Value Added Tax (VAT) Explained
VAT is a sales tax that applies to products sold in the United Kingdom (UK). It is a consumption tax, which means it is charged based on what you buy. The more you consume, the more you pay in VAT.
What Is VAT?
Value-added tax (VAT) is a tax on the value added to a product during its production and distribution. In the UK, the VAT rate is 20%, which is included in the price of products for UK customers. This means that for customers in the UK, VAT is already included in the product price, and there are no additional charges at checkout for these customers.
When you buy products from Stealthvape, VAT is included in the price for UK customers. For customers outside of the UK, however, VAT will not be included in the price, and it will be removed at checkout.
IOSS (Import One-Stop Shop) and Brexit Changes
Following the UK’s exit from the European Union (Brexit), VAT for orders to EU customers is handled differently. From January 1, 2021, the IOSS system was introduced for EU customers making purchases from businesses outside of the EU.
IOSS is a simplified VAT collection mechanism for businesses selling to customers in the European Union. It allows businesses to collect VAT at the point of sale for orders valued under €150. The VAT is collected during checkout and will be passed to the relevant tax authority in the customer’s country. This means that, for EU customers, you won’t face any surprise VAT charges upon delivery as the VAT is paid at checkout.
How Does IOSS Work?
– IOSS applies only to orders under €150.
– The VAT is collected during checkout.
– The total order value (including shipping) is taken into account for the VAT calculation.
– No further charges (VAT or customs duties) will be due at delivery for IOSS-eligible orders.
For orders over €150, IOSS no longer applies, and the standard customs and VAT procedures are followed for importation, which may involve additional duties or taxes, and VAT will not be collected at checkout.
What Does This Mean for EU Customers?
– IOSS Applies: If your order is under €150, VAT will be collected at checkout and no additional charges will be due on delivery.
– If IOSS Does Not Apply: If your order is over €150, you may have to pay VAT and/or import duties to your local customs authority upon delivery.
Important Note: We cannot declare a lower value on the shipping invoice as this would be illegal. Our order management system automatically submits accurate customs declarations, which include the true value and contents of every order.
Customs Declarations
Customs declarations are automatically submitted electronically by our system and reflect the true value and contents of the order. This ensures compliance with customs regulations and helps prevent any issues with customs authorities.
For customers outside of the EU (e.g., the USA), customs authorities may charge import duties or taxes depending on the value of the goods. For example, in the USA, the US Customs and Border Protection service typically assesses the import duty based on the value of the merchandise, with lower-value items (under $650) generally not subject to high duties.
What Should You Do?
– Check Import Rules: Ensure that the goods in your order can be legally imported to your country.
– Know Your Country’s Import Threshold: Different countries have different rules for when import duties and VAT are applied. Make sure to check the local import regulations in your country before placing an order.
Summary
– For UK Customers: VAT is already included in the price at checkout.
– For EU Customers (Under €150): VAT is collected at checkout through the IOSS system, and no additional charges will apply on delivery.
– For EU Customers (Over €150): Import VAT and/or customs duties may apply, depending on local laws.
– For Non-EU Customers: Import tax and duties may apply on delivery depending on local laws.
Please check with your local authority to confirm what taxes or duties will be applied when importing goods from the UK to your country.