Curation / Organizing products / Partnerships with European Service Bureaus ?

Hi Shapeways, Shop owners,

I was hoping to discuss the following with some of you! What are your thoughts?

Q1. What is Shapeways going to do in regards curating or organizing products on their marketplace. My wife said she found it difficult to find what she was looking for?

Q2. Shapeways said they were partnering up with other service bureaus or independent printers, when will this happen. As the costs for Vat/ duties really affect our profit margins in the Europe compared to the U.S, Canada.

Ter

How is partnering with another service bureau going to eliminate VAT? You're stuck with VAT in any of the euro market, even if it is within the same country.

Well, in the UK for example, unless you earn more than 82k GBP per year (say in the UK) for example, you and your customers won't be charged Vat.

For example, when I order one of my own 3d prints on shapeways, if I set the destination country to UK, the 3d printing production costs alone (shipping not included) are £8 more expensive than if I set the destination to the U.S or Canada. Below the print cost, (when destination is set to UK) shapeways tells you a pre-vat figure which is £8 cheaper.

(In the UK) When that total reaches the VAT registration threshold (£82,000 for a 12-month period in 2015/16), you need to register by the end of the following month. For example, if your turnover exceeds £82,000 for the 12 months to 31 August 2015, you need to register for VAT by 30 September 2015.

I figure, if there was a shapeways partnering bureau say in the UK, or any other euro countries, you would be able to Order prints at the pre- vat price unless you Are a business who exceeds the thresholds of the relative country.


Perhaps I'm just not getting this correct, please help me understand! I'm not very smart business wise just trying to understand all this online store business stuff!

Shapeways already has (actually has had from the start) a production plant in Eindhoven, The Netherlands. So any partnering with small companies or individuals, whatever that idea was to be about, would not improve the tax situation for you. I do not know the UK tax system, but I suspect it could be possible for you to reclaim the VAT from your local authorities (directly or by adding it to your business expenses) if you are in fact exempt from it ?

Yes, so I would have to register as a business to reclaim the VAT but have to make over 82K GBP from my store before I would be eligible to reclaim it, right?

What about customers who buy from my Shapeways stores, wouldn't they get the Country specific VAT price added on too. They would be turned off the higher price and would not want to reclaim the taxes from local authorities. Shouldn't there be a button to check for customers to say that they are buying a gift, therefore be able to pay the pre-Vat amounts?

I attached two screen grabs to show the comparisons costs when checking out the same product to the U.s and the UK. Obviously with a more expensive 3d printed product, this would be much more of an issue to consumers and shop owners.

Guess you need to ask a lawyer or tax accountant, my uneducated guess is that even if you cannot reclaim the VAT directly, you could deduct it from your reported earnings.

Certainly, if there is a VAT in their country of residence AND shapeways is obliged to collect this VAT due to common market laws. (Else the customer would still have to pay the equivalent as import tax at customs)

How would buying something as a gift make it tax exempt ? If there is such a tax law I assume it must be specific to the UK. As I see it, the only chance to buy without VAT is to do trade as a VAT-registered business (or move to someplace where the concept of VAT is unknown)

As I see it VAT is something local to the buyer, the only question is whether the seller is obliged to collect it at purchase (same country or same common market) or whether customs or tax authorities at the receiving end do.

This is not correct, imo (usual not an accountant, lawyer etc disclaimer). In fact any VAT registered company MUST charge VAT on sales / services to a customer in the VAT-zone, unless that customer is VAT exempt, or registered for VAT in another VAT-zone country.

If you are not VAT registered you will not be able to charge VAT, but importantly you will not be able to reclaim any VAT paid on expenses for your company.

Also, unless things have changed, the threshhold described the point at which you MUST register for VAT - you can elect to register at lower levels of turnover if you wish.

Talk to an accountant...

Thanks mkroeker, AmLachDesigns & MitchellJetten, stonysmith,

I appreciate your help and information! Some great points in there and you have helped me understand in general some of the VAT curiosities I had

Here's some info that I found about Duties and VAT on gifts, that may be of some use.

A gift is defined by customs as any item which:
has been sent from a private individual to another private individual AND
is for the personal use of the individual or his or her family AND
has not been paid for, either directly or indirectly by the receiver AND
is of an occasional nature only; e.g. for a birthday or anniversary

If the value of the gifts in the consignment (not including shipping and insurance costs) does not exceed £40 (€45, or equivalent in local currency) and the customs declaration is correct, duty and VAT will not be paid on the gifts.

If the value of the gifts in the consignment is greater than £40 (€45, or equivalent in local currency), then:
VAT is payable in all cases.
Duty will be payable unless:
the value of the gifts in the consignment (not including shipping and insurance costs) is less than £135 (€150, or equivalent in local currency) or
the duty amount payable is less than £9 (€10, or equivalent in local currency).
A flat duty rate of 2.5% applies if:
the value of the gifts in the consignment is less than £630 (€700, or equivalent in local currency) AND
it is to your benefit.
Otherwise the normal duty rate applies.

In response to mkroeker:
As mentioned above, If the value of the gifts in the consignment (not including shipping and insurance costs) does not exceed £40 (€45, or equivalent in local currency) and the customs declaration is correct, duty and VAT will not be paid on the gifts. So if Shapeways were to enable our customers to ship one of our products from their billing / delivery address to their friends delivery address, wouldn't that mean it being classed as from one of these:

has been sent from a private individual to another private individual AND
is for the personal use of the individual or his or her family AND
has not been paid for, either directly or indirectly by the receiver AND
is of an occasional nature only; e.g. for a birthday or anniversary

So if that type of functionality was enabled for shop owners and a button to check that signifies this as a gift, would this not allow our customers to not have to pay duties and VAT taxes when checking out, (based on where our customers reside, and if our products are under 40GBP and 45 Euro). This would enable us shop owners to make more of a profit margin and attract more customers to buy products on Shapeways. IT would be a win, win for everyone.

What do you think about all this? Does this make sense at all? And how difficult would all this be to implement, if it could be done?

Terry

https://www.gov.uk/goods-sent-from-abroad/gifts clarifies this as "bought and sent between individuals (not companies)" so your customer would have to receive the part (at which point s/he would have to pay VAT&duty) and then mail it on. Also this appears to apply to goods sent from outside the EU only (see "overview" section on the linked page), while any business based in the EU would (have to) include your VAT rate in the prices they show you (as stated previously).

Oh, ok, thanks very much mkroeker for helping me understand clearly now! CLICK!