Complete IOSS solutions for Shopify businesses

How will IOSS affect Shopify businesses?

The new VAT and import scheme changes made by the European Union will have a significant impact on eCommerce distance sellers worldwide who export goods to EU customers, such as those who operate on Shopify.

Where other marketplaces are Import One-Stop-Shop registered, meaning businesses using the platform can use the marketplaces IOSS number, Shopify is not, and therefore it will require e-tailers and merchants using the electronic interface wanting to register for the IOSS scheme, to register individually.

For businesses that are established in the EU, they have the choice of registering for the OSS (One-Stop-Shop) directly or either an IOSS intermediary. However, those who are not established in the EU, like many Shopify businesses, will need to register for an IOSS fiscal intermediary (or representative) who is registered in the EU, who can declare and pay tax on the seller's behalf.

If your Shopify business needs IOSS representation, look no further than Ship24 for stress-free IOSS registration and ensure you meet all of the new EU VAT obligations with the shipping experts.

What are the benefits of the new IOSS for Shopify businesses?

The new Import One-Stop-Shop system is designed to benefit both buyers and sellers, by simplifying procedures and reducing administration when it comes to eCommerce sales within the EU. Although the new rules will see the scrapping of the 22 EUR de minimis, meaning that all goods valued at 150 EUR or less will now be taxed, the system will remove hidden fees for customers and make customs processing more efficient.

Ship24 has also now launched an app specifically designed to help businesses capture the correct data they need for sales which need to be declared to the EU under IOSS. The Ship24 Shopify apps means that businesses will automatically send the information it needs for us to create their declaration, removing much of the admin previously required from business to meet their EU IOSS obligations. Talk to our expert team for more information in the chat box on screen or email to see how we can get your Shopify business up and running!

Where will my Shopify business pay VAT under the IOSS scheme?

One benefit for Shopify businesses is that they no longer need to pay VAT in multiple EU states where they sell goods. Although under the new IOSS scheme, distance sellers must charge VAT on all goods sold to EU buyers set by the country in which they reside. The IOSS system will mean they can register in one EU member state, where they can declare and pay all owed VAT, EU-wide. The merchant is then only required to electronically submit VAT returns via the IOSS portal to meet EU obligations, making sure that they keep full sales and VAT records for at least 10 years.

How has Shopify responded to the introduction of the IOSS?

Shopify has updated tax settings within its platform which means it will charge the VAT rate which corresponds with the location of any consumer within the EU. Shopify is urging sellers who use the platform to display VAT for buyers in one of three ways:

• Tax settings: Check that in your Shopify tax settings page on your business account, you have ticked the box which allows for tax based on the customer's country to be included in the final price.
• Utilize a country selector to make sure EU buyers can view local country pricing. This can be done by installing the Geolocation app from Shopify, which will ask customers to confirm their location before viewing your shop.
• Using the same Geolocation app, you can also opt to have a country selector built into your Shopify store theme which will automatically generate the correct VAT.

Sellers must note, however, that Shopify is not a marketplace or a facilitator. Therefore, Shopify will not be registered for the IOSS scheme and will not have an IOSS number that can be used by sellers who use its platform.

Should I register for IOSS as a non-EU Shopify business?

It is recommended that distance sellers who are not based in the EU apply for the IOSS scheme with a competent IOSS fiscal intermediary, such as Ship24, to ensure they take full advantage of the benefits which the scheme has for both buyers and sellers.
These advantages include:

• Full VAT payment transparency for merchants and consumers, removing hidden fees
• Better post-purchase experience for buyers and sellers
• Faster customs processing times which means faster delivery times
• Simplified VAT payment system
• EU wide VAT payment through a single IOSS portal
• Potential phasing out of DDU and DDP delivery methods / with IOSS shipping prioritized

How do I submit IOSS Shopify sales?

The tax settings in Shopify must be updated with your Import One-Stop-Shop / IOSS number which will allow you to submit a single VAT remittance for all of the EU.

IOSS Shopify businesses will be required to file a single monthly VAT return for all low-value exports to the EU (with the value of 150 euros or less) via an IOSS intermediary, which must be appointed by all non-EU businesses wishing to use IOSS.

Shopify IOSS businesses will need to choose whether submit a VAT return for all of the EU (One Stop Shop filing) or remit a separate VAT return for every EU country that you ship to (Country specific registration). Update your tax settings in Shopify based on the choice that makes the most sense for your business.

How can I register for Shopify IOSS?

Ship24 is offering one of the most complete IOSS solution packages for non-EU businesses, with stress-free IOSS transition and full fiscal intermediary representation guaranteed. Ship24 has a wealth of experience within the shipping sector and specializes in logistics, cross-border delivery, and shipment tracking. We have brought that experience into our new partnership with the EU-based CLEFINO to offer a truly market-leading IOSS solution for businesses of any size, with competitive pricing and a dedicated support team to ensure we provide best-in-class service.

What is the best country to register with an IOSS in?

You can register with an IOSS intermediary which is registered in any EU country, as all IOSS Shopify VAT - or VAT payable under the IOSS system - is made in only one EU member state regardless of the number of EU countries in which you sold goods. While VAT rates will vary between member states, all outstanding VAT will be paid in the country with which the IOSS intermediary is registered with.

How will the EU VAT rules affect my Shopify business if I do not sign up for IOSS?

If you do not sign up for the Import One-Stop-Shop and are not an IOSS registered Shopify business, you can still export goods to the EU using the Delivery Duty Unpaid or Delivery Duty Paid method. The IOSS scheme is optional, however, it is designed to be advantageous for buyers and sellers and therefore, should be considered by online businesses and e-merchants who often sell goods at and below the 150 EUR threshold in the EU. Some businesses should check if they are selling on an IOSS registered marketplace as if they are, they can use the IOSS number of their marketplace (such as Amazon and eBay).

Does Shopify VAT apply to orders including tax or excluding tax?

The 150 EUR threshold does not include tax and only concerns the value of the goods being sold. Therefore, it also excludes insurance and transport costs, unless they are stated as included in the price and not as additional payments on the invoice.