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China to Europe (EU) Dropship Quora
ePacket is an option. ePacket can be used as a reliable and cheap shipping option, provided your products do not exceed China Post EMS restrictions.
ePacket usually ships within 7-10 business days to Europe. Although it’s not the fastest shipping method, it is much faster than regular mail and is cheaper than FedEx or similar courier services.
Your seller must support ePacket shipping methods. Dropshipping can be handled by a Chinese logistics company if your seller doesn’t support ePacket.
These companies can store your products, and then ship directly to your customers after you have received the orders. This also gives you the opportunity to have the goods quality checked by the company when the goods arrive at their warehouse.
Full disclosure: I work at one of these companies, so if there are any questions, let me be aware. I’m happy to assist you.
Only if inventory is owned by you. Otherwise, you can simply set the expectations for customers. It is okay to be slow. People will wait for the right price and are happy to go slow or fast if they have excellent customer service.
If you are looking to make decent profits, fast shipping is not an option. China -> Europe.
You can ask your supplier if he can ship to China via DHL, UPS or FedEx EMS. Although it is more expensive, it will save you time and money.
Dropshipping agents are a better option than supplier shipping directly. They can help you ship from China into the EU. The agent can help you to check the quality and fulfill shipping requirements. It usually takes two weeks to ship from China to the EU using courier service.
Stocking goods on a regular basis is the best option, but this can be too risky for new dropshippers.
Consider the pros and cons of each option before deciding on the best one.
The European Union introduced a significant VAT reform which will affect all eCommerce sellers that ship to EU customers. We’ll be discussing the changes that will affect dropshippers who ship items from China to the EU in this article.
What has changed in dropshipping since July 1, 2021
Dropshipping from China to the EU has a few new features.
Distance selling thresholds are no longer applicable
Sellers must charge VAT at the applicable VAT rates in the buyer’s country unless they are not located within the EU and their annual sales exceed EUR10,000. If this is the case, (i.e. They are located within the EU, and they do not exceed the annual limit, they will need to add their local VAT.
Imported goods with low value below EUR22 are not exempt from VAT
All goods that are sold to EU end customers will be subject to VAT, regardless of value. To avoid VAT, parcels were often under-declared in the past. However, the EU is taking steps to change this.
The OSS (One Stop-Shop) system was introduced
The OSS’s goal is to simplify VAT returns and facilitate VAT compliance for businesses selling to EU clients (from EU inventories). They will be able to file a single quarterly VAT return and declare VAT, as well as not needing to register for VAT in multiple EU states.
The IOSS (Import-One-Stop-Shop) system is also introduced
It allows businesses to declare and pay VAT for imported items less than EUR150 within a single monthly IOSS VAT Return. This will facilitate imports. We’ll be discussing IOSS and dropshipping to China in the next section.
Online marketplaces will collect VAT for imported goods with a value less than EUR150
Cdiscount, Etsy and AliExpress will charge VAT for imported goods with a total value less than EUR150. Regular import procedures are required for goods exceeding EUR150. You are responsible for VAT if you use Shopify, WooCommerce or Squarespace to sell products on your website.
The reform will affect most sellers who dropship from China or have EU buyers. Suppliers who are not affected by the reform, however, will be exempted.
- Only sell high-value products (worth more than EUR150)
- Exclusively sell to other businesses (B2B).
Dropshipping from China to the EU through the IOSS system
Dropshipping goods with a value below EUR150 is strongly recommended. This will facilitate customs and import procedures.
These are the important things to remember:
All goods imported into the EU must be accompanied by a valid IOSS Number.
Before arriving in the destination country, your IOSS number will be checked by customs. The following information will be included in the package declaration:
- Your IOSS number
- A 6-digit HS (Harmonized system) code
- Name of the product
- Parcel number
- The purchase price is the same value in EUR.
To avoid double taxation, import duties and import VAT will not apply to goods imported under IOSS. It is necessary to collect the VAT at point of sale and make monthly declarations.
You will need an EU intermediary agent to assist you with your IOSS declarations if you are based outside the EU.
Dropshipping from outside the EU and VAT-registered in multiple EU states, you can switch to IOSS to cancel your local VAT registrations.
Standard import duties and VAT will be applied to parcels exceeding EUR150. It is sensible to send items in separate parcels if the customer orders more than EUR150.
You might need to modify your account information if you use Shopify or WooCommerce. Add your IOSS number.
As a Shopify seller, what does the EU value-added taxes reform mean for dropshipping online? What are the best ways to mitigate these potential effects? Let’s look at the details of the Europe VAT regulations.
The VAT regulations were primarily designed to provide relevant measures for cross-border goods sales to the EU from non-EU countries or regions. These are the four main reforms:
1. The distance selling threshold rule should be repealed. EU merchants are required to register and declare value-added taxes in other EU countries/regions once they have reached certain thresholds. It is, for example, 100,000 Euros in Germany or 35,000 Euros (in France). These distance sales thresholds will be lifted starting July 1. Cross-border sellers must charge the value-added rate of the country of residence for the first sale unless the micro-enterprise threshold has been applied.
2. The EU has set a new threshold for micro-enterprises. A new exemption is available for micro-enterprises, whose turnover in any EU country/region was less than 10,000 euros over the last two years. Merchants who are eligible for tax exemption may continue to charge EU countries/regions in their delivery area the local VAT rate. They can also continue to pay their local tax authorities.
3. One-stop registration and declaration service (One-Stop Shop or OSS)
4. End of the exemption policy for import value-added taxes less than 22 euro.
5. Value-added taxes are collected and paid by the customs declarer or e-commerce platform.
The VAT adjustments to shipments imported into EU are mainly intended for B2C E-commerce imports. Both sellers (enterprises), and buyers (online shoppers) will be affected. The VAT reform could also impact B2B import shipments.
Only goods with a maximum value of 150 euros will be affected by the EU VAT reform. This means that it will impact almost all Shopify sellers selling on the EU market.
What changes were made to export companies to EU countries after the new VAT regulations were implemented? There are two major changes that will impact the threshold for value-added tax and the tax return of non EU companies.
The new threshold for import value-added taxes of 150 euros was added. Customers who import goods less than 22 euro will be exempted from VAT under the current policy. All goods will be subject to import value added tax starting July 1, 2021 up to a maximum 150 euro. Import value-added taxes and customs duties that exceed this threshold may also be applicable. Online merchants have the option to charge VAT at the point-of-sale for low-value goods instead of having to pay import VAT. Online merchants can choose to change to DDU (Delivery unpaid) to pay import VAT. The postal operator/customs agent will pay this VAT on behalf of the customer. Additional agency fees may apply. The OMP/platform that facilitates remote sales for imported goods exceeding 150 euros will be subject to VAT. Shopify does NOT support OMP (online marketplace)/platform.
The Import One-Stop (OSS) registration service and declaration. Merchants that wish to levy VAT on low-value goods may use the recently launched Import One-Stop Service, (IOSS), to submit a monthly VAT Return for all export goods not provided to the EU via the OMP (online marketplace)/platform. IOSS is optional. Non-EU merchants may have to appoint an accountant if they choose to use IOSS.
How to register OSS for Shopify sellers
Shopify allows you to submit a VAT application if you sell in EU countries. This can be used in multiple EU regions without the need for a separate tax registration. Merchants can submit and remit value added tax to any EU country/region in their delivery area using OSS, but only if that country/region isn’t the one where they are located, or if there is no domestic supply in the region where the merchant is physically located. Merchants must continue to file local tax returns for these countries. OSS streamlines the filing process and eliminates the need for merchants to register in multiple countries/regions. Merchants must submit quarterly electronic VAT returns via their domestic OSS portal. They also need to ensure that all qualified OSS sales are kept within 10 years.
FAQ: New EU VAT Regulations
1. How do I register OSS?
Every EU member state offers an online OSS portal through which you can register. You can register once for all sales to EU member states that do not have a physical store.
2. Which EU country should I apply for OSS registration?
EU merchants need to be registered in the country/region where they are located. Non-EU merchants must register in the shipping country. Non-EU merchants have the option to choose which EU country they wish to register if goods are shipped from more than one EU country.
3. How do I use OSS?
You should use OSS if you are serious about using it.
The value-added tax rate in the member country where goods are shipped or the service is taxable will apply
For remote sales of goods and services within the EU, collect value-added tax.
Send the quarterly electronic VAT return via the OSS portal in the member country you registered with OSS
Quarterly, the member country in which you registered with OSS receives the VAT that has been declared in your VAT return
Keep track of all OSS sales receipts
4. Why should I register as an EU merchant for OSS?
Registering for OSS simplifies your application process. You no longer need to register in multiple countries/regions.
5. Is VAT applicable to tax-exclusive or tax-included orders?
The 150 euro threshold does NOT include tax. It only applies to the real value of the goods.
6. Is it worth signing up for IOSS as an EU merchant who sells to the EU?
IOSS allows merchants to declare one declaration if they wish to collect VAT from low-value goods purchased from EU buyers. IOSS will allow importers to be processed faster and may even offer the “green channel”. Without IOSS, goods could be held at the border for inspection and valuation, which can lead to delays in delivery or additional value-added taxes assessments.
7. I’m not sure how recent EU VAT rule changes might affect my business. What should I do?
You can consult a tax advisor if you’re unsure how these changes will impact your business. To be responsible for tax reporting, and payment, you may need to appoint someone, such as an accountant or lawyer.
8. What can I do to register for VAT and submit VAT?
These service providers can help you register and file a VAT return.
Hellotax
Simply VAT
Taxually
Avalara
The formation of your company
I-OSS will allow goods to be transported to EU countries using the fastest and most efficient method. Packages without an IOSS number can be sent from T1 country to destination country, which is efficient and cost-effective. Shopify sellers looking for a professional dropshipping agent that can help dropship from China to the EU, North America and South East Asia countries cost-effectively, please inquire ShipAnt.