Withholding VAT

[dijit]

Been talking with Jon fr Kurasan, he keeps mentioning 'withholding VAT', so that his customers don't get charged with an administration charge when paying VAT on items coming into the country. What is he talking about? And if it's like he says, why don't other companies do it?

[Caliver Books]

Possibly  he has an IOSSS number.  Which means that he pays the VAT to the country ans you have no other charges

Caliver Books/ Minifigs  uses an IOSS number so our customers do not pay anything on receipt

wwww.caliverbooks.com

[fred]

Also lots of miniature companies are so small they won’t need to be VAT registered

[Duncan McDane]

Also lots of miniature companies are so small they won’t need to be VAT registered

Unfortunately when they aren't the buyer still has to pay VAT, custom fees and the handling charges the courier wants... 
Could easily tod up to a 30% increase of the buying price...

[fred]

Nasty. The handling charge is often really quite significant

[Daeothar]

Blech, I was recently burned pretty nastily because of this... 

I bought some Rogue Trader miniatures on Ebay from UK sellers. Ebay does the whole withholding VAT, so when everything goes smoothly, you don't have to pay VAT when the goods enter the country, because the seller already charged and forwarded them.

But in this case, I was charged the VAT by Ebay (there was no other choice, by the way). But then I received two seperate envelopes from the Dutch postal services (I made two seperate purchases) telling me that VAT was due on these!

When they arrived, I had to go to the post office and pay the VAT (plus the extortionist fees from the postal service and another surcharge because I did not pay up front online, but that's a whole other can of worms (I was not able to because of a flaw in their system, which caused the due date to be before the date that they sent the request. They ackowledged this fact, but bluntly told me they couldn't change any of that, and I could file a complaint, but because so many people had the same issue, it would likely not be honored anyway! )).

So I grudgingly paid the VAT to get my minis; I figured it was better to do so and claim afterwards, because having them return to the Uk would make things even more difficult.

But the packages clearly showed the IOSS number on them, so I filed my complaint (twice, because you can only do this per single claim), and had it rejected the very next day, because they simply stated that the VAT was not forwarded on the UK end, so I should try with the seller.

But the seller, legally is not the actual selling individual; that's Ebay, because they have taken over so many of the administrative roles and tasks over the past few years (as per the small print). So of course my complaint with Ebay was rejected too, because on their end, everything had been processed correctly. Of course.

In other words; somebody collected my VAT payment and ran with it, and I have no proof and only 'innocent' involved parties who all point at each other!

In all, I made two purchases, which amounted to €54,- and €63,- respectively, including VAT and postage.

I then had to pay an additional 21% VAT, so €11,34 and €13,23 repsectively. But PostNL, the Dutch postal service involved, charges €4,- per VAT payment at a flat rate as administrative costs. So that's another €8,-. But then they also charged €3,- per package extra, because I didn't pay up front online (see above). So that's another €6,- total. So for two transactions of €117,- in total, which should have been clean, I got charged another €38,57 on top, which I should not have been charged!

That's almost a third extra!

The idea of the whole IOSS thing is decent enough, but the execution is so unclear that either one of two parties is filling their pockets over the backs of countless buyers. I read up on this; mine is not an isolated incident by far; it's been happening to thousands, but unless all duped parties unite, there's nothing any single one can do about it.

Which I why I decided that I will only be buying Ebay goods from EU countries from now on. Which sucks, because most Rogue Trader stuff is to be found in the UK.

Such a shame; I remember being able to buy an entire 2nd hand Space Hulk box on Ebay from the US for a total of a few tenners and some change... 

[Duncan McDane]

Deothar, you're lucky the seller didn't use UPS because they charge you a fee of either 13 or 15 euro - can't find the bill anymore - rather dan 4 euro ( the bare minimum in the Netherlands )  .
But I feel your pain, my friend. And even worse, I hope everything is there and as promised because if the seller has to send you a replacement for free you'll get hit again by at least another 4 euro handling fee, regardless of anything else.

[Andrew Rae]

@Daeothar: unfortunately PostNL is a nightmare for IOSS VAT paid packages. The whole thing about VAT not being forwarded does not even remotely sound like how the system is supposed to work. It’s not even PostNL’s problem, they just have to declare the package as VAT paid and release it for delivery. If the VAT *wasn't* paid, that would be EBay’s problem as there’d be a shortfall in their monthly VAT return.

Many EU countries are using work arounds for the July 2021 import rules rather than the new customs procedures for which the IOSS was specifically designed. This is causing issues. I think the deadline for implementing these procedures is December 2022, so hopefully PostNL will get things right by then.

To most countries, despite the work around systems, the IOSS is working fine. Unfortunately, it really isn’t for Netherlands. NL was one of the countries pushing for a further delay to the July 2021 rules.

I always advise my customers that if they pay VAT at checkout and they’re asked to pay again by their postal service, they should reject the package out right.

[Daeothar]

Deothar, you're lucky the seller didn't use UPS because they charge you a fee of either 13 or 15 euro - can't find the bill anymore - rather dan 4 euro ( the bare minimum in the Netherlands )  .
But I feel your pain, my friend. And even worse, I hope everything is there and as promised because if the seller has to send you a replacement for free you'll get hit again by at least another 4 euro handling fee, regardless of anything else.

Yeah, that'd be true. Luckily though, everything was accounted for.

@Daeothar: unfortunately PostNL is a nightmare for IOSS VAT paid packages. The whole thing about VAT not being forwarded does not even remotely sound like how the system is supposed to work. It’s not even PostNL’s problem, they just have to declare the package as VAT paid and release it for delivery. If the VAT *wasn't* paid, that would be EBay’s problem as there’d be a shortfall in their monthly VAT return...

I already suspected that Ebay would have their things in order, because it would be them that would get hit by the respective countries' customs departments if they did not have all their business completey crystal clear.

But this also means that the extra VAT I paid for the packages was collected by PostNL and I'm pretty sure they have not been forwarding this extra cash to customs 

Here's to hoping that they will eventually sort things out, because I gather that this is hurting UK sales a lot, especially smaller companies. Not to mention our EU based miniature projects... 

[OSHIROmodels]

because I gather that this is hurting UK sales a lot, especially smaller companies.

Very much so 

[Patrice]

The last order of miniatures I received (in France) from the UK was one month ago, and for the first time ever, the local postwoman was very sorry to tell me she had to collect € 31.00 of tax. 

I told her I knew it could happen (but it never had before). She said the bars on the International Tracked label may have triggered it but it could have happened anyway.

Also it seems thats Brexit has awakened customs/VAT tracking in this country, now they are trying to look after all orders from outside the EU. Before it nobody never noticed all the orders we received from the USA or Canada or Australia etc.

[Daeothar]

Thing is, I also regularly order small stuff from AliExpress, and they do have their sh*t in order. VAT is collected during the sales transaction, and I've never been hit for double VAT with them (so far ).

Probably because they're so big, and shift so much volume, that they have their own dedicated offices that busy themselves with this, as opposed to letting local postal services do it for them. Also; more and more stuff gets moved from EU based warehouses.

Anyway; that's how I got my 3D printer 

[Spinal Tap]

Very much so 

As the man said 'F**k business'.

What we have is here to stay, just need to all find workarounds.

[Andrew Rae]

Also it seems thats Brexit has awakened customs/VAT tracking in this country, now they are trying to look after all orders from outside the EU. Before it nobody never noticed all the orders we received from the USA or Canada or Australia etc.

It’s not Brexit, other than that the UK is no longer in the EU. The EU countries noticed the billions they were losing in uncollected or waived import VAT on e-commerce sales, that’s what happened. It’s been planned for years and was implemented in July 2021 after a six month delay due to COVID. Before July 2021, the EU VAT rules were not fit for purpose in an age of cross border e-commerce sales, now they are.

Luckily, France seems to have its act together for IOSS VAT-paid-at-checkout packages, so you shouldn’t run into the double tax problem that Daeothar has. And they’ve obviously got their act together for collecting VAT on non-IOSS packages too!

@Daeothar: it’s not really the case of selling platforms getting their act together. EBay collect VAT on sales to EU customers and they will be doing their VAT returns, just as AliExpress will be. The issue is at the border when PostNL declares IOSS packages. EBay and Ali Express have no part in that, beyond allowing their sellers to use their IOSS numbers. It’s the massively increased volume of packages being declared by PostNL combined with them not using the intended customs declarations means that mistakes are being made.

I’m fairly sure France is using the new customs declarations for all packages under 150 euro, including IOSS VAT-paid packages. I’ve not had any issue with double taxation sending to France, and I guess Patrice has discovered they’re doing a good job collecting VAT that wasn’t paid at checkout, too.
I think the deadline for all EU countries to use the new declarations is the end of this year, so it won’t be like this for the Dutch forever.

[Daeothar]

Andrew, I get that. However, as I understand it, PostNL sorts packages on either being subject to VAT or not, based on many EDI connections (including one with Ebay) that is not properly read and fed to their system, leading to many packages being wrongly tagged as having unpaid duties.

AliExpress have their own sorting center, where they apparently have no issue matching the electronic information to the correct package, hence no double VAT there. they only use PostNL for the domestic leg between their sorting center and the end-customer.

Then again; AliExpress uses a single system for payment and VAT declaration; there's just the one information source, even though packages originate all throughout China, whereas all other countries (or shippers in general actually) have all matter of different systems with which they convey the information, all of which has to be received and processed by PostNL.

And it's there that they fail miserably.

Like everyone else I'm hoping that they will resolve this quickly, because there are quite a few hobby related items that can only reliably be sourced in the UK and I've limited myself to EU based sellers in the meantime (today's purchase in LAF's bazaar excluded, obviously ).