Rest of the World Retailers: Marketplace Tax

What is Marketplace Tax Responsibility?

In some countries there has been a change to the taxation law which means that the retailer is no longer responsible for the remittance of sales tax / VAT to that country where the sale is made on a marketplace and is an import into that country.

The marketplace instead charges sales tax/VAT on the order and remits it under their tax registration for that country, and thus handles the tax responsibility for the retailer. It allows retailers to trade to these countries more easily.

The retailer will no longer collect and remit sales tax for these countries for their import sales on Fruugo, however the retailer remains responsible for the remittance of sales tax/VAT for any sale they make on their own site or via other methods that are not a marketplace.

Where is it applicable for the Rest of the World Retailers (Non-UK or EU)?

In the countries which Fruugo is available, there are currently five countries/areas which operate Marketplace Tax Responsibility. These are:

United Kingdom
Australia
New Zealand
Norway
European Union
United States of America
Singapore

In all the above countries and areas, marketplace tax only applies to import sales from retailers not domiciled in that country. If you are domiciled in one of those countries marketplace tax does not allow and you will remain responsible for the remittance of sales tax/VAT if it is a country for which Fruugo permits domestic sale.

Does it apply to all orders?

In Australia, New Zealand & Norway, Fruugo will apply sales tax applicable to the classification of the product in these countries irrespective of the order value.
In the United Kingdom and the European Union, the marketplace (Fruugo) is only responsible for orders up to £135 / €150. For any order above £135 / €150 normal border rules apply where either the retailer pays tax & duties or the customer will pay these at the border.
In Norway, the marketplace (Fruugo) is only responsible for orders up to 3000 NOK. For any order above 3000 NOK normal border rules apply where either the retailer pays tax & duties or the customer will pay these at the border.
In Singapore, the marketplace (Fruugo) is only responsible for orders up to $400. For any order above $400 normal border rules apply where either the retailer pays tax & duties or the customer will pay these at the border.
In United States of America Fruugo will apply the sales tax applicable to the classification of the product in that specific state. Not applicable in all states.

Do I need to change my pricing?

You will not need to make changes to your product pricing for these countries.
Fruugo will apply the relevant sales tax rate on top of the product prices you provide where marketplace tax is applicable.
The combined product price will be the price that displays on the product once converted by Fruugo to the local currency of the site.
You will receive and see the same order totals to match the prices you provide. These will be excluding marketplace tax.

What do I need to do?

As a seller you will still need to provide the documentation required for international shipments.
You will need to document that Fruugo has collected the sales tax on your customs declaration and consignment with their courier, including Fruugo’s relevant tax IDs (where applicable).
Ideally you should include the Fruugo invoice/packing slip in the parcel and stick it on the outside of the parcel where possible.

These consignments should be fast-tracked through customs with the correct documentation and you have indicated VAT has been pre-paid with Fruugo’s tax IDs.

If the Fruguo Tax ID is not present on the package, the recipient will likely need to pay import sales tax to receive the order, even though Fruugo has collected tax at the time of purchase. If the customer requests a tax refund from Fruugo or refuses delivery because the package wasn’t correctly labelled, we will issue the customer a refund and pass the cost onto the retailer.

What are Fruugo Tax IDs?

The relevant Fruugo Tax ID is available on each order both via the Retailer Portal and on our order API to provide you with the valid ID where applicable. If you want to add the Fruugo Tax IDs into your fulfillment system as rules, the IDs are:

United Kingdom VAT: GB413900429
Norway VOEC: 2033097
Australia ARN: 300015541142
New Zealand IRD: 130776718
Singapore GST: M90375175R
European Union IOSS: IM3720001952

European IOSS issued by Irish Revenue (Tax & Customs).

Can we fulfil from multiple locations?

All your Fruugo orders should be fulfilled from the registered country of your Fruugo account / the country you are domiciled in.
Orders should not be fulfilled from multiple countries without explicitly consent from Fruugo to fulfil for these additional locations.
Any approved additional fulfillment location would need to be from the same economic regon as your registered country.
For any approved additional fulfillment location you would need to ensure you are compliant with the tax laws within that country for cross-border fulfillment of orders.

Which European countries are in the European Union?

In the countries which Fruugo is available, the following are within the EU (European Union):

Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Poland, Portugal, Romania, Slovakia, Spain and Sweden

Key Point Summary

Fruugo will apply sales tax on your prices in these four countries.
You will receive the same amount for the order and only see your order totals on the order view.
You will not collect and remit sales tax on these sales to the local government.
Fruugo will remit the sales tax to the relevant government for these sales.
You should include Fruugo's tax ID on your shipment and customs declarations
Ideally you should include the Fruugo invoice/packing slip in the parcel and stick it on the outside of the parcel where possible.