Ordering from LTT store from EU - the extra tax added in checkout and required IOSS certificate

[Just that Mario]

Just wondering if anyone has had their IOSS certificate issue fixed while ordering from LTT store? I have seen old posts of people having the issue, but that was months ago. I am surprised LTT is still adding tax to EU orders without providing the IOSS certificate, essentially making us pay double tax. Ordering is already damn expensive and seeing as I was hit with double tax makes it all worse. I still cannot believe I spent 60 euros on a water bottle. I had already created a ticket to LTT store support, but haven't had a reply. Because I am impatient and so is the local customs and shipping company, I just paid the tax again.

I checked order from another e-store (seems to be using same platform as LTT), which comes from Australia and not only is shipping cheaper in general, but there's also no extra tax. There are also e-commerce stores that apply the tax, but then mark packages as pre-paid and they are released from customs automatically. So it must be some LTT store configuration error.

[whm1974]

Is the Value Added Tax every time I read about the sort of "Sales Tax" Citizens in Canada and the EU have to put up with when buying anything? Thankfully People in the US don't have it.

[Just that Mario]

18 minutes ago, whm1974 said:

Is the Value Added Tax every time I read about the sort of "Sales Tax" Citizens in Canada and the EU have to put up with when buying anything? Thankfully People in the US don't have it.

What do you mean? US also has tax on goods purchased, it just isn't in the original price, but added afterwards - hence the memes about americans doing math to know how much end cost will be?

I was taxed 20% during checkout and another 20% by local customs because LTT store fails to supply information that the tax has already been paid.

[DoctorNick]

8 minutes ago, Just that Mario said:

What do you mean? US also has tax on goods purchased, it just isn't in the original price, but added afterwards - hence the memes about americans doing math to know how much end cost will be?

I was taxed 20% during checkout and another 20% by local customs because LTT store fails to supply information that the tax has already been paid.

Seriously @LinusTech

[maplepants]

1 hour ago, Just that Mario said:

I was taxed 20% during checkout and another 20% by local customs because LTT store fails to supply information that the tax has already been paid.

The tax wasn't already paid though. LTT store doesn't collect VAT. You paid the taxes LTT owes for selling stuff in BC, and then you still owe VAT on top of that.

[Just that Mario]

1 hour ago, maplepants said:

The tax wasn't already paid though. LTT store doesn't collect VAT. You paid the taxes LTT owes for selling stuff in BC, and then you still owe VAT on top of that.

That doesn't make any sense and from older posts, it seems "taxes" portion used to be 0 when ordering from EU until recently. Also it seems in past some have received refund and LTT store support verifying that the taxes charged is a mistake. There is absolutely no reason customer should pay taxes twice or for taxes the seller owes someone.

It clearly labels "taxes" on the receipt and only extra taxes customer is liable for is the "VAT".

EDIT: The link you posted says customs and duty fees in shipping costs. Checkout still collects VAT, just as it is for any regular purchase.

[tikker]

1 hour ago, Just that Mario said:

I was taxed 20% during checkout and another 20% by local customs because LTT store fails to supply information that the tax has already been paid.

Which country are we talking about and does this happen to line up with your import fees?

  

51 minutes ago, maplepants said:

The tax wasn't already paid though. LTT store doesn't collect VAT. You paid the taxes LTT owes for selling stuff in BC, and then you still owe VAT on top of that.

Could it be the payment provider doing it? International shipping has always been a major pain in my experience. They say that, but there's still cases like this one where the tax rate lines up with the import tax. I chalk it up to poor communication between customs and some 3rd party responsible, because I've even had this happen with stuff from the UK to NL where the seller expicitely did include prepaid import tax only to be charged again upon arrival. Taxes are annoying.

[Just that Mario]

22 minutes ago, tikker said:

Which country are we talking about and does this happen to line up with your import fees?

Estonia and I am not sure what do you mean under import fees. Ever since June or July of 2021 every goods, no matter the cost, are subject of VAT when imported outside of EU. IF the VAT has been paid prior, the seller must register it and customer no longer has to pay for it. Orders from China have tax and upon arrival the customs releases packages automatically. Orders from Australia haven't had tax on checkout and I have paid the tax when package arrives to local customs. Now I ordered from LTT store - surprisingly an USA company handles it for them and I was hit with tax on checkout and tax at customs. Both come to 20% of package's value (9 USD on checkout and later 7.96 EUR at customs). On some Googleing I found that it has happened before, but not much information as if how it was resolved or what. Only one person wrote that LTT store support had claimed it was an error on their side and refunded the tax portion.

PS: It was 7.96 euros because I didn't include the original 9$ tax I was charged in total cost of goods. It seems to me that whoever is doing shipping for LTT store messed up or their checkout system is acting up.

EDIT: Extra import and customs fees only apply if goods are over certain value, think 150 euros and I've had customs ignore it if it is only a few euros over or something. I forgot about that. But that doesn't apply in this case.

[tikker]

26 minutes ago, Just that Mario said:

Estonia and I am not sure what do you mean under import fees. Ever since June or July of 2021 every goods, no matter the cost, are subject of VAT when imported outside of EU. IF the VAT has been paid prior, the seller must register it and customer no longer has to pay for it. Orders from China have tax and upon arrival the customs releases packages automatically. Orders from Australia haven't had tax on checkout and I have paid the tax when package arrives to local customs. Now I ordered from LTT store - surprisingly an USA company handles it for them and I was hit with tax on checkout and tax at customs. Both come to 20% of package's value (9 USD on checkout and later 7.96 EUR at customs). On some Googleing I found that it has happened before, but not much information as if how it was resolved or what. Only one person wrote that LTT store support had claimed it was an error on their side and refunded the tax portion.
 

I don't know about Estonia, but every good (except those exempt of course) has always been subject to VAT here. It's just a matter of who pays it, but you'll never get away without paying it. On top of that there can  be import fees/custom duties for importing said good into your country. Importing something to the Netherlands, for example, will cost you (<product cost> + <shipping cost>> + <import fees>) * <VAT rate>

 

https://www.emta.ee/en/business-client/taxes-and-payment/value-added-tax/taxation-goods

On the Estonian tax page I think you fall in the category at the very bottom of the page here. From that table:

• The goods are located at the moment of the transfer: In third country (outside EU) and are transported to Estonia upon the transfer
• Place of supply, VAT rate and declaration, if the goods are transferred by a third country person engaged in business to: Estonian taxable person

Leading to

Quote

The transferor has the export of goods, the acquirer has the import of goods

consistent with your Australia experience. So technically I believe you are ultimately responsible for paying the taxes.

 

https://taxsummaries.pwc.com/estonia/corporate/other-taxes

From there it seems Estonia's VAT is 20%, which matches with you being charged 20%.

 

What I guess happened, and seems to happen very often, is that the payment already tries to incorporate this, but communication fails, so you are charged again upon import. The fact that it is processed through the US might exacerbate this, especially is shipping as well goes through there as that's additional customs etc. to go through and more points of failure for communication. The reason why they attempt to pre-charge you, to my knowledge, is to avoid customs slow-downs due to duties not being paid, but can lead to these kind of messes.

 

Best you can do is probably contact LTT Store and see if it can be worked out.

[Just that Mario]

13 minutes ago, tikker said:

I don't know about Estonia, but every good (except those exempt of course) has always been subject to VAT here. It's just a matter of who pays it, but you'll never get away without paying it. On top of that there can  be import fees/custom duties for importing said good into your country. Importing something to the Netherlands, for example, will cost you (<product cost> + <shipping cost>> + <import fees>) * <VAT rate>

 

https://www.emta.ee/en/business-client/taxes-and-payment/value-added-tax/taxation-goods

On the Estonian tax page I think you fall in the category at the very bottom of the page here. From that table:

• The goods are located at the moment of the transfer: In third country (outside EU) and are transported to Estonia upon the transfer
• Place of supply, VAT rate and declaration, if the goods are transferred by a third country person engaged in business to: Estonian taxable person

Leading to

consistent with your Australia experience. So technically I believe you are ultimately responsible for paying the taxes.

 

https://taxsummaries.pwc.com/estonia/corporate/other-taxes

From there it seems Estonia's VAT is 20%, which matches with you being charged 20%.

 

What I guess happened, and seems to happen very often, is that the payment already tries to incorporate this, but communication fails, so you are charged again upon import. The fact that it is processed through the US might exacerbate this, especially is shipping as well goes through there as that's additional customs etc. to go through and more points of failure for communication. The reason why they attempt to pre-charge you, to my knowledge, is to avoid customs slow-downs due to duties not being paid, but can lead to these kind of messes.

 

Best you can do is probably contact LTT Store and see if it can be worked out.

Yep, that's my assumption as well (or some genius thought that world = USA, wouldn't be first time). I also checked the customs calculations and it was 0 for customs and import, 20% for VAT. I already wrote message to LTT store support when I first got the notification to do the customs declaration, but seems it will take a while to get a response from them. It is quite sad that first reports of this issue are from 2-3 months ago (if not more) and it has been verified to being an error on LTT store side, but it still hasn't been dealt with.

For better information can also read this page https://www.emta.ee/en/private-client/consignments-travel-settlement/consignments/declaring-consignment#ioss

"Payment of taxes" section sums it all up.

[EL02]

37 minutes ago, Just that Mario said:

yeah usually when you buy stuff online and there is a "Taxes" section, it means that the taxes are paid by the seller and therefore the package will directly ship to the post office or home address with no added cost from the customs. I think you're right on this one.

[maplepants]

45 minutes ago, Just that Mario said:

That doesn't make any sense and from older posts, it seems "taxes" portion used to be 0 when ordering from EU until recently. Also it seems in past some have received refund and LTT store support verifying that the taxes charged is a mistake. There is absolutely no reason customer should pay taxes twice or for taxes the seller owes someone.

It clearly labels "taxes" on the receipt and only extra taxes customer is liable for is the "VAT".

EDIT: The link you posted says customs and duty fees in shipping costs. Checkout still collects VAT, just as it is for any regular purchase.

It's not VAT though. LTT doesn't collect VAT and can't because they're not registered to do business in the EU. I can't say whether those $9 are correct though, because I don't know what taxes they owe in BC for every sale. Just because they're shipping outside of BC, doesn't necessarily remove the entire tax burden. 

 

Obviously you should see what they write back to you about those $9 to be sure, but in terms of VAT they're pretty clear. You pay it as a customs duty when you import the item just like you would from any other imported item. 

[tikker]

2 minutes ago, Just that Mario said:

Yep, that's my assumption as well (or some genius thought that world = USA, wouldn't be first time).

It's nothing US specific really, just international shipping outside the EU woes. UK shipping has given me similar issues.

4 minutes ago, Just that Mario said:

I already wrote message to LTT store support when I first got the notification to do the customs declaration, but seems it will take a while to get a response from them. It is quite sad that first reports of this issue are from 2-3 months ago (if not more) and it has been verified to being an error on LTT store side, but it still hasn't been dealt with.

They're a small business, so just give them some time

[Just that Mario]

3 minutes ago, maplepants said:

It's not VAT though. LTT doesn't collect VAT and can't because they're not registered to do business in the EU. I can't say whether those $9 are correct though, because I don't know what taxes they owe in BC for every sale. Just because they're shipping outside of BC, doesn't necessarily remove the entire tax burden. 

 

Obviously you should see what they write back to you about those $9 to be sure, but in terms of VAT they're pretty clear. You pay it as a customs duty when you import the item just like you would from any other imported item. 

I am sorry, but you're simply incorrect on this. You seemingly do not even know difference between VAT and customs duty/import fee.

[maplepants]

3 minutes ago, Just that Mario said:

I am sorry, but you're simply incorrect on this. You seemingly do not even know difference between VAT and customs duty/import fee.

As soon as you buy a product from a non-EU country, then effectively you become an importer and become liable to Customs and Excise Duty as well as Value Added Tax (VAT) payments. If the terms of sale do not specify another arrangement, the goods would normally be held by the Customs Authority at entry, pending the payment of duty and tax.

Source: europa.eu

 

These things are all charged together to you, the importer, when you import from outside the EU. You can read the whole site there for more details if you want, but I've already told you the most important parts.

 

How the bill is presented to you could differ based on your country though, so it is worth doing some google searching in one of your government's official languages.

[whm1974]

3 hours ago, Just that Mario said:

What do you mean? US also has tax on goods purchased, it just isn't in the original price, but added afterwards - hence the memes about americans doing math to know how much end cost will be?

I was taxed 20% during checkout and another 20% by local customs because LTT store fails to supply information that the tax has already been paid.

The US Federal government doesn't have any sort of Sales Tax. Only the State and local governments do. And there is no such thing as a Value Added Tax.

[Just that Mario]

8 minutes ago, whm1974 said:

The US Federal government doesn't have any sort of Sales Tax. Only the State and local governments do. And there is no such thing as a Value Added Tax.

It doesn't matter what it is called or if it is state or country wide, a tax on purchased goods is still a tax. US sales tax and customers tax or whatever it is called is essentially the same as VAT.

I've also found a comment from Nick of LTT that they were looking into automatically adding tax to invoices at checkout:

 

[Just that Mario]

20 minutes ago, maplepants said:

As soon as you buy a product from a non-EU country, then effectively you become an importer and become liable to Customs and Excise Duty as well as Value Added Tax (VAT) payments. If the terms of sale do not specify another arrangement, the goods would normally be held by the Customs Authority at entry, pending the payment of duty and tax.

Source: europa.eu

 

These things are all charged together to you, the importer, when you import from outside the EU. You can read the whole site there for more details if you want, but I've already told you the most important parts.

 

How the bill is presented to you could differ based on your country though, so it is worth doing some google searching in one of your government's official languages.

Why do you even bother replying with information that is irrelevant whilst you ignore everything that has been discussed in the thread?

[tkitch]

24 minutes ago, Just that Mario said:

It doesn't matter what it is called or if it is state or country wide, a tax on purchased goods is still a tax. US sales tax and customers tax or whatever it is called is essentially the same as VAT.

I've also found a comment from Nick of LTT that they were looking into automatically adding tax to invoices at checkout:

 

So, here's the thing:

The US Government doesn't have a sales tax.  When I order something online, there is 0% Federal Taxes.

 

The only thing I pay is a local city/state tax, which is determined by my Zip Code.

 

This number changes (pretty dramatically) depending on where you live in the USA.

 

We have nothing comprable to a VAT Tax in the US.  

[whm1974]

1 minute ago, tkitch said:

So, here's the thing:

The US Government doesn't have a sales tax.  When I order something online, there is 0% Federal Taxes.

 

The only thing I pay is a local city/state tax, which is determined by my Zip Code.

 

This number changes (pretty dramatically) depending on where you live in the USA.

 

We have nothing comprable to a VAT Tax in the US.  

Which is exactly my point.

[maplepants]

35 minutes ago, Just that Mario said:

Why do you even bother replying with information that is irrelevant whilst you ignore everything that has been discussed in the thread?

No need to be like this, you're asking for help here I'm trying to provide it. 

 

In this comment you write

3 hours ago, Just that Mario said:

I was taxed 20% during checkout and another 20% by local customs because LTT store fails to supply information that the tax has already been paid.

But what I'm trying to tell you is that none of the taxes you see on the LTT store checkout page have anything to do with VAT, customs, or other duties you owe when importing the items you bought. That's why I linked you to europa.eu where they explain how the taxes work for goods bought online from sellers outside the EU.

 

You specifically asked why you have to pay local customs, even though there was a line item called "taxes" on your checkout page. I'm giving you the answer, and you're being weirdly hostile about it.

[WkdPaul]

1 hour ago, maplepants said:

*snip*

We all get what you're saying, but you seem to have (intentionally or not) omitted comments by the OP ;

 

• He paid taxes already
• He's not disputing paying duties
• The taxes collected are 20% (with a screenshot), so it's not Canadian sales taxes
• The link to the LTT store you posted talks about DUTIES, not taxes.

 

As the OP stated, you're confusing duties and taxes, they're not the same. You're not helping the situation, you're adding confusion to the discussion, and you're being dismissive.

 

Any new replies after this that will focus on duties and don't take the information the OP provided into account will be removed without notifications. If you can't help, or you're uninterested in helping, that's perfectly fine, simply don't reply and move on.

[maplepants]

3 hours ago, WkdPaul said:

We all get what you're saying, but you seem to have (intentionally or not) omitted comments by the OP ;

 

• He paid taxes already
• He's not disputing paying duties
• The taxes collected are 20% (with a screenshot), so it's not Canadian sales taxes
• The link to the LTT store you posted talks about DUTIES, not taxes.

 

As the OP stated, you're confusing duties and taxes, they're not the same. You're not helping the situation, you're adding confusion to the discussion, and you're being dismissive.

 

Any new replies after this that will focus on duties and don't take the information the OP provided into account will be removed without notifications. If you can't help, or you're uninterested in helping, that's perfectly fine, simply don't reply and move on.

Respectfully, I think I am being helpful here. OP has asked a question which I know the answer to and I'm just trying to give him that answer. I'll take one more crack at it, outlining the questions OP asks and then answering them. In his initial post he says:

 

9 hours ago, Just that Mario said:

I am surprised LTT is still adding tax to EU orders without providing the IOSS certificate, essentially making us pay double tax

Later he writes

 

8 hours ago, Just that Mario said:

I was taxed 20% during checkout and another 20% by local customs because LTT store fails to supply information that the tax has already been paid.

And then writes

6 hours ago, Just that Mario said:

There is absolutely no reason customer should pay taxes twice

In the same comment added an update which says:

7 hours ago, Just that Mario said:

EDIT: The link you posted says customs and duty fees in shipping costs. Checkout still collects VAT, just as it is for any regular purchase.

 

The subject of the thread even asks about LTTStore's IOSS certificate. But this is where we run into our first issue, there's no indication on LTTStore that they actually have an IOSS certificate and on this very forum Linus himself has said that they don't do direct EU distribution. They've also said many times on the WAN Show that they don't do anything tax related for anywhere outside of the US and Canada. So there's no reason to think that Linus Media Group/LTTStore has an IOSS certificate or that they pay any EU taxes at all. 

 

So with that foundation, I think it's pretty clear what OP is asking about here. He has a screenshot of his order summary which contains a line item called "Taxes" and he was presented with an import bill which also included "taxes". He think's he's been double charged, and wants to know what's going on here. 

 

The answer to his question is that the "taxes" item on his confirmation page isn't VAT nor is it any other EU tax, fee, or duty. He's not paying the same taxes twice, because the taxes and other fees associated with importing an item bought online from a shop located outside the EU are the responsibility of the buyer and not the store. LTTStore can't collect this stuff on OP's behalf, because they don't have a European business entity. 

 

There's a lot of unrelated comments here about US taxes and how they're collected, but none of that impacts the answer to the original question here.

 

The correct answer for why he still had to pay taxes in the EU even LTTStore charged him for a line item they labelled "taxes" is that whatever taxes LTTStore charged are completely unrelated to the taxes he owes on the LTTStore goods he imports from outside the EU. The EU taxes that he owes are paid to customs at the same time as he pays his other import duties and he pays those import duties for the same reason he pays those taxes; LTTStore doesn't have an EU business entity. 

 

Quoting one last time from europa.eu:

Quote

As soon as you buy a product from a non-EU country, then effectively you become an importer and become liable to Customs and Excise Duty as well as Value Added Tax (VAT) payments. If the terms of sale do not specify another arrangement, the goods would normally be held by the Customs Authority at entry, pending the payment of duty and tax.

[duncannah]

The taxes part when ordering is clearly the VAT, you can try it out yourself. 

Here's a screenshot with a Belgian address:

(29.99+15.99) * 0.21 (Belgian VAT) = 9.6558 → 9.66, so clearly it is the VAT.

 

Same order with a German address:

(29.99+15.99) * 0.19 (German VAT) = 8.7362 → 8.74, thus we can deduct easily that this is the VAT.

 

The VAT is indeed part of the custom duties, and if you paid it while ordering, then it shouldn't be paid again

The post office or customs or whatever also can charge extra whatever they want too, which you also wouldn't usually get with the VAT pre-paid.

Here's what I had to pay for a package from outside the EU without having the VAT paid firsthand:

[Avocado Diaboli]

2 hours ago, maplepants said:

The answer to his question is that the "taxes" item on his confirmation page isn't VAT nor is it any other EU tax, fee, or duty.

Then what taxes is he paying for? Because last time I ordered something I didn't pay taxes.

 

 

Granted, I ordered something delivered to Switzerland, which isn't part of the EU, but if I put the same item in my cart again with the same address, it suddenly calculates taxes.

 

The reason people are telling you that you're not helpful is because you're not actually answering the question. We know that if you import something that you have to pay import taxes on it, except if it's shipped DDP. I knew that I had to pay taxes on this order when it arrived at my door (well, not exactly, since it was actually below the threshold where you have to pay import taxes on, but that's besides the point). So again, what taxes are being levied here? And why would my order from a year ago not be taxed while a current one would be? Answer that, then you're helpful. Not when you point out something anyone ordering internationally knows.