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

[dizmo]

How long did you give it before you made the post, from when you filed your ticket?

If you knew there were issues, you probably should have figured out what the answer was before you got the items shipped.

While I think you should have simply waited to order, or at the very least waited for an answer before making this post, it'd probably help to tag some peeps.

@LinusTech @nicklmg

 

12 hours 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.

I'd rather pay a small amount of tax, than have key infrastructure literally crumbling away

11 hours 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's actually not at all how that works. If you're selling something outside of BC, you don't have to charge tax. It also doesn't make sense if it's 20%, as that isn't a number any of the provinces have for a total tax value.

 

Your comment about LTT not doing anything tax related outside of NA doesn't make any sense either; if that were the case, they wouldn't be collecting the tax that has been shown at all, as they wouldn't have to. They wouldn't be submitting that amount to the required authority, which is the only legal reason they'd have to charge it.

 

Quote

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. 

So what is it? You're basically saying he's paying money for nothing. You're not answering the entire issue, you're picking one part of it and giving an answer without taking into consideration the rest.

[tikker]

Since it's been established it is charging VAT, could this just be related to the Shopify setup?

 

https://help.shopify.com/en/manual/taxes/charging-international-duties

Quote

<explanation about DDP/DDU>

To help your customers avoid additional fees, you can charge any applicable duty and import taxes in your checkout. Your carrier will later invoice you for duty and import taxes, which you can then pay with the fees that you collect from your customer.

<bunch of links about shopify tax options>

 

[whm1974]

6 minutes ago, dizmo said:

I'd rather pay a small amount of tax, than have key infrastructure literally crumbling away

There is enough US Federal Taxes coming that there is no excuse for Key Infrastructure to be badly Maintained as it is. There is no need here for a VAT.

 

But I don't want to be Political here.

[nicklmg]

On 1/3/2022 at 1:44 AM, Just that Mario said:

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.

We're charging tax because we are submitting the IOSS certificate with each order. We have been submitting it all along. You shouldn't be charged VAT at delivery.

 

Legally, as of mid-last year, we have to charge VAT on any items sold to customers in the EU through our store. Unfortunately this has been an absolute mess of a policy rollout, so either countries within the EU are not properly updating their own policies, or the people managing this process on their side are not following it.

 

We've brought this issue up with our shipping provider, and they've run it up the chain a number of times. They have confirmed to us that our IOSS number is being submitted properly all the way to the receiving country. The info I've been given is that the IOSS info is submitted electronically, not on the package itself, and is making it's way to the receiving country for import of goods.

 

The issue we seem to be coming across is that either customs agents or postal workers (or maybe entire offices?) in some EU countries are not properly following the policy that has been instated there, and aren't matching packages to the electronically submitted IOSS certificate.

 

I'm not sure what the other store you're referring to is doing, but if they're not charging VAT at checkout on EU orders, they are not in line with current EU tax policy on ecommerce orders coming from outside the EU. I can't speak to their shipping situation - maybe they have a more direct route, or maybe they are shipping lighter parcels. We lose money shipping to the EU charging the rates that we do, and every other solution we've seen has been even higher from Canada to the EU. EDIT: If that other store isn't doing enough volume of revenue or orders to pass a certain threshold, they might not have to collect VAT at checkout. Unfortunately we have passed that threshold in a number of EU countries so the IOSS system is what makes the most sense for us.

 

My best advice is that if you're charged tax at delivery, reach out to your local post office and ask if they're matching electronic IOSS certificates to packages, and show them your proof of payment from the store which lists the VAT.

 

If they refuse to fix their error, then pay the VAT at delivery and reach out to our support team. If you can provide proof that you've been charged VAT on a package that had VAT charged at checkout, we will refund you that VAT and remove it from our filing with the EU. But we will need to see proof of payment of tax at the door/at delivery to do that. (And just to clarify this is only for VAT, which is collected at checkout for all EU orders by law. If your country has other import duties or taxes that it applies at delivery, that is on you)

 

Hope that helps explain the situation. Trust me, we're just as frustrated as anyone receiving one of these tax bills. Between UK & EU VAT rollouts last year, it has been an absolute nightmare trying to continue shipping to y'all, but we're doing the best that we can with what has been provided to us.

[nicklmg]

12 hours 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.

VAT can mean different things depending on what jurisdiction you're in. And that is not how taxes work in Canada... if the final customer is not based in Canada, the customer is not paying Canadian sales tax on that sale, even though we would pay corporate income tax on the revenue. In some cases Canadian businesses don't even pay import duty or tax on goods for resale which are leaving Canada.

11 hours 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. 

What we charge at checkout for EU orders is VAT. IOSS is the system which was set up to manage VAT remittance to EU countries from businesses outside of the EU.

 

Legally, we must collect VAT on orders to the UK & EU as of last year. It has nothing to do with having a business entity in the UK or EU, both of those governments have determined that the overhead of assessing VAT at import was too high and shifted the burden to ecommerce stores.

[poochyena]

4 hours ago, nicklmg said:

Legally, as of mid-last year, we have to charge VAT on any items sold to customers in the EU through our store.

Wait, isn't it still optional? When I looked into it, I kept getting mixed responses, but most articles seemed to say its still optional to collect VAT, except for the UK where you have to and also register your business with the UK.

4 hours ago, nicklmg said:

Between UK & EU VAT rollouts last year, it has been an absolute nightmare trying to continue shipping to y'all

It seriously has been. I stopped shipping to the UK because I don't want to deal with that nightmare. My shipping volume is much smaller though.
Sorry this is sorta off topic.

[Just that Mario]

6 hours ago, nicklmg said:

We're charging tax because we are submitting the IOSS certificate with each order. We have been submitting it all along. You shouldn't be charged VAT at delivery.

 

Legally, as of mid-last year, we have to charge VAT on any items sold to customers in the EU through our store. Unfortunately this has been an absolute mess of a policy rollout, so either countries within the EU are not properly updating their own policies, or the people managing this process on their side are not following it.

 

We've brought this issue up with our shipping provider, and they've run it up the chain a number of times. They have confirmed to us that our IOSS number is being submitted properly all the way to the receiving country. The info I've been given is that the IOSS info is submitted electronically, not on the package itself, and is making it's way to the receiving country for import of goods.

 

The issue we seem to be coming across is that either customs agents or postal workers (or maybe entire offices?) in some EU countries are not properly following the policy that has been instated there, and aren't matching packages to the electronically submitted IOSS certificate.

 

I'm not sure what the other store you're referring to is doing, but if they're not charging VAT at checkout on EU orders, they are not in line with current EU tax policy on ecommerce orders coming from outside the EU. I can't speak to their shipping situation - maybe they have a more direct route, or maybe they are shipping lighter parcels. We lose money shipping to the EU charging the rates that we do, and every other solution we've seen has been even higher from Canada to the EU.

 

My best advice is that if you're charged tax at delivery, reach out to your local post office and ask if they're matching electronic IOSS certificates to packages, and show them your proof of payment from the store which lists the VAT.

 

If they refuse to fix their error, then pay the VAT at delivery and reach out to our support team. If you can provide proof that you've been charged VAT on a package that had VAT charged at checkout, we will refund you that VAT and remove it from our filing with the EU. But we will need to see proof of payment of tax at the door/at delivery to do that. (And just to clarify this is only for VAT, which is collected at checkout for all EU orders by law. If your country has other import duties or taxes that it applies at delivery, that is on you)

 

Hope that helps explain the situation. Trust me, we're just as frustrated as anyone receiving one of these tax bills. Between UK & EU VAT rollouts last year, it has been an absolute nightmare trying to continue shipping to y'all, but we're doing the best that we can with what has been provided to us.

Thanks for the reply and clearing it up, but I need to manually insert the IOSS certificate when it exists when declaring the package. If support of LTT store can provide me with that, I can take it up to local customs. Unfortunately I already paid the VAT again, as the final deadline before they'd send parcel back was 29th and knowing local delivery, etc companies, each step could take 3 days and I wasn't sure when LTT store support would get back to me. I wasn't going to risk with some oopsie woopsie we lost the package from shipping company...

Other store is another YouTuber's shopify store in Australia. As from what I understand, adding EU VAT at checkout is not necessary. If it is missing, you pay it locally. 

Thanks again for the info and I will take contact with local customs and shipping company.

[maplepants]

7 hours ago, nicklmg said:

What we charge at checkout for EU orders is VAT. IOSS is the system which was set up to manage VAT remittance to EU countries from businesses outside of the EU.

 

Legally, we must collect VAT on orders to the UK & EU as of last year. It has nothing to do with having a business entity in the UK or EU, both of those governments have determined that the overhead of assessing VAT at import was too high and shifted the burden to ecommerce stores.

I appreciate this updated information. Until this comment here, there was no indication on the forum, or on the website that LTTStore was collecting VAT. On my own orders in 2020 & 2021, Deutsche Post made me pay VAT as well so I think there are improvements to be made on your end somewhere. Perhaps an enhancement to the receipt for EU orders? Or some added info to the FAQs on the website? OP and I are not likely to be the only ones who've apparently paid VAT on our orders twice.

[Just that Mario]

47 minutes ago, maplepants said:

I appreciate this updated information. Until this comment here, there was no indication on the forum, or on the website that LTTStore was collecting VAT. On my own orders in 2020 & 2021, Deutsche Post made me pay VAT as well so I think there are improvements to be made on your end somewhere. Perhaps an enhancement to the receipt for EU orders? Or some added info to the FAQs on the website? OP and I are not likely to be the only ones who've apparently paid VAT on our orders twice.

It is quite apparent that they collect VAT if you pay attention. What the shop claims is to not charge for customs and import fees, which VAT is not.

[WkdPaul]

5 hours ago, maplepants said:

I appreciate this updated information. Until this comment here, there was no indication on the forum, or on the website that LTTStore was collecting VAT. On my own orders in 2020 & 2021, Deutsche Post made me pay VAT as well so I think there are improvements to be made on your end somewhere. Perhaps an enhancement to the receipt for EU orders? Or some added info to the FAQs on the website? OP and I are not likely to be the only ones who've apparently paid VAT on our orders twice.

It's apparent you're not paying attention, others have posted screenshots showing VAT was charged. I'm not exactly sure why you kept arguing about it when it was clear.

[Just that Mario]

So after local customs support was absolutely useless I took a bit of a shit on them with my reply and eventually they managed to grow some brain cells, pay attention and reply with some useful information instead of a typical copy-paste answer. Right now it seems like the local delivery company is being an a-hole and not supplying the IOSS information. My guess is they want to fish people into using their PAID declaration service (which is absurd, since entire thing takes about two minutes and can be done online, oh and they charge like 10-15 euros for it). I am going to fight with delivery company now to see what they claim about IOSS. Will report back once I have more information.

Water bottle is pretty sick though and it had some sticker freebies in the box

[nicklmg]

13 hours ago, poochyena said:

Wait, isn't it still optional? When I looked into it, I kept getting mixed responses, but most articles seemed to say its still optional to collect VAT, except for the UK where you have to and also register your business with the UK.

It seriously has been. I stopped shipping to the UK because I don't want to deal with that nightmare. My shipping volume is much smaller though.
Sorry this is sorta off topic.

As far as I understand, the law used to be that there were certain thresholds for each individual EU country where once you started doing a certain volume of business there (either by revenue or by qty), you had to register with their tax authority and start collecting at checkout. It's the same story in the US - once you reach a certain volume in states, counties, cities, or even some communities (since their tax code is so mega-f'd that the tax classification can change basically on a whim depending on where the final delivery address is) you have to collect that tax at checkout and remit it to the proper authority.

 

After IOSS, if you cross that threshold in one country, you just register for IOSS and have to collect for all of EU now. If you're not doing enough business in the EU to meet any of those thresholds with individual countries, you might not have to worry about it, but I believe we've crossed that line with like 5-10 countries so IOSS is the only system that makes sense.

 

We could also ship via DDP (delivery & duties paid) labels, but then we are taking on the responsibility of those assessed duties and customs being correct, based on an estimate provided by a 3rd party (in our case it would be Shopify). If they are not assessed correctly, then we would get a bill in the mail for the difference. Not a risk we're comfortable taking right now.

 

Some of my explanation might be a bit rough around the edges there, we have accountants who are much smarter than I am with this stuff and they work out the details haha.

16 minutes ago, Just that Mario said:

So after local customs support was absolutely useless I took a bit of a shit on them with my reply and eventually they managed to grow some brain cells, pay attention and reply with some useful information instead of a typical copy-paste answer. Right now it seems like the local delivery company is being an a-hole and not supplying the IOSS information. My guess is they want to fish people into using their PAID declaration service (which is absurd, since entire thing takes about two minutes and can be done online, oh and they charge like 10-15 euros for it). I am going to fight with delivery company now to see what they claim about IOSS. Will report back once I have more information.

Water bottle is pretty sick though and it had some sticker freebies in the box

Interesting... just to clarify, is the local delivery company you're referring to the local post office in your area or another company? If you aren't comfortable sharing any info publicly here feel free to DM it to me, I'd like to try to get to the bottom of this if we can and this new info could actually help us out quite a bit.

 

That's a pretty f'd up situation but I don't think it's uncommon right now... this is a system which has been poorly supported and poorly rolled out, and I'm sure at this time it is rife with cases of abuse like what you're explaining here. I just hope it smooths out over time and we can finally be done with thinking about EU taxes lol.

[Just that Mario]

13 hours ago, nicklmg said:

Interesting... just to clarify, is the local delivery company you're referring to the local post office in your area or another company? If you aren't comfortable sharing any info publicly here feel free to DM it to me, I'd like to try to get to the bottom of this if we can and this new info could actually help us out quite a bit.

 

That's a pretty f'd up situation but I don't think it's uncommon right now... this is a system which has been poorly supported and poorly rolled out, and I'm sure at this time it is rife with cases of abuse like what you're explaining here. I just hope it smooths out over time and we can finally be done with thinking about EU taxes lol.

It is basically the national? delivery service. Long time ago used to be "Eesti Post" (Estonian Post), now it is Omniva. When a package, that requires customs declaration, arrives to customs you get an email notification from MTA (customs) and courier (Omniva). Omniva is going to try to sell you their declaration service, but you can do it online yourself by filling in a short form. Omniva will give you some base information in form of an document ID, which will prefill some data. Takes about 5 minutes to fill it (searching correct category for the goods can sometimes be PITA and I often just select something close enough...).

Form is something like this:

There's a checkbox to register it as an IOSS parcel, but then it asks for IOSS number, which I didn't have. I do wonder how AliExpress manages this, since those parcels always go through customs without any declarations required. Looked at some parcels I still have packaging for and couldn't tell it had any specific markings or IOSS code on them. I tried to do some research myself as well on how the IOSS system works for online stores like shopify, etsy, ebay, etc and got so many different answers. For etsy, ebay some were saying to just provide marketplace's IOSS number on the receipt. Yet again other people were commenting to not give out the IOSS number and everything will be handled by the marketplace.

¯\_(ツ)_/¯

[Yoinkerman]

It sounds like lmg could pump that ioss number into and email just like a tracking number so you can provide it easily 

[nicklmg]

13 hours ago, Just that Mario said:

It is basically the national? delivery service. Long time ago used to be "Eesti Post" (Estonian Post), now it is Omniva. When a package, that requires customs declaration, arrives to customs you get an email notification from MTA (customs) and courier (Omniva). Omniva is going to try to sell you their declaration service, but you can do it online yourself by filling in a short form. Omniva will give you some base information in form of an document ID, which will prefill some data. Takes about 5 minutes to fill it (searching correct category for the goods can sometimes be PITA and I often just select something close enough...).

Form is something like this:

There's a checkbox to register it as an IOSS parcel, but then it asks for IOSS number, which I didn't have. I do wonder how AliExpress manages this, since those parcels always go through customs without any declarations required. Looked at some parcels I still have packaging for and couldn't tell it had any specific markings or IOSS code on them. I tried to do some research myself as well on how the IOSS system works for online stores like shopify, etsy, ebay, etc and got so many different answers. For etsy, ebay some were saying to just provide marketplace's IOSS number on the receipt. Yet again other people were commenting to not give out the IOSS number and everything will be handled by the marketplace.

¯\_(ツ)_/¯

Interesting! I'll pass this along to our shipping partner and see if they can offer any insight

 

Yeah it's a mess... I know that marketplaces like Etsy and Ebay are handled differently than an individual store like ours. Basically it's clear that there's not one correct way to do this across the EU right now, while the bill of goods that we were sold was basically "sign up for this program with the EU and we'll handle the rest."

 

Life is never as simple as it seems  

6 hours ago, Yoinkerman said:

It sounds like lmg could pump that ioss number into and email just like a tracking number so you can provide it easily 

Potentially, but it's not something that Shopify has enabled by default so it seems like this is a relatively isolated issue, maybe just to Estonia, maybe to our shipping provider, maybe to whatever services they use. It's really hard to isolate without doing some more digging.

 

I'm sure we could figure out a way to provide the IOSS number directly, but the whole point of this system was supposedly that we wouldn't have to make major modifications to make it work lol.

 

Anyway, we'll continue to work on it in the background.

[EL02]

14 hours ago, Just that Mario said:

I do wonder how AliExpress manages this, since those parcels always go through customs without any declarations required.

Usually they declare a lower price like $22 on a $400 item and you don't pay taxes. This is their default behavior, unless you ask them otherwise.

[Yoinkerman]

58 minutes ago, EL02 said:

Usually they declare a lower price like $22 on a $400 item and you don't pay taxes. This is their default behavior, unless you ask them otherwise.

I think my 3500 piece death star was billed as $2.50 in plastic toys

[Mark Kaine]

On 1/3/2022 at 2:25 PM, EL02 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.

i think thats a common misconception, you may pay tax at checkout,  and don't have to pay it again,  but at customs you have to pay import fees, which might be even higher.  i think eu even raised them recently to help "local" online sellers scammers. What a world we live in! 

[Ezzy-525]

Well i was looking at getting a few items from the store, but it seems like it may be a whole lot of hassle for a couple of T-Shirts and a hoody. 

[Just that Mario]

6 hours ago, Mark Kaine said:

i think thats a common misconception, you may pay tax at checkout,  and don't have to pay it again,  but at customs you have to pay import fees, which might be even higher.  i think eu even raised them recently to help "local" online sellers scammers. What a world we live in! 

Import fees are on goods which have value over 150 euros. I also just remembered that books for example have VAT of only 9% (normally it is 20%).

 

6 hours ago, Ezzy-525 said:

Well i was looking at getting a few items from the store, but it seems like it may be a whole lot of hassle for a couple of T-Shirts and a hoody. 

Tshirts, hoodie, etc may come to total of 150 or more, so I suggest doing some research. Might even be more beneficial to do two orders to avoid import tax.

[Just that Mario]

@nicklmg I checked emails and I've received reply and explanation from Omniva. Apparently my order did not have IOSS code registered with it. Could it be that the shopify system is not working properly, since it seems I am not the only one, who has had this issue?

Google translated (cba to manually translate) reply from Omniva

 

Quote

Incoming shipments move to the recipient on the basis of the system, and when forwarding shipments, we proceed from the data indicated by the sender on the shipment, and  electronic shipment information. The information provided by the consignor of consignment LF031380785FR does not include an IOSS code confirming that he is a reliable consignor who has collected VAT at the time of sale of the goods and allows the consignment to be declared without further payment. The IOSS code is also missing from the electronic information of the shipment. Omniva does not have the right to add the IOSS code and declare the shipment without collecting the payment.

 

[nicklmg]

9 hours ago, Just that Mario said:

@nicklmg I checked emails and I've received reply and explanation from Omniva. Apparently my order did not have IOSS code registered with it. Could it be that the shopify system is not working properly, since it seems I am not the only one, who has had this issue?

Google translated (cba to manually translate) reply from Omniva

 

 

Passed this over to our shipping company. They've assured us multiple times that everything is correct on their end, but I guess it's never a guarantee...

 

Hope we can get a proper resolution soon.

[quasdd]

@nicklmg

Just received notification from local mail carrier (Finland) to declare my incoming package that I paid VAT for. At this time is it possible for LMG to provide the ioss number? It should be the same for the whole EU afaik. That would be the simplest thing, and which I have had to do with couple packages coming from aliexpress/amazon/random shop in Australia. 

 

Or should I just pay the taxes double and ask it back? Have reached through support already with no answers yet.

[quasdd]

6 minutes ago, quasdd said:

@nicklmg

Just received notification from local mail carrier (Finland) to declare my incoming package that I paid VAT for. At this time is it possible for LMG to provide the ioss number? It should be the same for the whole EU afaik. That would be the simplest thing, and which I have had to do with couple packages coming from aliexpress/amazon/random shop in Australia. 

 

Or should I just pay the taxes double and ask it back? Have reached through support already with no answers yet.

@nicklmg

also lately, I have had packages come through completely without intervention so it is not like they are completely incapable of processing ioss packages.

[diynevala]

On 1/5/2022 at 11:24 PM, nicklmg said:

I'm sure we could figure out a way to provide the IOSS number directly, but the whole point of this system was supposedly that we wouldn't have to make major modifications to make it work lol.

TL;DR; Can we have the IOSS number please? I think it is a code like IM1234567890. It should be available on order confirmation, as it seems we might need to declare customs manually with the IOSS number. I think it might be easy to add to the order confirmation page, as the IOSS code is static (per company), not changing identifier.

 

I have waited my waterbottle since father's day November 14, 2021. At the end of december, I emailed LTT store support and they told the shipment has failed and they'd send another one. That second shipment is now held hostage at customs or post office, and they require me to declare the package manually with IOSS number. After 20 days the shipment is returned to sender, if I fail to declare it.

•  Product is paid
•  Shipping is paid
•  Taxes (Finnish VAT) is correctly calculated and paid
•  Package has arrived to post office
•  IOSS (or other required info) is missing from package and nowhere to be found. 

There is one other possible problem: as the first shipment was lost, the second order confirmation had a price of $0. Maybe the post/customs received that and did not like zero-priced goods being delivered?

 

This waterbottle has cost me about $50 so far, and since LTT Store had to send me another one I bet they are not making profit on it either.

 

At this point, I only expect to get a short email containing the IOSS identification number/code/whatever so I can declare the expensive waterbottle out of the customs, please. I have asked for IOSS via email also.