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What is an International Tax ID?
What is an International Tax ID?

Learn about how you may need to enter a tax ID when making your label if sales or VAT taxes were prepaid for your international recipient

Updated over a week ago

The International Tax ID field is optional

  • Enter IOSS, HMRC, VOEC, or EORI Numbers: This field is where you'll enter an IOSS, HMRC, VOEC, or EORI number if you have one.

    • Provide a Tax ID if Taxes Were Prepaid: You'll only want to include this Tax ID in your customs form if you're shipping an order to an international customer AND that country's sales taxes or VAT (value added tax) was prepaid when you made the sale.

      • By including the Tax ID, your customer won't have to accidentally pay those same taxes again when they receive the package.

  • When to Include a Tax ID: You only have to worry about including a Tax ID when creating a label in Pirate Ship if you made the sale on a marketplace OR if you've chosen to opt into a foreign country's tax system for your website or sales channels.

    • If neither of those is true, you do not need to include an International Tax ID when creating your label.

You probably only need to do this if you sell on marketplaces like eBay, Etsy, or Amazon

  • Marketplaces Collect VAT Already: Some countries (like all the countries in the European Union) require international online marketplaces like eBay, Etsy, or Amazon to automatically collect and prepay any VAT taxes that your customer owes their country for the sale.

    • Value Thresholds for Prepaid Taxes: Most countries have thresholds for this, so for example, in the EU the taxes can only be pre-paid if the order is worth €150 Euros or less.

      • Whenever those marketplaces are prepaying those taxes, they'll give you a Tax ID number. For example, for the European Union, this is known as an IOSS number. You'll need to enter the number into the International Tax ID field in Pirate Ship when creating the label.

You don't have to do this if you're selling through your own website

  • Selling Through Your Own Website: When you sell products through any other sales channel besides a marketplace (like your own website on Shopify, WooCommerce, Squarespace, etc., or over the phone or email) then you're not required to do anything, UNLESS:

  • We Don't Recommend Prepaying VAT: In general, we don't recommend opting to prepay your customers' taxes because it's a huge pain in the peg-leg, and your international customers are probably used to paying their country's import and sales taxes.

How to format your International Tax ID number

  • Formatting an IOSS Number: When entering any IOSS number in the International Tax ID field, begin with the letters "IM" and follow that with the 10-digit IOSS number.

    • Here's an example of how the proper formatting looks: IM1234567890

  • Formatting an EORI Number: If you're entering an EORU number for a recipient in the EU, its format will be two letters followed by seven digits.

    • Here's an example of how that formatting looks: DE1234567

International Tax ID numbers are NOT printed on the label

  • Not on the Label: If you enter a Tax ID number, don't be alarmed if you don't see it on the label! It's usually not printed on the label (though it may have to be, depending on the shipping service and country).

    • If you don't see it, don't worry; the foreign country will pull the Tax ID up electronically using the tracking number and verify the taxes were paid.

What if you don't have a Tax ID, or forget to include it?

  • No Tax ID Provided: If you don't have a Tax ID, don't worry! The recipient will simply have to pay any sales taxes or import duties that their country charges for international trade.

    • This is a normal part of ordering goods from abroad; every country has taxes and tariffs 👍 We always recommend setting an expectation with your customers that they may have to pay these, just in case they're surprised.

Which countries have systems like this?

  • The European Union (EU): The EU calls its VAT prepayment system the Import One Stop Shop (IOSS) and is looking for an IOSS number in the Tax ID field.

  • Australia: Australia requires that online sellers with annual sales of $75,000 AUS or more register with the country's Taxation Office and pay a Goods and Service Tax (GST) of 10% on shipments containing low-value goods (shipments with a customs value of $1,000 AUS or less). You can read more about GST registration here.

    • If you use the eCommerce marketplace Etsy, Etsy will automatically collect GST on your behalf for orders made by your Australian customers and build it into the purchase price 👌

    • When this happens, be sure to include in your customs form Etsy's Australian Reference Number (ARN): 3000 0920 7152, as well as the item total, shipping costs, GST charged, and order total

  • The United Kingdom (UK): The UK has a VAT prepayment system where you sign up with Her Majesty's Revenue and Customs Department to get an HMRC number.

  • Norway: Norway has a VAT prepayment system called VAT On E-Commerce where you use a VOEC number for shipments worth 3,000 NOK or less.

Chat with ARRrrr crew if we can help in any way

Any questions about international tax IDs, Matey? Click the blue chat icon and let us know how we can help - we ARRrrr here to lend a hook! 😃

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