We have heard your concerns and want to offer our current status on the new VAT situation in the European Union.
So what has happened?
Recently the European Union updated their policies for vendors selling commercial goods imported into the EU. What is new is that the Value-Add Tax (VAT) will apply to all goods regardless of value. Formerly, the case was that anything under €22 (or about $35) would not be subject to the Value-Add Tax (VAT). Now, as of July 2021 this is no longer an exception.
Unfortunately, now all orders regardless of value will have to pay VAT.
How are fabric suppliers responding?
Many fabric retailers are responding to the new rules by discontinuing sales to the EU. They are likely responding in this way for a couple of reasons (although their unique rationales may certainly be justifiably different):
Their websites and shipping processes cannot incorporate adding additional costs or account for the new VAT reporting requirements.
They simply do not want to increasing pricing or add to their support/staff requirements.
We have seen fabric stores announce that they are no longer fulfilling orders to EU countries.
How is Big Z Fabric responding?
We have decided that we will continue fulfilling orders to EU customers.
Regrettably this does not mean nothing has changed. As the saying goes, “Nothing in life is certain except death and taxes.” Our approach to this new rule is to put the responsibility onto the customer. Here is the official explanation of how this will work:
“Businesses may also choose not to register for IOSS, in which case import VAT will be collected from your customers by the declarant (e.g. FedEx, or other parcel companies), who will pay directly to the customs authorities in the country of importation/consumption via a monthly payment. Under this scenario, the customer only receives the goods after the import VAT is paid and the goods can only be released for free circulation in the country in which the goods will be delivered to the customer/ importer. “
So to be clear, we are choosing not to register for the IOSS (Import-One-Stop-Shop) program. However, we are still able to ship our fabric to the EU.
It will be important for the customer to retrieve their parcels as quickly as possible to reduce fees and taxes. We felt like this is the most appropriate way forward for our business. We can continue to focus on providing and sourcing the best fabrics with the quickest (and hopefully cheapest) shipping. The declarant and the customer can sort out the VAT changes in the home country when the fabric arrives for pickup.
We hope that you and all customers will continue to buy through Big Z Fabric and that our commitment to continuing to provide as much of a status quo policy as possible works for you and all our great customers. If you have any questions or need help anticipating shipping and other costs please reach out to our support and sales staff via our website or social media.