Etsy / Click & drop adding EU VAT on to CN22 customs form total

[circuitbenders]

I'm not sure if this is a technical issue at all, or if it is, whether is a problem with etsy or with Royal Mail Click & Drop, but it doesn't seem to happen with ebay sales.

Basically there seems to be something weird going on with my etsy where sales to the EU seem to have the cost of the VAT the buyer paid, added on to the total on the CN22 customs label printed from Click & Drop, rather than the cost of the postage.

I'm in the UK, so if someone from an EU country with a 20% VAT rate buys something from me at £100 plus £10 postage then they pay an additional £22 to etsy in VAT (20% of £110). You would think that the amounts automatically filled in on the CN22 customs form would be £100 for the item, and £110 in total including the shipping, but for some reason that i cannot work out the total will be £100 for the item, and £122 in total. It appears to be adding the VAT cost to the total instead of the postage cost. That is completely wrong!

Looking back on my past orders reveals etsy orders have always done this, but i only noticed it recently when someone in Germany bought something for £115 plus £15 shipping. This shouldn't be a problem as the total on the customs form should of come to £130, which is under the limit to use the IOSS system. Due to etsy doing this weird thing the total on the customs form came to £139.70 which is above the IOSS limit and the buyer got charged VAT again by German customs despite the fact they'd already paid VAT and it was actually shipped using the IOSS system! That £139.70 total value came from etsy charging the buyer £24.70 in VAT on the £130 order total, but then on the customs form adding the £24.70 VAT to the £115 item value rather than adding the postage cost.

Surely this can't be right, as it means EU buyers sometimes end up paying VAT on their VAT payment! Does anyone else get this happening?
It  must be an etsy issue rather than click & drop as it doesn't happen on any other sales platform. Its as if someone at etsy has just set the wrong box to add to the total and its adding the VAT rather than the postage.

[FancyTogs]

The IOSS limit for the EU is €150, which is calculated as the "intrinsic value", which is for goods only excluding delivery.

The £ GBP value for the EU IOSS threshold will vary depending on the currency conversion rates used.

Lawrence (Clare's other half)

[circuitbenders]

Yes i know, that wasn't the point i was making.
The point is that between them etsy and click&drop are somehow adding the VAT amount onto the total on the customs form, which is completely wrong. Its just a random result of this happening that means it sometimes takes the total value on the customs form over the IOSS limit, when the amount actually paid meant the package could be shipped using IOSS. Some customs departments seem to think this means they have to charge VAT again, despite it clearly saying IOSS on the shipping label.

[FancyTogs]

@circuitbenders 

I know that was not point that you were making

and my point is

a) that the value for being under the IOSS limit should be calculated on goods only, excluding shipping

and

b) that the GBP value is irrelevant, it is the € EUR value that matters

I can't do anything about Etsy's software.

The requirement for VAT to be charged by customs should be determined by lack of the IOSS number in the electronic customs data. What the customs offices actually do is out of our, or Etsy's, control, as long as the data has been provided correctly by Etsy and your carrier, and you have packaged with the required documentation (ie. commercial invoices). It is then upto the customer as the importer to query any incorrect VAT charged by their customs office, or request a VAT refund from Etsy.

Lawrence

[kayleighradcliffe]

On my Click and Drop account the shipping price has never been added onto the total cost. It used to add the VAT onto the total cost though but at some point this year it started to list the item price only. I've just checked my recent IOSS ones and the total is just the total of the item price. It might be worth emailing or phoning Click and Drop to ask about it. 

[circuitbenders]

Hmmm, its very possible i've just assumed it was adding the postage cost on the customs form as the total was always higher than the value of items listed, and it was actually adding the VAT all the time even though its clearly not meant to be. 

[carolinebeadbug]

Please excuse me if I am adding this to the wrong thread. This is the first time I have commented on the forum and was not sure how to start a new thread.

I sent a parcel to France, the total was £14.57 including postage and customs Tax. I marked everything on the package as I usually do, stating that the VAT had been collected by Etsy and giving Etsy IOSS number and giving the amount of the order in Euro's.  I've just received a message from the customer telling me that she could not collect her package unless she paid 9 Euro. So now I am going to have to pay the customer the 9 Euro's that she had to pay.  This is not the first time this has happened to packages sent to France.  Does anyone else come across this issue and is there anything that Etsy can to help stop issues like this.

[LeatherForPet]

import charges are the customer's responsibility not yours . She has to pay import fees , not you 

[Spellbinderie]

@carolinebeadbug 
You say "giving Etsy IOSS number".  Giving where?
It has to be electronically submitted, can't be written on the customs form.

Did you also include an invoice on the outside of the package?

If you used Etsy labels, then the IOSS number was submitted correctly and you can have the buyer contact Etsy for a VAT refund.

[carolinebeadbug]

Sorry to be a bit stupid, but I use Etsy postage for most of my EU orders and have never noticed Etsy IOSS number on the postage label.  Thank you for the info about including an invoice on the outside of the package. I will do this from now on.  Thank's

[Spellbinderie]

@carolinebeadbug 

Etsy codes the IOSS number into the etsy label barcode so it isn’t visible until scanned.

if you send to the EU without using Etsy labels you need to have RM or other courier input the code for you.

[circuitbenders · Accepted solution]

If anyone else has the same problem i originally asked about, before this thread was derailed, i think i might have discovered a solution.

It doesn't make much sense to me, but on click & drop after you've clicked on 'apply postage' and entered your customs details, theres a small tickbox just next to the 'apply' button at the bottom of the page thats labelled 'update order value'. On my click & drop if i leave this box unchecked then for some unknown reason it adds the VAT the customer paid onto the total value on the customs form. If i check this box then it just uses the actual value of the contents of the package on the customs form as it should do.

I have no idea why this appears to be the case or if its just my click & drop that has this problem, and it seems neither did the guy i spoke to from Royal Mail earlier!