Value-Added Tax (VAT) Rates By EU Country

July 14th, 2021 Comments off

Only July 1, 2021, the European Union (EU) introduced new Value-Added Tax (VAT) requirements for all parcels entering EU-member countries. One big change is that products valued at 22 euros (approximately $26) or less now have VAT applied in order for the buyer to take receipt of the product.

What is VAT?
VAT is a consumer tax that European governments use to collect revenue on all goods and services consumed by their residents, including products that were made outside of the EU. VAT is used somewhat to even the playing field for European manufacturers as well as increase tax revenues. Generally speaking, VAT is paid by the buyer to the seller and then the seller gives either all the fees, or a large portion of the fees collected to the EU government where the product was imported.

EU countries are responsible for creating their own VAT rate, but they need to have a standard VAT of at least 15%.

Listed below are the current EU standard rates as of July 1, 2021:

EU Country (as of July 1, 2021)Standard VAT on Taxable goods and services
Austria20%
Belgium21%
Bulgaria21%
Croatia25%
Cyprus19%
Czech Republic21%
Denmark25%
Estonia20%
Finland24%
France20%
Germany19%
Greece24%
Hungary27%
Ireland23%
Italy22%
Latvia21%
Lithuania21%
Luxembourg17%
Malta18%
Netherlands21%
Poland23%
Portugal23%
Romania19%
Slovakia20%
Slovenia22%
Spain21%
Sweden25%

Shipping to EU? New VAT Rules Starting July 1, 2021

June 21st, 2021 Comments off
EU VAT changes starting July 1, 2021

The European Union (EU), a group of 27 countries including Germany and France, will be implementing new trade rules for U.S. sellers beginning July 1, 2021. The EU has modified the Value-Added Tax (VAT) – a tax on goods and services bought and delivered to the EU countries. Sellers in the U.S. will need to understand how to comply with these new laws and prepare for the changes. 

What changes to the EU VAT will take place on July 1, 2021?
Prior to July 1, 2021, no VAT fees were required for commercial goods valued up to 22 euros (approximately $26).  Goods valued at 22 euros or less were able to be shipped into EU countries with no additional fees required for buyers.

After July 1, 2021, all goods imported to the EU valued at up to 150 euros (approximately $178) will be subject to VAT and items valued at more than 150 euros will be subject to VAT and duties. VAT rates are different for each EU country based on the service and type of product being delivered, with most VAT fees ranging around 20% of the total cost (sales price plus shipping).  

Product PriceUntil June 30, 2021Starting July 1, 2021
€0 – €22Exempt – No VAT requiredVAT applied (with IOSS for B2C, or upon import for B2C/B2B)
€23 – €150VAT applied upon importVAT applied (with IOSS for B2C, or upon import for B2C/B2B)
Above €150VAT applied upon importVAT applied with duties (Upon import, Standard VAT Payment)

What are my options for collecting VAT for EU countries?
The new rules give sellers two options:

#1 Preferred Method: Import One-Stop Shop (IOSS): The EU member countries have created a new electronic portal for B2C transactions, known as the IOSS, which makes it easier for online retailers to comply with the new VAT rules. This program is intended to help expedite the Customs and VAT collection process and allow the EU buyer to see the full landed cost including the VAT fees at the point of sale (i.e. inside the shopping cart). Businesses will need to register on the IOSS portal, provide an IOSS tax identification number during Customs creation and provide the recipient’s email and/or phone number along with a Harmonized System (HS) Code for the product being shipped. Online retailers only need to be registered with a single EU member country via the IOSS system to access trading within all 27 EU countries.

Additionally, retailers will need to establish an “intermediary,” a representative located in any one of the 27 EU countries who, representing the online retailer, will submit the VAT payments each quarter as well as process any returns.

Important Note: The IOSS portal is NOT required for U.S. sellers. It is an optional program intended to expedite e-commerce order delivery to EU countries, while collecting VAT efficiently. U.S. sellers who do not register for IOSS will have their packages delivered Delivery Duty Unpaid, meaning the buyer must pay VAT and potential additional customs clearance fees before the shipping carrier will release their package.

#2 Delivery Duty Unpaid (DDU): This option only requires the recipient’s email or phone number, an accurate product description and a HS Code. The downsides to shipping orders using DDU are that if the VAT is not paid at the shopping cart, the buyer in the EU country becomes responsible for paying the fees before they can receive their product. Buyers could get “buyer’s remorse” due to high extra fees required to receive their product and abandon the order, asking for a full refund. 

Additionally, not using the IOSS system can cause items to be held up in customs for lengthy periods of time until the VAT is paid. Overall, this option will lead to a poor customer experience and reflect badly on your business.

Selling to International Buyers using a Marketplace?
Online retailers using marketplaces such as Amazon, eBay and Etsy will have a separate set of VAT rules.  Marketplaces are considered to be involved in the sale and supply of goods, and thus the EU is requiring the marketplace to be liable for collecting and paying the VAT fees. Starting July 1, 2021, Marketplaces will collect VAT from the buyer based on the country of delivery and remit it to the responsible tax authorities. Note: VAT will be collected on the full value of the transaction including shipping costs, as the shipping costs are considered part of the total purchase.

What about Customs Forms?
Your formal customs declaration will now require more information about the items you are sending. Pro forma and commercial invoices must provide clear and accurate data including a description of goods, the quantity of items, itemized values and custom tariff codes.  It is also recommended that you provide an accurate product description and HS Code.  GlobalPost Logistics has a free tool that generates HS codes for any product using the World Customs Organization schedule.

What steps should I take now?
Merchants need to register with the IOSS portal before July 1, as well as find a VAT intermediary like Hellotax, Simply VAT, Taxually or Avalara. Next you will need to make sure your shopping cart has the capabilities to collect VAT at the point of purchase. Most shopping cart vendors are preparing for the July 1, 2021 deadline and have set up special tax rules inside the cart settings page. If you use Shopify, check out the information under “Setting up EU taxes” in the help center section on their website.

Final thoughts.
Registering with the IOSS portal and selecting an intermediary can help your business generate brand loyalty and customer retention by creating a hassle-free VAT collection. July 1 is right around the corner, so make sure you set yourself up for success by complying with these new tax rules.

5 Selling Tips For Amazon Prime Day 2021

June 11th, 2021 Comments off

It’s almost here! Amazon Prime Day 2021 will be on June 21–22 with sales for third-party sellers estimated to surpass last year’s $3.5 billion. Post-COVID items like luggage, makeup and apparel will be top sellers as well as items that were in shortage during the pandemic like fitness equipment, home-office essentials, laptops and gaming consoles. Additionally, the competition will be fierce with other big retailers like Walmart and Target participating in their own yearly sales events. It goes without saying, Prime Day 2021 will be huge. Are you prepared? Here are 5 selling tips to help your business have a successful Prime Day 2021.

Tip #1 Optimize Your Product Listings
There are many ways to optimize your product listing to increase traffic and sales:

  • Focus on short, catchy titles with clear descriptions and copy that is optimized for mobile.
  • Use bullet points to organize information and get to know Amazon’s character limits so you can optimize accordingly.
  • Utilize keywords that are significant to Prime Day as well as similar words people search for that are relevant to your product.
  • Take advantage of A+ Content if you’re enrolled in Amazon’s Brand Registry program.
  • Put emphasis on your product, not the offer.
  • Ensure the product details refer to the product itself—it’s a violation of Amazon’s Terms of Service to mention anything about Prime Day or discounts in the product details.

Your product image also plays an important role in optimizing. Take a look at top-selling products and observe the quality of their images. Your first image should show the product set against a white background while the other images highlight the product’s features. Customers always look at images before text, so make them look appealing.

Tip #2 Don’t Raise Your List Price
Savvy shoppers already use a variety of browser extensions to hunt down deals and track pricing. Raising your list price to show a greater discount not only looks suspicious to customers but can raise a red flag with Amazon, resulting in your account possibly getting suspended. If you can’t provide a discount, it’s better to highlight your product’s superior qualities.

Tip #3 Run Amazon Sponsored Ads
It’s good to have your product fully optimized before creating an Amazon PPC campaign. A PPC ad will increase visibility of your product by showing up when people search for similar items. Automatic campaigns can help you find popular keywords that can be used for your manual campaign with higher bids. To increase the chances of your ad getting seen, avoid bidding on overly popular keywords like “Prime Day.” Make sure to download search term reports and check your maximum bids regularly to ensure your ads are performing.

Tip #4 Run Off-Amazon Promotions
There are many different platforms you can use to drive external traffic to your Amazon Prime Deals:

  • Email blasts
  • Amazon wish lists
  • Blog posts
  • Influencers
  • Affiliates
  • Google Ads
  • Pinterest
  • YouTube
  • Organic social media
  • Facebook groups

If you don’t have a Facebook group or audience, Facebook Ads can help you reach potential customers. Something to keep in mind with Facebook Ads is that if you send the user straight to your product listing it can be difficult to track ad progress as well as can potentially undermine your Amazon keyword ranking. Instead, send traffic to a custom landing page that has the ability to capture email addresses.

Tip #5 Take Advantage of the Halo Effect
The halo effect of Prime Day can significantly help your business long after the event ends. Draw attention to your non-Prime Day deals with targeted ads for popular keywords. This can boost your products in the queue. Notice if your item is included in a “frequently purchased together” category and capitalize on the traffic overflow. Consumers are already in shopping mode during this time, so take advantage of it.

In conclusion, Prime Day 2021 has the potential to be the biggest shopping event of the year and with some research and planning it can be highly profitable for your business. So be prepared, stay focused, and follow the tips above to make it your most successful event yet!

Did you know? Stamps.com has a direct integration with Amazon!
Stamps.com allows Amazon.com third party sellers to easily print shipping labels at discounted rates for UPS® and USPS® shipping services. Get more info on Stamps.com’s Amazon Integration.

USPS to Implement Second Postage Rate Increase in 2021

June 4th, 2021 Comments off
August 2021 USPS Price Increase

The U.S. Postal Service has proposed a second 2021 postage rate increase for mailing services (letters, postcards) to be implemented on Sunday, August 29, 2021 subject to approval by the Postal Regulatory Commission. This would be the second USPS postage rate increase of 2021, with the first rate increase going into effect on January 24, 2021.

It’s important to note the August 2021 rate increase only impacts “Market Dominant” products, which are mail services such as First Class Mail letters, postcards and mailing services. The USPS DID NOT include package services such as First Class Package Service or Priority Mail, which are known as “Competitive” products. (This could change as additional USPS announcements are expected.)

Listed below are the highlights of the proposed August 2021 USPS rate increase:

  • The rate for a First Class Mail Letter (1 oz.) for postage purchased at the Post Office will increase 3 cents to $0.58 from $0.55. Each additional ounce for First Class Mail will cost $0.20, no change from the January through July 2021 period.
  • If you print postage online (via Stamps.com), the Metered Mail rate for a First Class Mail Letter (1 oz.) will increase by 2 cents to $0.53 from $0.51.
  • With a 5 cents discount, printing postage online using the Metered Mail rate provides a 9% discount off the Post Office price.

First Class Mail Letter Rates - as of August 29, 2021

INCREASE PER LETTER - Jan 2021 Rates vs. Aug 2021 Rates
Mailpiece WeightJan 2021Aug 2021Increase
Letters - 1 oz.$0.55$0.58$0.03
Letters - Additional Ounces$0.20$0.20No Change
Metered Mail Letters (Stamps.com Rate) - 1 oz.$0.51$0.53$0.02
Metered Mail Letters (Stamps.com Rate) - Additional Ounces$0.20$0.20No Change
Flat/Large Envelope - 1 oz.$1.00$1.16$0.16
Flat/Large Envelope - Additional Ounces$0.20$0.20No Change
Postcards$0.36$0.40$0.04
International Letters - 1 oz. (County Groups 1-9)$1.20$1.30$0.10
International Postcard (County Groups 1-9)$1.20$1.30$0.10
International Flats - 1 oz. (Country Groups 1-9)$2.40$2.60$0.20

Domestic mail services are increase in August 2021. Certified Mail is increasing to $3.75 from $3.60, a $0.15 increase. And Registered Mail is increasing to $13.75 from $12.90, an $0.85 increase.

Domestic Mail Extra Services - as of August 29, 2021

INCREASE PER SERVICE - Jan 2021 Rates vs. Aug 2021 Rates
Mailpiece WeightJan-21Aug-21Increase
Certified Mail$3.60$3.75$0.15
Certified Mail Restricted Delivery$9.15$9.75$0.60
Registered Mail$12.90 and up$13.75 and up$0.85
Signature Confirmation - Mail$3.20$3.45$0.25
Signature Confirmation - Electronic$2.70$2.90$0.20
Return Receipt - Mail$2.85$3.05$0.20
Return Receipt - Electronic$1.75$1.85$0.10
Adult Signature Required$6.90$6.90No Change
Adult Signature Required, Restricted Delivery$7.15$7.15No Change
Package Intercept$15.25$15.25No Change
Pickup on Demand$25.00$25.00No Change
USPS Tracking Plus - Scan RetentionStarts at $2.10Starts at $2.10No Change
USPS Tracking Plus - Scan + Signature RetentionStarts at $4.59Starts at $4.59No Change

Media Mail rates will increase by an average of 10.865% in August 2021. A 1 lb. package traveling to Zone 8 will be $3.19 in August 2021 from $2.89 in January 2021, an increase of 30 cents.

USPS Media Mail Rates - as of August 29, 2021

INCREASE PER PACKAGE - Jan 2021 Rates vs. Aug 2021 Rates
WeightJan-21Aug-21Increase
1 lb.$2.89$3.19$0.30
2 lbs.$3.45$3.82$0.37
3 lbs.$4.01$4.45$0.44
4 lbs.$4.57$5.08$0.51
5 lbs.$5.13$5.71$0.58
6 lbs.$5.69$6.34$0.65
7 lbs.$6.25$6.97$0.72
8 lbs.$6.81$7.60$0.79
9 lbs.$7.37$8.23$0.86
10 lbs.$7.93$8.86$0.93

Stamps.com Will Automatically Update to the New USPS Rates on August 29, 2021

Once the rates are approved by the PRC, Stamps.com will automatically update all USPS rates inside the software and web-based version (Stamps.com Online) on Sunday, August 29, 2021.

If you are a Stamps.com customer, no additional actions are needed and you will AUTOMATICALLY see the 2021 USPS rates in the platform.

USPS To Change Priority Mail Express Delivery Times

April 30th, 2021 Comments off

The U.S. Postal Service is proposing a delivery time change for Priority Mail Express.

Currently, Priority Mail Express has two guaranteed delivery times within the 1-2 business-day service standards:
Option #1: 12 Noon or 3 p.m. (depending on originating zip code and delivery address)
Option #2: 10:30 a.m. (in select locations, for an extra $5 fee)

The USPS is proposing to eliminate the 10:30 am delivery time and will be adjusting the regular Priority Mail Express delivery from 12 noon/3 p.m. to 6 p.m. on the designated delivery day.

If the Postal Regulatory Commission approves the change, starting Sunday, May 23, 2021 all Priority Mail Express packages will be delivered by 6 p.m. regardless of the originating zip code and delivery address.

The shipping price for Priority Mail Express will not change with this delivery time adjustment.

Get more information on Priority Mail Express.

Categories: USPS News Tags:

Call us toll-free at 1-888-434-0055

Monday–Friday, 6am–6pm Pacific Time