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Drop shipping to Europe: New challenges and opportunities

Online shoppers in EU states are buying fewer goods from outside Europe. It’s all to do with new VAT rules.

 A consumer association study reveals that 44% of respondents are buying fewer goods from outside the EU. This follows the decision by EU lawmakers to scrap the VAT exemption on low value goods. Previously, goods valued at less than €22 were not subject to import VAT. As of 1 July 2021, all goods are subject to VAT. 

The findings echo recent research that shows e-commerce shoppers in the EU have been affected by increased prices and new customs charges. 

For businesses that drop ship goods to customers in the EU, the new VAT rules present a challenge. 

Drop shipping & VAT: Improving the customer experience

Fortunately, the EU’s e-commerce VAT rules also provide an opportunity to make drop shipping more efficient. 

Specifically, the new Import One Stop Shop (IOSS) makes drop shipping simpler. Using the IOSS, you can account for the VAT on all your sales throughout the EU with a single VAT return. 

Importantly, the IOSS also improves the online customer experience. There are two main advantages for customers. First, VAT is already included at the point of sale. There are no surprise VAT charges or customs fees when the courier delivers the goods. 

Secondly, goods shipped using the IOSS are fast-tracked at customs. So consumers should experience fewer delays from retailers that use the IOSS to manage import VAT.

Easier for you, better for your customers

In short, the IOSS benefits the seller and the customer. For e-commerce retailers, managing your VAT obligations is much simpler with the IOSS. For your customers buying goods from outside the EU, the IOSS promises faster shipping and an end to those annoying surprise charges. 

If you’re looking for a smarter way to fast-track your sales in Europe, get in touch with the e-commerce VAT specialists

 

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