The total amount you collect from a customer is taxable in most countries (EU/UK/Canada/Mexico/Australia/etc). (Product Total, shipping paid by customer, insurance paid by customer, minus discounts given to customer).
The ONLY thing Shipstation includes on the USPS and UPS customs declaration information is the product total.
I brought this issue to the attention of support & the response was "Ultimately, these customs documents are generated by the carrier, outside of ShipStation, and returned to us along with the label. We are currently limited in how much we can modify them."
This is not correct. You have to provide these amounts to the USPS and UPS Apis in order for them to show up on the document.
There's a spot for shipping charges on the USPS labels and UPS customs form. Shipstation has this information in the order whether it's a manually created order or an imported order. They're just leaving it blank.
While the customer is going to get a lower customs bill, shippers knowingly providing a false shipment value is customs fraud. I wouldn't advise using shipstation for international shipments where you are charging the customer for shipping or insurance. If you're offering free shipping to customers, then it's not an issue.
Hey there @RobC,
Thank you for your patience while we reached out to UPS to confirm that we are compliant.
They let us know the following: "It is requested that the description and the merchandise value is declared in the commercial invoice, however, the shipping cost is not used for customs calculation, the shipping fees will be charged to the UPS account at the time the label is created and the shipment processed. The information we [UPS] use to calculate the import charges is based on the merchandise description and commercial value."
I hope this helps clear any worries you may have had! 🙂
This is not the shipping fees paid to UPS that's the issue. This is the shipping charges paid by the customer, which are taxable and must be included on the customs declaration form. You are leaving this blank.
This is not a UPS issue. The same is true for the USPS labels you print.
"After July 1, 2021, all goods imported to the EU valued at up to 150 euros (approximately $178) will be subject to VAT and items valued at more than 150 euros will be subject to VAT and duties. VAT rates are different for each EU country based on the service and type of product being delivered, with most VAT fees ranging around 20% of the total cost (sales price plus shipping). "
Can I get a response please? Again, this isn't an issue specific to UPS, you are also not declaring the full taxable value when printing USPS labels.
It can be a bit of a surprise to realise that VAT is charged on shipping in the UK. When we buy something in a shop on the High Street we don’t really think about VAT because it is included in the price. When you order something online if the company is VAT registered then VAT is added to the delivery cost. This is because it is a tax applied on services as well as goods. Arranging postage and delivery of an order is considered to be a service. You may have spotted above that postage stamps are exempt from VAT and that wasn’t a typo. Postage stamps themselves are VAT free but when you post an item to a customer you are providing a service and that’s where VAT comes in.
Additionally, not charging VAT on shipping would create an opportunity for tax evasion that HMRC would be keen to avoid. If delivery was VAT free then the cost of goods could be reduced and shipping costs pushed up as a way to avoid paying tax."