EU TAX & DUTY REQUIREMENTS

VAT

Value Added Tax (VAT) threshold for the EU is EUR 0.

VAT is required to be paid on all parcels originating outside of the EU and destined for the EU regardless of the value of the goods.

SEKO strongly recommends utilising a DDP service and obtaining an IOSS (Import One-Stop Shop) number and collecting VAT at checkout to avoid transit delays, slowed clearance, and additional fees, which often lead to refused or abandoned packages and a negative customer experience.

DUTY

The Duty threshold for the EU is currently set to EUR 150.

SEKO recommends retailers utilise a Delivered Duty Paid (DDP) service to facilitate fast delivery of a high volume of parcels to end customers in the EU.

AS THE SELLER OF GOODS, YOU'LL NEED TO:

• Register for an IOSS number (Import One-Stop Shop)

  An IOSS number is recommended if you are shipping a high volume of parcels into the EU. The aim of the IOSS is to allow packages to clear customs quickly to facilitate timely delivery.  All VAT payable on items up to EUR150 is automatically billed to the retailer's IOSS account upon entry.

COLLECTION OF TAXES AND DUTIES

SEKO suggests retailers collect taxes and duties from customers at shopping cart level.  An example of platforms to facilitate these services are Zonos, Shopify, Eurora and Avalara. Retailers can then use a DDP service to maximise customer experience.

With SEKO, retailers have the following EU service options...

SEKO Delivered Duty Unpaid (DDU/DAP)

The retailer's customer will be notified of VAT and any Duty charges and will be required to pay these amounts as well as a processing fee charged by the EU clearance broker.

If the end customer does not pay the VAT and Duty, the parcel must still be cleared, and these amounts will be charged back to the retailer with the parcel then forwarded on to the end customer.

SEKO Delivered Duty Paid (DDP)

For parcels valued under EUR150, all VAT will be charged to the retailers IOSS account.  If a retailer sends parcels to the EU without an IOSS, a fee of EUR3.50 per parcel will be charged.

For parcels valued over EUR150, all VAT and Duty fees will be charged directly back to the retailer.