Tax, Duty, VAT Information

DTV Electronics is an international company and we do our best to accommodate and facilitate transactions and sales wherever a customer is based. We don’t discriminate nor value commerce with a particular country over another one and therefore cater to a broad range of customers all over the world.

With this in mind, you can probably imagine we get lots of questions about Tax, VAT and Duty and how and what a customer might pay when purchasing products from us. It is not an easy or simple answer as different rules apply to different jurisdictions and change drastically depending on where a buyer might be located.

To cover all bases and try and cater for the largest amount of customers in the most meaningful and simplistic way, we have split our customers into 4 different categories depending on where their orders are being shipped to (UK, EU, NA and ROW). 

These are explained below:

United Kingdom

Customers from the UK currently pay 20% VAT. This amount of VAT is added at the shopping cart on checkout when the address/country is set. There is no duty or import fees to worry about because our orders are currently dispatched from the UK.

European Union

Customers from the EU are normally liable for import VAT upon entry and this rate varies depending on which EU country the goods are being sent to. Goods going through customs usually face delays whilst they are assessed for clearance. To speed up this process, we are part of the iOSS (One-Stop Shop) which means that all goods that are sent by us have the applicable VAT amount added at the end of the order, which will vary depending on which EU country the goods are going to.

For example, if a customer goes to place an order where the goods are being delivered to Germany, upon checkout the German VAT rate (currently 19%) is automatically added on checkout using a custom plugin that is built into our shopping cart. The customer then completes the order and pays for the goods including this added ‘19%’ tax. That means when we send the goods to this customer, they are sent with our European VAT/iOSS number, which signals to the local customs in Germany that the import VAT has already been paid. Customs will scan the label and see digitally that VAT has been declared correctly and therefore the package will not be held up or assessed for VAT again. This makes the process a lot smoother for customers as they don’t need to pay any additional fees/VAT when the goods arrive in their destination country and there are no delays through customs, meaning packages are received much faster. We then have a VAT liability as we collected the VAT upfront from the customer at checkout and have to hand this over to German customs. We therefore run an accounting exercise with our European accountant once a month to assure that all up-front collected VAT is remitted to the relevant European Tax Authorities where it is owed.

iOSS currently has a limitation of €150 and can not be used for orders over this threshold amount (not including the shipping cost or duty/VAT cost). As we already know VAT rates for all the European countries and have an integration plugin built into our website shopping cart for adding the correct VAT rate automatically, we will revert to the ‘DDP’ shipping method for any orders over €150. DDP, or ‘Delivered Duty Paid’ is when the seller takes responsibility for all fees when goods are shipped and then pays them at a later date to our postage carrier. As we know what the various VAT rates are for European countries, and we are confident there are not any other miscellaneous tax or duty components that will be added to the order, we can ship larger orders for customers to Europe in a ‘prepaid’ tax scenario where there are again no further holdups in customs or delays – This results in a much smoother experience for our European customers.

North America

Customers in North America (United States and Canada) do not have any options to prepay import duty or taxes currently from our website. This is because it is very tricky to calculate as it varies state to state and they do not use the VAT system, only Duty based taxes. This means that any money spent on duty can not be claimed back or offset against other expenses. Tariffs also change more frequently so it can be a minefield trying to stay up to date.

Therefore, the best decision for us at this time is to ship all goods as ‘Ex-Works’ meaning they ship without any tax/duty and it is the customers responsibility to pay any import tax/duty upon arrival in their own country.

However, to give our customers in North America the absolute fairest prices we can, we currently display all items on our website as ‘Ex-VAT’. This means they are shown without any VAT added onto the price. UK and European customers have VAT automatically added at checkout when the shipping destination country is set. Therefore, when a customer from North America checks out, not a penny of VAT is added onto the order and the customer gets the best possible price.

The question to ask here is ‘why would a business collect VAT from a non-UK or European customer?’. The answer is very simple, to pocket this money and keep it for themselves. This is why there are many examples of UK and European companies that still charge VAT or incorporate it into their pricing models without realising that the customer they are selling to does not require VAT to be collected on their behalf of the sale because they are outside the UK/EU and therefore ‘out of scope‘ for VAT collection/payment.

By displaying prices as ‘Ex-VAT’ and only adding an additional VAT fee (if required) at the end when the shipping destination is set, do we add VAT to the checkout total. From a customers perspective it can also be reassuring that we are collecting tax effectively and are ‘handing over’ this additional paid VAT to the relevant country appropriately.

ROW (Rest of World) customers

Customers that are receiving goods to ‘Rest Of World’ countries are treated in the same way as North American customers. Therefore, goods are displayed and dispatched with no additional VAT or taxes/duty added.

Orders will ship as ‘Ex-Works’ meaning they are presented without any additional tax/duty and it is the customers responsibility to pay any import duty/tax upon arrival in their own country.

Please Note: It does not matter what country the order is placed from and where the customer is located, what matters is where the goods are being received for VAT/tax/duty calculations.

If you require more information on International Shipping and have a genuine query, please get in touch using the ‘Contact Us’ link or alternatively give us a call on the number displayed on the footer below.

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