Sales Tax and VAT
Pawprint Press ships globally and complies with the laws of the regions we serve. As a result, we are obligated to collect tax at checkout, with individual rates depending on the destination, in the form of sales tax or value-added tax. This document explains the details about our obligation and our approach to tax collection.
Sales Tax in the U.S.
In the United States, physical presence rules and economic nexus rules apply when deciding whether an online merchant is required to collect Sales Tax from a customer in a certain state. Pawprint Press has its main office in California and also meets the criteria of physical presence or economic nexus in some other states. As a result, customers in these states will have to pay Sales Tax upfront at checkout. The tax rate will be automatically calculated based on the shipping address of the order.
Shipping charges may be subject to sales tax in certain states.
European Union Value-Added Tax
With the new Value-Added Tax (VAT) rules administered in the EU on July 1, 2021, all foreign online merchants were henceforth required to collect VAT upfront. These new rules essentially treat cross-border commerce as domestic commerce within EU taxation practices. Pawprint Press complies with the new rules and therefore needs to collect VAT at checkout. We appreciate your understanding on the legalities of this policy in order for us to serve our customers in the EU.
Customs Clearance and Proof of VAT Payment
Pawprint Press utilizes Import One-Stop Shop (IOSS) to transfer data to EU customs. An IOSS number will be included on the label of each parcel we send to the EU, allowing customs officials to verify VAT payment using this number. Some couriers may also transmit this data electronically to customs to facilitate smoother clearance.
In some cases, parcels may be transferred among different couriers during the international shipping process. In rare cases, a courier may fail to include the IOSS number on the shipping label or transmit the data electronically to customs. If this happens, customs officials may be unable to verify the IOSS and VAT payment status, and may contact the recipient for verification or directly bill the recipient for the tax.
If this occurs, please provide customs officials with your order receipt as proof of upfront tax payment, and contact Pawprint Press as soon as possible.
Customs Duties on Orders with Upfront VAT Payment
According to the new rules, customers will not be subject to any VAT upon delivery if they have paid upfront. Customers with an order subtotal (excluding shipping charges) less than €150 are also not subject to any customs duties.
Please contact us with proof of charge if you’re charged a VAT or customs duty by the courier upon delivery.
Other Customs Charges
We have also discovered that some EU countries may charge additional fees, such as "Service Fee" or "Customs Processing Fee," for orders even when the VAT has been paid in full and the orders are not subject to any customs duties. In some cases, these fees exceed the VAT amount, causing unnecessary costs for our customers.
Pawprint Press strongly believes that these fees violate EU rules on cross-border VAT collection and go against the principle of IOSS. However, local customs have the discretion to impose such fees, and we are unable to mitigate them. We will continue to improve our logistics system to help customers reduce shipping costs for any order.