New EU shipping rules – What are they, and what do they mean for you?
Drop shipping is huge part of the service we offer you here at Alterego. It allows you to ship and receive products from our huge range anywhere across the world, with prompt, reliable and discreet deliveries from our extensive stock of exceptional quality lingerie.
A high number of our customers choose to ship to countries in the EU. Yet with the ongoing changes to the way we deliver to, and do business with Europe as a result of the Brexit deal, a new way to pay for the VAT and duty (if applicable) on your drop shipping orders to the EU has come into effect.
On July 1st 2021, some new rules came into force about shipping orders into the EU. This is a new VAT system. Let’s explain a little more about what that is, and what that means for you and drop shipping with Alterego.
What is currently happening?
On your recent orders with Alterego, you may have noticed the term ‘without Import One-Stop Shop (IOSS)’ on your order forms or other documentation. This is how we’ve been shipping products to the EU for you, our customers, as part of our B2B service to you and the B2C dropship service. It has applied to goods of any value.
What is changing?
From 1 July 2021, the current VAT exemption for importation of goods up to €22 was removed and all commercial goods imported into the EU became subject to VAT and now require a formal customs declaration. These changes affect every single person in the EU supply chain, and have been designed with the goal of making things simple and fairer for everyone involved.
The new VAT collection scheme, called an Import One-Stop Shop (IOSS) is optional and is applicable only in relation to B2C sales up to the value of €150 or £135. Here is a succinct guide All you need to know about the Import One-Stop-Shop (IOSS)
What will you need to pay?
Under the new rules, you need to know about the changes to how VAT is collected. This applies when you ask us to dropship an order to a customer in an EU country as we will only be offering a dropship service on a none IOSS basis. In these cases, you will need to make arrangements for the appropriate VAT payment to be made by your customer as this payment will be required and will be collected by the courier prior to delivery of the goods in the destination country.
The amount payable depends on courier’s clearance costs and the VAT for the receiving county, as each EU member state has a different VAT rate. Here is a link to a VAT rate calculator guide for each EU country VAT Rates for each EU member state
Please note, you will need to advise your customer they will need to pay the VAT, clearance (and possibly duty, although most goods under 150 euros / £135 are unlikely to be subject to duty) charges themselves prior to the parcel being delivered.
What else do you need to know?
It’s important to note that Alterego does not cover these VAT or duty charges (if applicable) for orders shipped to EU customers on your behalf as a dropship order. Whilst we do everything we can to support your business’ success and growth, naturally these costs would be exorbitant if we were to pay on behalf of every single customer we have. As such, please be aware that any orders returned to Alterego as a result of non-payment of charges will incur an administrative fee of £25.00 plus VAT to cover return courier costs, handling and admin fee.
We know that a close working relationship with Alterego is essential to your thriving lingerie business. Therefore, we’ve dedicated a section of our website to keep you updated with the latest Brexit developments and what they mean for you.
You can also find more information about our drop shopping service here. Whatever the IOSS regulations, you can still depend on us for reliable and efficient drop shipping, with flexible delivery options, varied payment methods and no minimum order quantity.
As always, please get in touch with our team here at Alterego if you need any additional support and advice about our products and services. You can also find out more about what we’re up to and get step-by-step guidance in our latest ‘how to’ blog series.
Click on the links below to view the additional resources.
VAT Rates for each EU member state
2021 – Short series of Videos on EU VAT E-commerce Changes
All you need to know about the Import One-Stop-Shop (IOSS)