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Will your carriers pause EU shipments this month?

By Chris Dawson June 25, 2021 - 8:00 am

There’s a problem coming at the end of the month that no one seems quite prepared for. If you cast your mind back to Brexit and December 2020 we saw multiple carriers pause EU shipments as they didn’t want parcels stuck in transit that were undeliverable. This could be happening again as we approach the 1st of July.

The background is that IOSS comes in with marketplaces collecting VAT on sales to the EU as of the 1st of July. You’ll be liable for collecting VAT on sales to the EU on sales on marketplace valued over $150. That all seems quite straight forward enough but what happens to sales taking place a few days earlier?

If you make a sale during the last few days of June, VAT won’t have been collected on your customers purchases. This will be fine if shipments arrive into the EU before midnight on the 30th of June – the situation will be exactly as it is now. However for any trucks arriving with parcels in the early hours of the 1st of July, the EU will expect VAT to have been collected.

There doesn’t appear to be any easy solution to this problem. Marketplaces can’t collect VAT before the 1st of July as IOSS won’t have come into effect. You may not even know if a sale to the EU will see the goods arrive into the EU before the 1st of July for sales late in June.

You might think that this isn’t a particularly big issue as in the worst case the consumer will just be hit with VAT demand on the doorstep along with an admin charge, but in reality what could happen is trucks held up at the ports as they don’t have the correct paperwork (or rather electronic pre-advice) for their load.

We’ve asked around the industry and spoken to a couple of carriers and some logistics experts and no one seems to know the correct course of action. There have been some hopeful mumblings of leniency on the part of the EU and a hope that goods will just be allowed through the ports and on to their final destination, but this is the EU and it’s not like we’ve not had plenty of notice that VAT regimes are about to change.

The logical step for carriers will be to avoid having parcels in their networks that don’t have the correct electronic pre-advice which would have to be returned to senders if they are undeliverable. This in all likelihood taking the decision to pause EU shipments for a few days.

The headache will then be on merchants and retailers to ship goods for which marketplaces haven’t collected VAT under IOSS and that’s going to involve a ton of paperwork to then get the goods shipped. Frankly, if you sell on marketplace IOSS and no VAT collection for merchants on sales under $150 makes things very simple and easy but that’s only after the 1st of July.

We would recommend speaking to your carriers and asking what will happen to parcels shipped after the 25th of June. Prior to then they should arrive in the EU before the 1st of July, but for sales on Monday the 28th to Wednesday the 30th that might not be the case.

From the 1st of July when marketplaces start to collect VAT all you need do is pass the marketplace IOSS to your carrier (check in advance how they expect to do this) and shipping will be trouble free. However, even if your carrier doesn’t pause EU shipments for a few days at the end of this month you may wish to temporarily pause sales yourself to avoid creating a headache for which no one appears to have a solution in place.

  • Merlo
    4 months ago

    Stopped all our EU sales earlier this week to avoid this.

    Amazon haven’t yet notified what field they will populate with their IOSS therefore integration can’t take place. Ebay allowed integration and released their IOSS.

  • 4 months ago

    @Merlo
    Would you happen to have details of their IOSS number/reference or a link to where it can be found. At least I can be sort of ready !!

  • 4 months ago

    @Merlo
    Would you happen to have details of ebay’s IOSS number/reference or a link to where it can be found. At least I can be sort of ready !!
    I searched for details but couldn’t find it.

  • 4 months ago

    @Merlo
    Would you happen to have details of ebay’s IOSS number/reference or a link to where it can be found. At least I can be sort of ready !!
    I searched for details but couldn’t find it.

  • Paolo
    4 months ago

    Yes please! I’d like to know where to find this illusive IOSS number too please.

  • lee graves
    4 months ago

    and so would I……..

  • 4 months ago

    Please be informed that eBay‘s IOSS number is: IM2760000742

  • Mr Jones
    4 months ago

    OK so I have eBay and Amazon accounts, connected to multichannel management software, which then connects to a warehouse management system, which then connects to a carrier management system to generate carrier labels.

    AND NO ONE CAN TELL ME ANYTHING! about integrations eBay and Amazon IOSS numbers. I’ll have to turn EU off until this is sorted.
    I assume the IOSS number is fixed? If so does anybody have eBay or Amazon’s so I can at least get my software people to hardcode the IOSS number in to the carrier API label request?

  • Simon Everett
    4 months ago

    @Merlo
    Many thanks.

  • Simon Everett
    4 months ago

    For anyone wanting the Ebay link /pdf it’s
    https://developer.ebay.com/cms/files/connect-2021/eu_vat.pdf

  • Paul Middleton
    4 months ago

    We have been told by DHL that it won’t be an issue like it was on January 1st. If the shipment was posted prior to July 1st it definitely won’t have an IOSS number at all, so will be treated as it is now.

    Honestly I think this article is hyping things up a bit too much, especially considering it’s not mandatory to use IOSS unless it’s a marketplace purchase under €150

  • 4 months ago

    Hi Paul – so what about an order placed 10pm on June 30th that gets dispatched 9am on July first and has no IOSS?

    You say this is all hype but we estimate 100+ orders just for that small scenario!

  • Paul Middleton
    4 months ago

    If it’s dated/despatched June 30th and has no IOSS. Then it will be treated as it does now, I have been told. That only applies to marketplace orders anyway, as if it’s your own site you’ll be working as usual unless you have an IOSS number in place.

  • 3 months ago

    Still.
    Blue passports

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