant. However, for example, Etsy will charge VAT to the final consumer on your behalf.
Please keep in mind that there is no system of exemptions in Europe similar to the US, so such imports into Europe will be charged on both steps of the transaction. Whether you can reclaim the VAT we charge you will depend on your registrations and right to reclaim VAT in general. But to find out if this applies to you, it is something you should address with advisors or Simply VAT.
Will this lead to a small drop in prices at the European printers (since they have been paying VAT this whole time, but included it in the price of goods)???
Hi there,
The prices may become cheaper if you are a registered VAT payer. Then you will be able to reclaim the charges where applicable. However, to find out if this applies to you, it is something you should address with advisors or Simply VAT.