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Everything You Need to Know About UK and EU VAT on Discogs
The tax landscape around the world continues to evolve with many countries putting the responsibility for tax compliance on marketplaces like Discogs. The VAT changes that came into effect July 1, 2021, for the United Kingdom and EU impact Discogs’ buyers and sellers around the world, so it’s important to get up to speed on what these changes entail and how they affect your buying and selling on Discogs. We’re making key changes to ensure selling to buyers in the UK and EU remains viable for all sellers while reducing some of the administration involved so you can focus on the parts of selling music that you love.
Go to the Discogs Help Center for a more detailed breakdown of UK and EU tax.
Supply of Goods VAT
There are two supply of goods VAT scenarios: 1) sales where Discogs is responsible for collecting VAT as a deemed supplier (import VAT), and 2) sales where sellers are responsible for collecting VAT. Discogs is responsible for VAT when goods are imported into either the EU or UK and the buyer is not VAT registered. Sellers may be responsible for VAT when goods are sold within the EU or within the UK and the buyer is not VAT registered.
When Discogs is the “deemed supplier”, import supply of goods VAT is levied when goods are imported into the UK and the EU from other countries. Because the UK is no longer part of the EU, supply of goods VAT applies when goods are imported into the UK from the EU or, conversely, goods are imported into the EU from the UK. Discogs already handles supply of goods GST in Australia and New Zealand, so some of you may be familiar with this tax if you sell into either Australia or New Zealand.
Intra-UK and Intra-EU Supply of Goods VAT
Discogs will not be assessing VAT on intra-EU or intra-UK orders beginning on July 1st, as our original announcement suggested. While some sellers may be responsible for supply of goods VAT on intra-EU or intra-UK orders, Discogs will only assess supply of goods VAT (import VAT) on orders to be imported into either the EU or UK by sellers located outside those countries. Discogs will assess VAT on these orders because, as a marketplace facilitator and deemed supplier, we are responsible for collecting, reporting on, and remitting supply of goods VAT on goods imported into either the EU or UK.
We are actively working to provide EU and UK sellers, including sellers in Northern Ireland, with the ability to select the countries in which they wish to collect VAT on intra-EU and intra-UK orders. Providing this service will allow sellers to manage their VAT responsibilities for themselves. VAT regulations are very complicated, as a result we strongly encourage our sellers to seek advice from their tax advisors to determine where they are responsible for collecting VAT when selling to intra-EU and intra-UK buyers.
Who is impacted by import supply of goods VAT?
Sellers worldwide selling into the UK or EU.
Buyers in the UK placing an order with a seller outside the UK.
Buyers in the EU placing an order with a seller outside the EU.
How is import supply of goods VAT calculated?
For orders placed on or after July 1, 2021, supply of goods VAT will be added to the total order value which is the item amount plus shipping costs. The buyer’s shipment destination country will determine the VAT rate. Every country with a VAT scheme sets their own VAT rates. This includes each individual EU country.
When and how is import supply of goods VAT charged?
Supply of goods VAT will be applied to all Discogs orders imported into the UK from outside the UK or into the EU from outside the EU. Supply of goods VAT will be applied at or under a certain low-value goods threshold, as follows:
The UK low-value goods threshold is £135.
The EU low-value goods threshold is €150.
Supply of goods VAT is to be paid by the buyer as part of the total order cost. UK and EU VAT will be automatically calculated and added to the order total. Supply of goods VAT will be collected from the seller in the monthly Discogs sales fee invoice. We are currently working on a solution that will free sellers from collecting taxes such as VAT; we’ll have more to share on that soon.
What happens if the total order value exceeds the import supply of goods VAT threshold?
If the total order value (including shipping costs) is over £135 for orders imported into the UK, or €150 for orders imported into the EU, the supply of goods VAT becomes the responsibility of the buyer and will not be collected through Discogs.
How do you prove VAT has been paid on an order to avoid getting charged again elsewhere?
All orders shipped into the UK or EU must be accompanied by a commercial invoice. The seller can print the commercial invoice from the order page and will be required to attach it to the order.
The “Print” page has been augmented to provide the necessary information for cross-border shipments, including a customs declaration that the invoice is a true and accurate representation of the actual value of the order. Additionally, every item on the invoice will have a harmonized tariff code. This is a worldwide requirement designed to improve the flow of goods through customs in cross-border transactions.
We’ve also improved the order receipt provided to buyers from a simplified VAT receipt to an order receipt that meets all VAT invoice requirements and provides complete details of your purchase. Buyers will be able to print their VAT receipt from the Purchase page.
What is happening with the double VAT situation with some buyers?
Discogs is aware that some buyers in the European Union are being charged VAT twice. First, the tax is collected by Discogs when you purchase an item, and second, a postal service provider collects it again when that item is imported.
The EU Commission, a governing branch of the European Union, has acknowledged that cases of double taxation are an issue and proposed a temporary solution. Discogs is closely monitoring the EU Commission’s progress on this double VAT issue and, if possible, will implement a solution once all requirements are known.
Submit tax information digitally when purchasing an international shipping label.
Postal services and customs agencies increasingly rely on digitally submitted tax information to verify that tax has been paid, especially tax charged by marketplace facilitators like Discogs. Without this digital information, they may charge VAT to the buyer again, or hold the shipment until the buyer is able to prove that the appropriate tax has already been paid.
Examples of information that must be submitted digitally when Discogs charges tax on an order include:
|Country Ships To||Information Required|
|European Union||Discogs’ iOSS number and EORI number for orders totaling €150 and below, except where buyer is VAT-registered and provides a valid EU VAT ID.|
The HS tariff code for the items in the order.
|United Kingdom||Discogs’ UK VAT number and EORI number for orders totaling £135 and below, except where buyer is VAT-registered and provides a valid UK VAT ID.|
The HS tariff code for the items in the order.
Print the commercial receipt from the order page and attach it to the outside of the package.
- Use a clear packing envelope to attach the commercial receipt to the outside of the package. These can usually be found at your local postal service or office supply store.
- For smaller packages, use your print settings to shrink the size of the Commercial Receipt to fit on the outside of the package. Alternatively, you can fold the Commercial Receipt to fit on the package. Be sure that the buyer’s shipping address and Discogs’ tax number (such as Discogs’ iOSS, OSS, UK EORI, or GST, number) are clearly visible.
Write tax information on the package in black marker.
This is an optional additional measure. If tax was collected by Discogs at the time of purchase, you can indicate this by writing “Tax Collected” and “Commercial Receipt attached,” as well as the appropriate Discogs’ tax number on the front of the packaging.
VAT in Reporting
For sellers’ reporting purposes, any supply of goods VAT or electronic service fee VAT (existing tax on Discogs sales fee) that has been applied to orders will be included in your Marketplace order data exports.
Supply of Goods VAT Exemptions
If you are a VAT registered buyer and supply a valid VAT ID in your Seller Settings, you will not be charged supply of goods VAT on Discogs orders. If you have not yet supplied your valid VAT ID to exempt you from Discogs collecting Supply of Goods VAT on your behalf, you will need to save your VAT ID on the Seller Settings page. We understand this may not be intuitive if you are not currently a seller on Discogs. We hope to provide improvements to these settings for you soon.
From July 1, 2021, all VAT and GST IDs (VAT or GST registered in the UK, EU, New Zealand, or Australia) entered in your Seller Settings will be validated on a daily basis. If your VAT or GST ID becomes invalid, we will remove the invalid ID and will notify you with a request to enter a new, valid VAT or GST ID. VAT or GST will be charged until you provide a new, valid VAT or GST ID.
UK and EU VAT FAQ
IOSSWhat is IOSS?
IOSSDoes Discogs provide the IOSS number or does the seller? Or both?
IOSSAs a buyer, where can I see Discogs’ IOSS number and the supply of goods VAT collected on my order?
Commercial ReceiptWhat is the commercial receipt?
Commercial ReceiptWhy is the commercial receipt important?
Commercial ReceiptWhat is a HS0 or HST code?
Commercial ReceiptAs a seller, can I use my own invoice or receipt instead of Discogs’ commercial receipt?
Commercial ReceiptWhat is the size of the commercial receipt?
Supply of Goods VATAs a seller, how can I ensure Supply of Goods VAT is properly collected at the time of order payment?
Supply of Goods VATHow do I ensure supply of goods VAT is not charged again at the border or elsewhere?
Supply of Goods VATHow is UK and EU supply of goods VAT charged if the order total (item amount plus shipping amount) is above the low-value supply of goods VAT threshold of £135 or €150, respectively?
Supply of Goods VATWhen an order is above the £135 or €150 threshold, will the buyer be notified by Discogs that supply of goods VAT will need to be paid on the landed item?
Supply of Goods VATAs a seller who is not located in the UK or EU, should I have a VAT ID in order to ship goods to buyers in the UK and EU?
Supply of Goods VATHow should the seller handle multiple paid orders from a single buyer which exceed the £135 or €150 low-value good threshold?
Supply of Goods VATI’m selling only second-hand items. Hasn’t tax already been paid on these items when they were first bought?
Supply of Goods VATIs Switzerland included in Discogs’ supply of goods VAT collection?
OtherDo I risk getting negative feedback if a buyer gets upset that I won’t mislabel a parcel to avoid customs fees?
Others any personally identifiable information included when Discogs remits VAT?
For buyers and sellers located in Northern Ireland, please take a few moments to review the following actions and to update your settings and location in your Discogs account, as appropriate to your particular situation.
If you are either a buyer or seller and have a valid tax ID for Northern Ireland, you may save it in your Settings. All tax IDs saved to your settings will be validated upon entry and then on a daily basis going forward.
If you are a buyer located in Northern Ireland, please be sure to update your Shipping Address country in your Buyer Settings. You may select Northern Ireland from our drop-down list.
If you are a seller located in Northern Ireland, please be sure to update your Ships From Country in your Seller Settings. You may select Northern Ireland from our drop-down list.
For now, shipping policies will map Northern Ireland to UK shipping policies. In the near future, we plan to provide you with the option to segment Northern Ireland out for any unique shipping policy plans you may require.
These changes come at a time when buying and selling online is more popular than ever, and cross-border shipments are the norm. With Discogs’ support for UK and EU supply of goods VAT, we aim to make buying and selling between countries as effortless as possible for sellers and buyers to connect around the world. The inclusion of UK and EU VAT on Discogs joins existing support for sales fee VAT, GST in New Zealand and Australia, sales tax in the United States, and JCT (Japanese Consumption Tax) in Japan, with more to come.
This post was updated on April 7, 2022, to include an FAQ. Last updated July 1, 2021, to reflect changes to intra-UK and intra-EU supply of goods VAT collection, and new information about Northern Ireland.
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