Banggood EU VAT/IOSS scam - Page 1
Forum section: electronics / general

author: OH2LIY
author_rank: Contributor
timestamp: March 31, 2022, 05:31:37 pm
content: Hi, probably not right group but friendly warning to all EU buyer who believe banggood to be EU VAT compatible. Every item under price have refer"Prices include VAT and duties(if applicable)".Also there is:https://www.banggood.com/index.php?com=help&t=questionCategory&artid=1901&catid=187After opening complaiment in Paypal, I managed to get them admit "We do not have the IOSS number you mentioned"...Let see, what happens next, do they willingly compensate collected VAT and local post extra handling fee (not having IOSS number)Ramppa

author: janoc
author_rank: Super Contributor
timestamp: March 31, 2022, 06:16:29 pm
content: That statement from Banggood support seems wrong. Likely they don't know what the IOSS number is - you are talking to some low level support grunt there, not an EU tax expert and they just gave you a the simplest way out (for them). I have been ordering stuff from Banggood and there haven't been issues with this in France nor in Germany.You can get even an invoice (go to your order, in the upper right there is a link to print the invoice) with their VAT registration number: 685499489It is a Czech VAT number, you can check it here:https://ec.europa.eu/taxation_customs/vies/vatResponse.html- select Czech republic and enter the number. Guangzhou Taishengyu Trading Co is Banggood.Strictly speaking, this is not a proof they are registered in IOSS but it would be quite silly if they weren't and yet were registered in Czech republic for remitting the VAT that their customers would be all charged second time when the goods have arrived to them.So if your post/tax authorities charged you VAT on delivery, that's either because the package hasn't been labeled properly - or the authorities on your side don't recognize the labeling properly (sadly still the case in a few EU countries). Then you could get charged the VAT twice.Also, you didn't say how much was your order. Be aware that the one stop shop (IOSS) facility is only for orders below 150€. If the value of your order is higher, it will be taxedon importregardless of whether the seller is registered with IOSS and collecting the tax already. In such case you shouldn't have been charged VAT by the seller.

author: _Wim_
author_rank: Super Contributor
timestamp: April 01, 2022, 03:48:54 pm
content: It could also be related to the local postal office or the way banggood expects the IOSS number to be communicated to the postal system.I have had similar issues with Ebay and Bpost. Although there is an IOSS number provided by Ebay (and VAT automatically collected), Ebay expects the seller to register the IOSS number digitally with Bpost. Most (all) sellers don't do this, so I get charged VAT twice. Providing the IOSS number to Bpost afterwards is not accepted, they only want this registered digitally before the package arrives.I can reclaim the double VAT from Ebay (after filing a complaint), but Bpost charges 20€ additional administrative fees (a nice profit for them). Many buyers probably do not reclaim the double VAT from Ebay, so Ebay is also making additional profit on this system. I tried to resolve this issue with both parties, but they both proved to be very unwillingly. Very frustrating, as I have had this situation with already five relative cheap packages, making the hassle and administrative fees extra frustrating.

author: janoc
author_rank: Super Contributor
timestamp: April 01, 2022, 04:07:17 pm
content: Quote from: _Wim_ on April 01, 2022, 03:48:54 pmThat sounds weird because this is clearly eBay's responsibility, not the individual seller's. It is clearly indicated on the page describing IOSS:Quote(https://ec.europa.eu/taxation_customs/ioss_en)If the goods are being sold through eBay and shipped via eBay's service, there is nothing to register anywhere - VAT and proper labeling of the package is eBay's responsibility. If the seller sells through eBay, eBay collects the VAT but the seller ships it on their own, then it could be interesting but I expect eBay then either shouldn't charge VAT (and it becomes seller's responsibility or the recipient will have to pay the VAT on delivery) or needs to communicate the IOSS number to the seller in order to properly label the package. Of course, if the seller does not label the package because they have no clue what the VAT number is for, then you get charged the tax twice.There is no "registration with Bpost" because Bpost gets the number on the package when clearing it through customs and verifies it through the central IOSS system. That's the whole point of it - that it is a one-stop solution, otherwise everyone selling to EU would need to register with 27 different customs and tax authorities and remit VAT in 27 different ways (taxes such as VAT are the jurisdiction of the individual states, there is no "EU VAT").This sounds more like an excuse and passing the blame between Bpost and eBay than anything else.

author: wraper
author_rank: Unknown
timestamp: April 01, 2022, 04:45:55 pm
content: Quote from: janoc on April 01, 2022, 04:07:17 pmNot weird at all. Ebay collects the tax, however it's the seller who ships the item. Unless ebay provides a shipping label, I don't see how ebay can affect anything other than informing sellers.QuoteIt's not how it works.

author: thm_w
author_rank: Super Contributor
timestamp: April 01, 2022, 10:04:18 pm
content: Quote from: wraper on April 01, 2022, 04:45:55 pmThey could include it as part of the buyers address or alert you to print a packing slip to tape to the box.It would not be impossible for them to implement.Of course this is ebay we are talking about, so they will do the bare minimum.

author: _Wim_
author_rank: Super Contributor
timestamp: April 02, 2022, 05:36:09 am
content: Quote from: wraper on April 01, 2022, 04:45:55 pmThis is the reply I got from Bpost to forward to Ebay:Dear ,In exceptional cases, you may have to pay VAT and import charges on your shipment a second time. This is because the IOSS shop on which you ordered or the local postal service of the sender has not (correctly) recorded this information.An IOSS shop is required to forward its IOSS number digitally. Customs will use this number to automatically read out the necessary information about your shipment. If this number is not transmitted or is not valid, the bpost customs clearance service will be obliged to charge the recipient for VAT and customs formalities. (It is not sufficient to note the IOSS number on the packaging or to communicate it afterwards).If you are charged a 2nd time for the import costs and VAT, then:Can you refuse the shipment in the My bpost app or Track & Trace and ask for a full refund from the sender.Can you pay the import costs and reclaim the VAT from the sender who wrongfully charged them? Contact the sender and show him the proof of payment from the My bpost app or Track & Trace.ebay may always contact us.Translated withwww.DeepL.com/Translator(free version)Best regards,XXXXXCC AdvisorI am also not sure this is correct, but that is what they send me. Reply from Ebay, see below.

author: _Wim_
author_rank: Super Contributor
timestamp: April 02, 2022, 05:37:51 am
content: Quote from: janoc on April 01, 2022, 04:07:17 pmReply from Ebay:Thank you for contacting eBay Customer Support regarding your concern about the VAT charges. My name is xxxxxxx and I am glad to assist you today.I understand that you have been asked to pay VAT twice for the item #xxxxxxxxxxx (order ID: xx-xxxxxx-xxxxxxx).Wim, I would like to inform you that when the seller ships the item, the seller needs to mention the IOSS ID on the parcel so that when the item arrives in your country, the authorities can verify that VAT has already been paid and they won't charge you with the VAT.In highly unlikely circumstances if the seller has not mention the IOSS ID on the package and you are being asked to pay VAT upon delivery of the item, I would suggest you to kindly pay the VAT and then share the receipt of the VAT paid to the shipping company with us. Once you share the receipt of the double VAT paid, we will look into the refund of the VAT charged on our system.However, in any scenario, you have to wait for the item to be delivered to you. Once the item is delivered you can contact us back and we will surely assist you accordingly.I believe the above information was useful to you in resolving your concern. Thank you for choosing eBay!And so the emails went on and on, but none of the parties was very helpful.

author: _Wim_
author_rank: Super Contributor
timestamp: April 02, 2022, 05:50:14 am
content: Ebay does rapidly return the double payed VAT once you send prove. They however did not want to answer my question who gets to keep the double payed VAT when the buyer does not reclaim this...Bpost kept insisting that the seller needs to register the IOSS number digitally "somewhere" (which the Ebay sellers did not know where), and kept charging 20€ custom formalities.So to me it sounds very similar to what the OP is experiencing, on my side I was however not able to resolve this. I tend to avoid now purchasing low cost international items on Ebay, unless it is with Ebay Global Shipping (then no 20€ custom formalities have to be payed).

author: _Wim_
author_rank: Super Contributor
timestamp: April 02, 2022, 05:54:22 am
content: Forgot to mention, with Ali-express it does work perfectly, so Bpost must be receiving something digitally regarding IOSS. I have not used Bangood lately, and reading the OP post, I might stick for the moment to Ali-Express...

author: 123rolle
author_rank: Contributor
timestamp: April 02, 2022, 07:12:24 am
content: I guess all those platforms can have the same problems. Just yesterday I had to deal with the same IOSS issue with aliexpress. Most of the time it works without having to deal with it but not always.

author: wraper
author_rank: Unknown
timestamp: April 02, 2022, 07:30:03 am
content: AFAIK if you select "Aliexpress shipping", everything will be fine, with other options YMMV depending on seller. Half a year ago I ordered some stuff on ebay from a small Russian seller. Being concerned abouton double paying the VAT, checked Russian post website and it said you must register IOSS number on their website or in the post office. Asked the seller to do everything properly with a link to the post website. Seems it's provided through ITMATThttps://www.parcelforce.com/sites/default/files/Electronic_pre-advice_FAQs_customer_May19.pdf.

author: janoc
author_rank: Super Contributor
timestamp: April 02, 2022, 03:02:11 pm
content: Quote from: _Wim_ on April 02, 2022, 05:54:22 amThe forwarding means thateBay(who is the IOSS registered entity here,not the seller!) needs to enter the information about the VAT collected into the IOSS system and then remit the tax at the end of the month through their EU-based subsidiary.The number then needs to be apposed on the package too and the customs will use this to check in the database whether the VAT has really been paid or not (otherwise anyone could just stick a random number on the package and not pay the tax).Specifically,there is no communicationbetween Bpost and eBay (or AliExpress or whoever) or Bpost and the seller necessary. They most likely couldn't even do it if they wanted to because eBay can't know ahead of time who will be the agent/courier doing the customs and processing the package in the destination country!There is more detail here:https://vatcompliance.co/ioss-formalities-h7-declaration-filling/What must be done digitally is the filing of the customs paperwork with the EU authorities (not bPost!) - the H7 dataset (which contains the IOSS/VAT number, among other things). But that is the responsibility of either eBay or whichever shipping company the seller has used to send the package. If the shipping company used doesn't do this or doesn't have the means to do it (they need access to the EU systems) then you could have issues.Quote from: wraper on April 01, 2022, 04:45:55 pmThat isliterallyhow the system works.Here it is explained in more detail:https://www.ship24.com/ioss/ioss-numberSpecifically:QuoteAgain, there isno digital (or other) communication requiredto the post office in the destination country. eBay's (or the seller's) responsibility is to communicate the number and things like mass, what is in the package, price, etc. to the shipping company or carrier which will digitally file it as the H7 declaration with the customs - and that's all. It is essentially the same thing that is on the usual CN22 "green paper" declaration) but normally the seller shouldn't need (or even can't) to file this themselves, it is usually the transporter submitting it on their behalf.

author: wraper
author_rank: Unknown
timestamp: April 02, 2022, 03:39:30 pm
content: Quote from: janoc on April 02, 2022, 03:02:11 pmReally? How about what's in red? Please point where it says "put the number into an address and you'll be fine"? For example DHL:https://www.dhl-eucustoms.com/assets/img/en-guides/where_to_indicate_ioss_mydhl.pdfQuoteAnd here is the catch: eBay's(or the seller's) responsibility. If seller ships themselves (AFAIK in the vast majority of countries you cannot buy a shipping label through ebay), there is no way ebay can do anything about that. And many sellers are totally clueless about this.

author: janoc
author_rank: Super Contributor
timestamp: April 02, 2022, 03:48:06 pm
content: Quote from: wraper on April 02, 2022, 03:39:30 pmSee above - I have been updating my comment while you wrote this, so we have stepped on each other.They need the IOSS number so that they can file the H7 customs declaration on your behalf - the same like when you were sending stuff by post and had to fill the green CN22 customs form that got attached to your package. The H7 declaration is +/- same thing, only digital.With places like Banggood or eBay that handle the shipping as well, they are responsible for handling this. If you ship yourself, you indicate the IOSS number from eBay to the shipping company on the waybill (or whatever they use). Strictly speaking, they could as well copy it from the label on the package, it doesn't really change anything on what I wrote above.The point is -you do not communicate with the post office in the destination country. Only with your transporter/courier, who communicates the customs formalities to the EU. And the eventual post office (or whoever is doing the customs clearance) gets the information from there.

author: wraper
author_rank: Unknown
timestamp: April 02, 2022, 04:07:43 pm
content: Quote from: janoc on April 02, 2022, 03:48:06 pmThat's right. Shipper does not deal with Bpost directly. When I claimed anything like that? They deal with the shipping company on their end, which then provides the data to Bpost or other EU post electronically through ITMATT.https://www.ipc.be/services/e-commerce-solutions/dqmQuoteQuote

author: janoc
author_rank: Super Contributor
timestamp: April 03, 2022, 10:17:59 am
content: Quote from: wraper on April 02, 2022, 04:07:43 pmSorry, that was meant for _Wim_ who has received some e-mails from bPost suggesting that eBay (in their case) didn't communicate something to the post.

author: _Wim_
author_rank: Super Contributor
timestamp: April 03, 2022, 10:39:31 am
content: Thanks for all the useful information here.Quote from: janoc on April 03, 2022, 10:17:59 amYes, I see now I expressed myself not so clear. I was aware the digital registration was not @bpost, but did not know where (hence I wrote "somewhere").I do however still think it should be possible for Ebay to execute the registration when the seller adds the tracking information after the item has shipped (and they could maybe request the additional information they miss, like item category).Expecting the seller to do all of this, is not realistic in my opinion (for the non-professional sellers at least).I used to be the case that items below 22€ where free from import duties and paperwork, now they cost 20€ administrative fees + 2xVAT from which you can recover 1xVAT with some more hassle. This system still has some room for improvement in my opinion.

author: wraper
author_rank: Unknown
timestamp: April 03, 2022, 10:45:40 am
content: Quote from: _Wim_ on April 03, 2022, 10:39:31 amI don't see this happening. That data comes from the customs declaration from a seller. I don't see how a 3rd party can legally change the data that seller provided (and who is legally responsible for correct customs data).

author: _Wim_
author_rank: Super Contributor
timestamp: April 03, 2022, 10:48:13 am
content: Quote from: wraper on April 03, 2022, 10:45:40 amGood point. I though because Ebay has already most of the info, but indeed legal responsibility could be a big issue.

author: janoc
author_rank: Super Contributor
timestamp: April 04, 2022, 03:02:16 pm
content: Quote from: _Wim_ on April 03, 2022, 10:48:13 amIt isn't even that. eBay literallycan'telectronically submit this information if they are not handling the shipping. They can't know what else in addition to whatever has been sold on eBay will the seller add to the package so they would have no idea what to put on the customs declaration.Filing the customs paperwork is the job of whichever transporter the seller is using based on the information from the seller. All the seller needs to do is to put the VAT/IOSS number on the package and/or fill it in the necessary form like the one you have found for DHL (I believe it was DHL) when shipping the package if the transporter is unable/not willing to copy the information from the package itself (where the customs documentation has to go into that plastic pocket and/or the green customs sticker).Also the seller can't file this information electronically themselves unless they are themselves registered in the IOSS system and have the required software for filing these things.

author: wraper
author_rank: Unknown
timestamp: April 04, 2022, 03:52:40 pm
content: Quote from: janoc on April 04, 2022, 03:02:16 pmPaying VAT through IOSS and shipping a package with IOSS number are two entirely different and disconnected things. In practice you could avoid paying any taxes and fraudulently use IOSS number of some company, and it will happily go thru customs. Since customs have no way to connect a particular package and a fact if VAT was (will be) actually paid. Especially considering that IOSS VAT return is submitted monthly (until the end of next month) and doesn't contain any addresses or tracking numbers. The company basically can't do anything to figure out who uses their IOSS number and for what either.

author: janoc
author_rank: Super Contributor
timestamp: April 08, 2022, 07:16:24 am
content: Quote from: wraper on April 04, 2022, 03:52:40 pmThe problem is that your little Joe Scammer can't do that because it is not sufficient to just stick some number on some package. The package needs to have that H7 electronic declaration filled and "mere mortals" can't do that because they lack access/registration to the system. Without that the package will not clear the customs - exactly as experienced by OP above.Of course, they could falsely declare some valid number to the transporter - but that's no different than filing any other false customs declaration, a crime. If the package gets individually inspected, the sender could be required to provide a proof of paying the VAT (e.g. a VAT return or invoice showing it has been paid).No system is foolproof but it was not meant to be.Also, the question is what motivation the sender would have to do this - business sender outside of EU wouldn't risk legal problems when it is not really their concern that the recipient will have to pay VAT on delivery (the same as customs, import duties, etc. - that has always been recipient's problem). Businesses registered in the system already have no reason to put a false number there. And private persons aren't really concerned - except in cases like eBay but there the VAT has been paid, even twice if the sender doesn't label the package properly ...

author: wraper
author_rank: Unknown
timestamp: April 08, 2022, 11:38:59 am
content: Quote from: janoc on April 08, 2022, 07:16:24 amWhat registration to the system? How the process is any different than it would be with a legitimate sale with VAT paid? Both VAT fraudster and legitimate seller need to do exactly the same thing. Ebay has nothing to do with filling the declaration through internet or doing the same at post office.QuoteUsually nobody asks an ID when shipping, so good luck enforcing any punishment.QuoteIf it happens, it will be on receiver's side. Sender does not need to provide anything, not to say a legitimate seller does not get a VAT invoice from ebay to begin with. As with IOSS ebay technically acts as reseller and sender has nothing to do with paying VAT.QuoteGetting it through customs hassle and tax free. For Chinese sellers filing a false customs declaration with reduced value was a default option for as long as ecommerce exists. As buyer you need to ask to get it declared with real value.QuoteIt's seller's problem too. Buyers are never happy to pay the taxes they do not expect (and often they don't).QuoteWhy wouldn't they? Do you think it's unimaginable that a private person wants to get something through customs tax free?

author: janoc
author_rank: Super Contributor
timestamp: April 08, 2022, 03:33:19 pm
content: Quote from: wraper on April 08, 2022, 11:38:59 amRegistration so that you get access to file the H7 stuff. This is done digitally and you must have approved software and access credentials. Usually the posts and transport companies have this. If this isn't filed then you can slap whatever number on your package and it won't clear the customs without someone having to pay the VAT.Quote from: wraper on April 08, 2022, 11:38:59 amWell, sure, you can put a false sender address on the paperwork.Quote from: wraper on April 08, 2022, 11:38:59 amSo you, as an individual seller,who has no financial interest in this, would voluntarily file false declaration and commit tax fraud?Chinese e-commerce falsely declaring things as "gifts" (which, btw, has zero effect) or under-declaring the value of the goods is common - as is having the package held up by customs afterwards and having the recipient pay the missing fees or even the package confiscated if it is something that has obviously higher value than what has been declared. So for a serious business selling something worth more than a plastic iPhone cover this would be pretty much counterproductive.And all the major Asian e-commerce platforms like AliExpress, Banggood, DealXtreme, Gearbest, etc. are now collecting and remitting VAT, so this is much less of a concern.Quote from: wraper on April 08, 2022, 11:38:59 amOf course it is. But I don't see how this VAT change has really changed anything. If you are importing stuff privately, you had to get it through customs before as well. If the paperwork wasn't in order, it was held up until someone came to the office and got the papers/fees sorted out. Or companies like UPS charged you the customs handling/filing fees on delivery.And all the major marketplace platforms are handling this for their sellers now (as they should). The only thing that has really changed for me, as someone ordering things from Asia, is that I have to pay the VAT in the price, so my gadgets are slightly more expensive than before.Quote from: wraper on April 08, 2022, 11:38:59 amAh of course, who wouldn't. But that's an argument like who wouldn't want a new TV from the store for free? Would you go steal it? Maybe you get away with it because the guard is sleepy and not paying attention.If someone wants to cheat they would no matter what you do. However, I can't imagine the motivation of non-EU sellers to circumvent the system and expose themselves to all sorts of problems, chargebacks and refund demands when the packages start to get blocked at the border - even though some will no doubt slip through due to the sheer volume and the customs focusing on the more valuable items, not collecting a few cents worth of VAT on a package of dupont wires from AliExpress. It is just not worth it. A lot of foreign sellers have actually stopped shipping to the EU altogether because of this change - losing some customers is better than dealing with constant refunds or customs problems, even more so if you tried to cheat your way through.And I really don't see private sellers selling through e.g. eBay caring about it - and potentially exposing themselves to a legal liability only because some poor schmuck in the EU wants to save a few bucks on tax or customs. By now everyone in the EU who is ordering things from abroad should be aware of custom and tax fees.

author: wraper
author_rank: Unknown
timestamp: April 08, 2022, 03:52:58 pm
content: Quote from: janoc on April 08, 2022, 03:33:19 pmIf this makes your customer happy and there is no chance to receive any punishment there is nothing to lose. Not to say Chinese certainly don't have any respect towards foreign laws. WFIW by doing so exporter country does not lose any income. Also thereisa financial interest because when customer gets taxed "unexpectedly", they often leave a negative feedback or open a dispute.QuoteMost of the Chinese would.QuoteThere was a VAT free limit but not since of July last year.