Properly filing tax information is essential for ensuring your packages move through customs without delays. This article explains the key tax identifiers required for shipping and provides guidance on how to add them to your shipments in Shippo.
EORI
An EORI (Economic Operators Registration and Identification) number is a unique identifier required for customs clearance within the European Union (EU). It applies to all customs operations, including import, export, and transit.
Why is an EORI Number Important?
- It ensures efficient customs clearance, supporting statistical and security processes.
- A single EORI number is valid across all EU Member States, simplifying identification for both economic operators and customs authorities.
Who Needs an EORI Number?
-
Economic Operators in the EU:
Businesses established in the customs territory of the EU must have an EORI number for customs activities. -
Economic Operators Outside the EU:
Businesses outside the EU must register for an EORI number for activities like customs declarations, Entry Summary (ENS) and Exit Summary (EXS) declarations, temporary storage declarations, or acting as a carrier. -
Other Persons:
Non-business entities may need an EORI number if required by national or EU legislation or for specific customs-related activities.
How to Apply for an EORI Number
- For EU-Based Operators: Apply to the customs authority in the EU Member State where your business is established.
- For Non-EU Operators: Register in the Member State where the first customs operation will take place. If you have multiple establishments in the EU, you can choose to register in any of those Member States.
EORI Number Format
An EORI number includes:
- A country code of the issuing Member State (2 letters).
- A unique identifier within the Member State (up to 15 alphanumeric characters).
For example: DE123456789 (DE = Germany).
For more information on EORI, visit the European Commission website.
Merchants will need a GB EORI number if they are moving goods:
- between Great Britain (England, Scotland and Wales) or the Isle of Man and any other country (including the EU)
- between Great Britain and Northern Ireland
- between Great Britain and the Channel Islands
- between Northern Ireland and countries outside the EU
Businesses without a GB EORI can apply for free here.
TaxID/VAT
Understanding Tax IDs and VAT Numbers
Tax ID and VAT codes are essential for determining how merchants are assessed for tax purposes during cross-border trade. Merchants may need multiple numbers depending on the countries they are shipping to or from, as tax requirements vary by region.
Tax ID in the United States
- The Employer Identification Number (EIN) is the tax ID used in the U.S.
-
Requirement:
U.S. Customs and Border Protection (CBP) mandates that all import/export filings include the shipper’s EIN.
VAT in Europe and Beyond
-
VAT (Value Added Tax):
A tax widely used across Europe, the UK, and many other countries. - VAT numbers serve a similar purpose to the EIN but are specific to regions where VAT is applicable.
For international shipments, ensure that the appropriate tax ID or VAT number is included in your customs declarations to comply with local regulations.
|
Note:
|
IOSS (FedEx, UPS, DHL Express, DHL eCommerce and USPS only)
New VAT Rules for Cross-Border E-Commerce (Effective July 1, 2021)
The EU introduced changes to VAT rules for cross-border business-to-consumer (B2C) e-commerce to simplify processes, reduce barriers, and address challenges related to VAT regimes for distance sales and low-value consignments. Here's a summary of the key updates:
Simplified Registration via the One Stop Shop (OSS)
-
Who can register?
Online sellers, including marketplaces/platforms, can register in one EU Member State to handle VAT declarations and payments for all distance sales of goods and cross-border services across the EU. -
Benefits:
Reduces administrative costs by up to 95% and eliminates the need for multiple VAT registrations in different EU countries.
Simplified VAT Collection for Imported Goods
Two new measures make VAT collection easier for goods valued at €150 or less:
-
Import One Stop Shop (IOSS):
Simplifies VAT declaration and payment for low-value imports from third countries or territories. -
Special Arrangements:
Available for distance sales of goods not exceeding €150 where the IOSS is not used.
EU-Wide Threshold of €10,000
-
What’s new?
The previous country-specific thresholds for distance sales of goods have been replaced by a single EU-wide threshold of €10,000. -
Below the threshold:
VAT can be applied in the seller's country of establishment for telecommunications, broadcasting, electronic (TBE) services, and distance sales of goods.
Removal of VAT Exemption for Small Consignments
- The previous VAT exemption for imported consignments valued up to €22 has been abolished.
Now, All goods imported into the EU are subject to VAT.
For more information, visit the European Commission website.
VAT Updates for the EU & UK (Effective 2021)
The VAT rules for the EU and UK underwent significant changes in 2021, affecting how merchants charge, collect, and remit VAT for cross-border sales.
UK VAT Changes (Effective January 2021 - Post-Brexit)
Removal of VAT De Minimis Threshold
- Previous rule: Orders valued up to £135 were VAT-free.
- New rule: VAT is now due on all purchases, regardless of value.
Merchant Responsibilities
- Merchants must charge and collect VAT at the time of purchase for shipments up to £135, including:
- B2C (Business-to-Customer): VAT is charged upfront for all orders.
- B2B (Business-to-Business): VAT rules remain unchanged for shipments above £135.
-
C2C (Customer-to-Customer):
- Orders up to £39: Exempt from VAT and duties.
- Orders between £39 and £135: VAT applies, no duties.
- Orders above £135: Both VAT and duties apply, paid by the shopper.
- Merchants must send shipments as Delivered Duty Paid (DDP) to comply with these rules. This requires collecting the VAT (typically 20%) from the shopper upfront. By default, platforms like Shippo send shipments as Delivered Duty Unpaid (DDU), which may require adjustments in customs declarations.
VAT Registration
- Merchants selling to UK customers must register for a GB VAT number if they haven’t already.
- VAT returns must be filed periodically. Learn more: UK VAT Returns.
EU VAT Changes (Effective July 2021)
Removal of VAT De Minimis Threshold
- Previous rule: Orders valued up to €150 were VAT-free.
- New rule: VAT is now due on all purchases, regardless of value.
Simplified VAT Collection
- Merchants can use the Import One Stop Shop (IOSS) for shipments valued up to €150 to simplify VAT declaration and payment.
- For shipments over €150 or when not using IOSS, VAT and duties will be calculated at customs.
|
Note:
|