EU VAT RULES CHANGE
As of July 1, 2021 the European Union has implemented a new VAT (value-added tax) scheme, eliminating the €22/$26USD VAT de minimis, which means VAT is now due on all orders, regardless of value. This new rule impacts all 27 member countries of the EU including the UK.
How does this impact recipients:
VAT is now going to be collected after import and prior to delivery by the carrier of the shipment. The carrier is always the local country postal service. For these methods, UPS will deliver the package to the destination country where the local postal service then takes ownership of the package and delivers it to the final address.
Who is responsible for VAT payments:
The recipient of the order is responsible for paying these fees to receive their package. The fees are based on the value of the item(s) being shipped and is roughly 21% of the total item value.
The value of the items is determined by Printfection’s cost to produce those products. This cost is a lower amount than you as a customer pay per-unit as it does not take into account margins, shipping from the decorator to our fulfillment center or setup fees.
What Campaigns and Shipping Types are impacted:
At this time, this change ONLY impacts the LowestCost and LowestCostwithTracking shipping methods. These methods are the default methods for Giveaway and Collection Campaigns.
How can you avoid your recipients needing to pay VAT fees:
For Giveaways you can turn on the ‘Shipper Pays Customs’ feature. While this feature does increase the cost of shipping per package it will prevent your recipients from needing to pay VAT to receive their packages.
For Collections you can manually change the shipping method in a CSV prior to importing the file or can manually change the shipping to ‘On-or-before’ within the manage page before approving orders.
For Drop Ships you can use the ‘On-or-before’ or ‘Guaranteed’ shipping options.
What happens if the recipient refuses to pay the VAT:
The shipment will be returned to sender, i.e. Printfection, and we will restock the items at no cost to our customers as long as the customer is an active subscriber to our platform and the item is not archived. International returns can take anywhere from 1-12months to be returned to sender.