Effective July 1, 2021, Value Added Tax (VAT) must be collected for all goods entering the European Union (EU) from the U.S., including goods under 22 euros (approximately $26). The VAT ranges from 17% to 27% depending on the EU member state, not including any applicable duties or customs fees.
Any owed VAT, duties, or customs fees will be collected from the recipient/buyer, unless already collected by the shipper or online marketplace (such as eBay or Amazon). Current procedures for goods valued over 150 Euro (approximately $178) remain the same.
Endicia is advising shippers to take the following steps to prevent EU-bound shipments from being delayed, held, returned, or abandoned:
- Set shopper expectations on whether VAT, duties, and fees will be paid during the checkout process, or at some point afterwards. If not paid at checkout, these added costs may exceed the merchandise’s value causing the buyer to abandon the package.
- Collect the recipient’s phone number or email address at checkout, and include it with every outbound shipment. This helps customs resolve issues and collect any owed amounts.
- Collect VAT during the checkout process and remit monthly payments to participating EU-member states via the Import One-Stop Shop (IOSS) electronic portal. This requires contracting with an EU-based tax intermediary, as well as IOSS registration. Get more info for how to register for the IOSS at the official European Union IOSS website located at https://ec.europa.eu/taxation_customs/business/vat/ioss_en.
- Include detailed customs information with every outbound shipment to the EU, to make customs clearance as smooth as possible. This now includes the applicable IOSS number (belonging to either the shipper or the online marketplace), in addition to HS tariff codes, country of origin, customs description, etc. GlobalPost logistics has a free tool to research HS tariff codes for all products at https://www.goglobalpost.com/hs-code-lookup-tool/