Upcoming: Add VAT to listings before Jan. 1 when eBay starts collecting VAT on UK imports

[ricarmic]

Got the below message today.

As far as I see, there's nothing for me to do, I don't sell directly on .UK, and I expect it will end up like happens for Australia and Singapore (and the USA) it just gets added on the the bill and passes through PAYPAL until MP arrives.

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Starting January 1, 2021, eBay will be legally required to begin collecting and remitting VAT for UK imports. eBay will have to charge buyers the applicable VAT amount directly and remit this sum to the relevant authorities.

Sellers trading with UK buyers and listing on the UK or any EU site will need to provide both gross prices as well as the applicable VAT rate used to calculate the gross price on all listings. If sellers do not specify gross prices and VAT rates, eBay will have to assume that the price provided is the net price, and will add VAT on top of the price displayed to buyers.

We strongly urge sellers listing on eBay.co.uk or other European eBay sites to specify the applicable VAT rates on existing listings as soon as possible. All new listings should include a VAT rate. If you don’t have an EU or UK VAT ID, then simply enter 0% beside the price when you create or edit listings.

What you need to know:

- Starting January 1, 2021, eBay will start to collect and remit VAT for UK imports on all consignments with a value of up to £135. There will no longer be a VAT exemption for small consignments up to £15.

- In cases where the seller is a non-UK business and the goods are already in the UK, eBay will collect and remit VAT for goods sold to consumers within the UK, regardless of their value.

- Sellers should begin listing the applicable VAT rates on all their existing and new listings as soon as possible.

- Starting March 1, 2021, eBay will make it mandatory to add a VAT rate on all UK and EU sites when listing items.

To see the latest information on the upcoming changes, please visit UK Seller Centre 2021 VAT Changes:

https://sellercentre.ebay.co.uk/global-sales/2021-vat-changes

This email is not intended as tax or legal advice. We recommend that you seek independent tax or legal advice to ensure compliance with applicable laws and regulations.

Thank you for selling on eBay,
Your eBay Team

[marnotom!]

Yup. Just like that.

[pjcdn2005]

I get the same impression that you did.

[darak10]

yup, thats my understanding of it too.  It'll be interesting to see if it affects purchases by British customers in certain categories over others.  It honestly has not affected sales from the US at all since they started collecting the tax in the US, likely as they are still saving big time on the exchange rate.  If the Canadian dollar continues to rise against the US dollar that may change, but its always been fairly low against the pound (around 60%) so I dont really think this is going to affect things much.  

[valuestore]

They mention we need to specify gross value, I assume they mean value item before shipping.  So the buyers are not taxed VAT on shipping, which for overseas can be half value of the sale.   But so far I haven't found where we would add VAT information to our listings... though I admit I haven't looked to hard yet.

[pjcdn2005]

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@valuestore wrote:

They mention we need to specify gross value, I assume they mean value item before shipping.  So the buyers are not taxed VAT on shipping, which for overseas can be half value of the sale.   But so far I haven't found where we would add VAT information to our listings... though I admit I haven't looked to hard yet.

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No, that info about gross value is only if VAT was already included in the price.  Then you would have to separate the VAT so that they don't charge VAT twice. Unless you list on overseas sites this shouldn't change anything that we have to do.

I don't know if it is true in all Europeans countries but in most cases, the retail price already includes the tax..not like here where they add on it when you pay for it.

[marnotom!]

Under the present system, if an eBay (or similar) item is purchased by a UK buyer from a non-EU seller, the shipping cost is subject to VAT as well as the item price.  If I'm reading the information on the new system correctly, the shipping cost won't be subject to VAT unless, as @pjcdn2005 notes, it's already included with the item price.

https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-custom...

[valuestore]

There is VAT on shipping, thanks that was key bit I wasn't sure about.

[ypdc_dennis]

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@ricarmic wrote:
... there's nothing for me to do, I don't sell directly on .UK, and I expect it will end up like happens for Australia and Singapore (and the USA) it just gets added on the the bill and passes through PAYPAL until MP arrives. ...

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Also in effect for Norway (which I discovered with an October sale). The EU was originally planning to start January 2021, but have pushed the VAT grab off to the summer of 2021.

-..-

[motomike_canada]

I had the same impression. Then I got an email about it from Shopify with this link:

https://help.shopify.com/en/manual/taxes/eu/uk?utm_campaign=support&utm_content=support&utm_medium=e...

The first bit seems to only apply if in the UK or EU. 

but then.

"Outside of the UK and the EU:

The new UK VAT laws coming into force on January 1, 2021 will apply to the sale of goods from non-EU merchants to UK customers. Non-EU merchants who sell to UK customers might be required to register for VAT in the UK."

ugh.. "might".  mkay...  

[marnotom!]

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@motomike_canada wrote:

I had the same impression. Then I got an email about it from Shopify with this link:

https://help.shopify.com/en/manual/taxes/eu/uk?utm_campaign=support&utm_content=support&utm_medium=e...

The first bit seems to only apply if in the UK or EU. 

but then.

"Outside of the UK and the EU:

The new UK VAT laws coming into force on January 1, 2021 will apply to the sale of goods from non-EU merchants to UK customers. Non-EU merchants who sell to UK customers might be required to register for VAT in the UK."

ugh.. "might".  mkay...  

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eBay is a "marketplace facilitator" which means that they are generally (key word) responsible for collecting and remitting taxes on non-domestic sales to UK buyers.  Shopify is not a marketplace facilitator.  This article about the "internet" sales taxes in the US may help to clarify things:

https://www.salestaxsystem.com/shopify-sales-tax/

[reallynicestamps]

"Outside of the UK and the EU:

The new UK VAT laws coming into force on January 1, 2021 will apply to the sale of goods from non-EU merchants to UK customers. Non-EU merchants who sell to UK customers might be required to register for VAT in the UK."

And how will Brexit affect all of this?

And the Canada /EU free trade treaty recently signed?

Is Canada pursuing free trade with a non-EU UK or just hoping cooler heads (and better haircuts) will prevail?

[marnotom!]

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@reallynicestamps wrote:

And how will Brexit affect all of this?

And the Canada /EU free trade treaty recently signed?

Is Canada pursuing free trade with a non-EU UK or just hoping cooler heads (and better haircuts) will prevail?

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My DW's supply of Wispa bars is riding on this:

https://www.cbc.ca/news/politics/canada-uk-trade-bill-introduced-1.5833879

[motomike_canada]

Thanks, yes I understand that.

[reallynicestamps]

Further update:
Because these things don't get pinned, even from eBay employees.

...when online marketplaces like eBay are involved in facilitating the sale, they will be responsible for collecting VAT directly from buyers. This means for packages of £135 or less, eBay will be collecting the VAT from buyers at the point of sale and remitting it to the UK tax authorities. For shipments worth more than this, eBay will not collect the VAT, and existing customs rules will apply - i.e. the buyer will be responsible for paying import VAT.  More details on these changes can be found here.

Please note that Canadian sellers who list on eBay.ca don't have to take any action......

[pjcdn2005]

https://community.ebay.ca/t5/Announcements/New-Value-Added-Tax-VAT-Arrangements-for-Canadian-Sellers...

The first part of that announcement is going to confuse people because it doesn't apply to us!  I posted about it on the weekly discussion board and hopefully they will fix it.

[brettjet38]

This will be coming to all countries over the next 4 years it's part of a global plan to tackle tax evasion with online shopping, our Liberals are working on the Canadian version

The "Internet Tax" details and rules to follow, a bit like the CERB...

[lotzofuniquegoodies]

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@brettjet38 wrote:

This will be coming to all countries over the next 4 years it's part of a global plan to tackle tax evasion with online shopping, our Liberals are working on the Canadian version

The "Internet Tax" details and rules to follow, a bit like the CERB...

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10.00 CAD sale to UK today. VAT Tax collected 4.47. Service requested. Small Packet Intl Air.

This VAT tax collection will definitely affect International(EU etc) sales.

tyler@ebay 

Fuel surcharge is still not being billed to buyers but is being charged when you create a label.

Increasing handling charge on each listing is not really an option to make up this shortfall. Is this still a work in progress. This needs to be fixed within the calculator. The rate increase with Canadapost came into affect over 2 weeks ago.

-Lotz

[marnotom!]

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@lotzofuniquegoodies wrote:

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This VAT tax collection will definitely affect International(EU etc) sales.

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Maybe there will be a small impact initially, but I can't see this development having long-term implications for Canadian sellers.

First off, sales of all imports will be affected, not just sales from Canada.  All non-UK, non-EU, etc. sellers will be in the same boat.  The only sellers not affected will be small-scale domestic ones, and the lower shipping rates charged by those sellers makes them more attractive to domestic buyers as it is.

Secondly, it's not just eBay that's affected by these changes.  Other online marketplace facilitators and online marketplaces are affected as well.  Buyers may try to find other sites only to find that it's just the same situation elsewhere.

Thirdly, VAT has been charged on UK and EU imports for ages; it's just been collected differently and with a different tax-free threshold.  I get the impression that most customs bureaux are a bit more stringent than Canada (in the case of countries like Germany, a lot more stringent) about assessing and collecting duty and taxes owed on postal imports.

In addition, I also haven't found a lot of threads on the .ca boards or the .com boards from American or Canadian sellers concerned that the US Internet sales taxes have had much of an impact on their sales to Americans, although admittedly COVID has likely given many sellers a lot less to complain about.

[lotzofuniquegoodies]

@marnotom! 

Maybe not such a big deal with the US customers. Average state tax is in the 7% mark. 20 % could sway a UK buyer one way or the other and possibly make them look a little harder to find locally. Throw in expensive international shipping to the total and it adds substantially to an orders final bottom line.

-Lotz

PS. In the past 70 - 80 % of my orders were to the USA and the majority of the profits. In the last year bulk have been Canada with now random low value orders to the USA. A couple of months I had more orders outside N. America in relationship to the USA.