Since July 1, 2021, there are new laws in the EU that regulate how VAT must be collected, remitted and reported. In this document, we will explain what sellers should do to prevent the double VAT charge, and what buyers should do when they have been asked to pay VAT again when the package arrives.
As mentioned in our Sales & Transaction Policy, it is the seller’s responsibility to ensure that they have properly reported all taxes to the local tax authorities. When a seller fails to do so, buyers are often asked to pay VAT a second time.
When shipping internationally, we advise sellers to always:
- Print and attach the commercial receipt to your package.
- Ensure that all tax information has been transmitted digitally when purchasing the shipping label.
If one of the above is not followed, the buyer may be asked to pay VAT a second time when the package arrives. In this case, the seller should refund their buyer the double VAT charge.
Please review our detailed blog post on the matter: International Selling and Shipping. If the seller followed these steps but the buyer was still charged tax a second time, sellers could consider blocking their country in their Shipping Policies so this doesn’t happen again. More information here: How To Block A Country
If the courier asks you to pay VAT a second time when your package arrives, you have two options: pay the double VAT and pick up the package or refuse it and ask the seller for a refund.
If you decide to pick up your order and pay the double VAT, as a first step, you may want to show proof of VAT payment, along with our IOSS number, to the customs agency that is holding your purchase, and/or your local tax authority. You can do so by providing them with the commercial receipt that’s associated with your order. Go to the order page and click on “Print” near the top of the page. If you have access to a printer, you can print this page, or you can save it as a .pdf on your computer and email it to the customs/tax authority.
If the customs/tax agency does not reverse your charge, please write to your seller on your order page to explain the situation. Please let them know that international law requires sellers to submit tax information when shipping to certain countries, and as they didn’t do so, you’ve been asked to pay VAT for a second time.
For further information about the VAT refund process and EU regulations please, visit our blog and the following articles: