EU-friendly pick, pack and ship fulfilment services

Shipped with Care

Publisher Resources

By

EU product safety law is changing

EU product safety CE mark

A new EU product safety law comes into force in July 2021. It applies to all EU fulfilment services and existing products so, despite its future date, is relevant right now to EU-friendly games publishers.

The short read

If your product line is entirely typical printed books, such as RPG rulebooks, this law does not apply and needs no further action.

From July 2021, all regulated products (CE-marked toys, for example) supplied in the EU must have an EU-based economic operator who is responsible for certain safety-related tasks. If you do not have another EU-based point of supply, Kixto is willing to take on this role with respect to the products we handle for you. We will make no charge for work that amounts to simple records-keeping.

What you need to do

For each game that’s not a printed book, you will need to send us a copy of your product safety assessment and, where applicable, your declaration of conformity and technical file for the product.

Kixto’s role

Kixto must verify the EU declaration of conformity, make the relevant safety documentation available to market authorities on request and, if there is a safety concern with the product, notify and assist EU market authorities as necessary.

Take care of CE-marking

Please be cautious of factories who offer to CE-mark your products for you. CE-marking is more than adding a logo and, if you develop a toy and sell it under your name, you are the manufacturer and solely responsible for the technical documents, conformity and safety assessments, declarations, labelling, etc. The process cannot be done without you.

The long read

Since 1988 the EU has regulated the safety of toys. The current legislation, the 2009 Toy Safety Directive, applies to products designed or intended, whether or not exclusively, for use in play by children under 14 years of age. Toys for this age range must carry a CE-mark to indicate that the manufacturer has checked compliance with the relevant essential requirements.

New law is about market surveillance

This new market surveillance regulation applies to specified product types and characteristics. Particularly relevant to Kixto clients, it applies to toys that are subject to the Toy Safety Directive.

Regulated products must have an EU-based economic operator

From July 2021, a toy subject to the Toy Safety Directive can be supplied in the EU only if there is an economic operator established in the Union who is responsible for certain safety-related tasks – summarised below. This role goes to the EU-based fulfilment service provider if that is how the product is shipped and there is no other EU-based manufacturer, importer or authorised representative.

The safety-related tasks include:

  • check and keep copies of the declaration of conformity and declaration of performance available for inspection by the authorities,
  • provide information to market authorities when required,
  • inform market authorities of suspected risks presented by a product,
  • cooperate with corrective action to address non-compliance or suspected risks.

References

The law’s full text is available here: Regulation (EU) 2019/1020 on market surveillance and compliance of products and amending Directive 2004/42/EC and Regulations (EC) No 765/2008 and (EU) No 305/2011

These are the products / directives referenced in regulation 2019/1020:

  • construction products
  • personal protective equipment
  • appliances burning gaseous fuels
  • noise emission in the environment by equipment for use outdoors
  • machinery
  • toys
  • ecodesign requirements for energy-related
  • use of certain hazardous substances in electrical and electronic equipment
  • pyrotechnic articles
  • recreational craft and personal watercraft
  • simple pressure vessels
  • electromagnetic compatibility
  • non-automatic weighing instruments
  • measuring instruments
  • equipment and protective systems intended for use in potentially explosive atmospheres
  • electrical equipment designed for use within certain voltage limits
  • radio equipment

By

Documentation for freight shipments from Kixto

Shipments to within the EU

When you ship from Kixto to an address inside the EU customs union, you are responsible for accounting for the transaction correctly but there are no customs borders to navigate and no customs documentation is required to go with the shipment.

Shipments to outside the EU

Shipments from Kixto to addresses outside the EU customs union must be accompanied by accurate customs documentation; errors or corrections can cause delays, additional fees for you to pay, or even make a shipment undeliverable.

Kixto is a fulfilment service and our role limited to packing and shipping according to your instructions. You are responsible for providing us with the information required for the shipment, such as a customs invoice.

The information here is general in nature and does not consider the specific terms of your shipment or its destination. If you need additional advice, please consult an accountant or the receiver’s customs broker.

Freight shipment checklist

Check all of the following, further detail below.

  • A customs broker is ready to clear the import through customs.
  • Invoice shows your details as exporter.
  • Invoice shows your EORI number.
  • Invoice shows the importer of record and any required ID numbers.
  • Invoice shows terms of trade are DAP.
  • Invoice includes date, your reference and shipping method.
  • Invoice details description, commodity code, origin, quantity, unit value and total value of each product being shipped.
  • Invoice shows insured value.
  • Invoice shows subtotal of goods.
  • Invoice shows cost of shipping and insurance.
  • Invoice has grand total.
  • Documentation forwarded to Kixto.

Further detail

1. Import customs broker

For shipments by sea, the importer of record must employ a customs broker to process their import through customs. Before shipment, check with the broker that they can process the import under “DAP” terms of trade and for any additional information required on the customs documentation.

For shipments by air through services such as DHL, UPS and Fedex, the carrier’s brokerage service will be able to handle the import simply and for a fixed fee (normally around $20) but don’t expect bespoke advice.

2. Your details as exporter, e.g:

Sender
Your business name*
Care of Kixto Ltd
Westward Business Centre
Mill Street
Crediton
EX17 1HB
UK

3. Your EU Economic Operator Registration and Identification (EORI) number

For example, below your address:

Sender’s EORI
GB123456789000*

Your EORI number is normally issued with your VAT registration and is normally your VAT number with three zeros added to the end. You can check your EORI here or, if necessary, get an EORI number online.

4. The importer of record

This is the person / business who is legally responsible for importing the goods into the destination country and paying the import taxes, duties and customs fees. Include their address and contact details. To some destinations, the importer’s tax or operator ID may be required — check with the importer or their broker.

Importer of record
Importer's business name*
Importer's address* 
Importer's contact details* 
Importer's business / tax ID, where applicable*

5. Terms of trade

These identify who is responsible for each stage of the shipment process. If using a shipping service arranged by Kixto, we only send using Delivered at Place (DAP) terms with the receiver responsible for import customs clearance and payment of import taxes and duties.

If you require Delivered Duty Paid (DDP), where the sender is responsible for all charges, you will need to arrange carriage yourself. We can suggest carriers to contact and make the goods available for collection.

Terms of trade: 
DAP, receiver pays import customs, tax and duty charges

6. Invoice details

Include your reference number, the invoice date and the shipping method

Shipment reference: your reference number*
Invoice date: date of document*
Shipment method: Sea or Air*

7. For each product being shipped:

  • The title / description.
  • Its commodity code, searchable here.
  • Country of origin.
  • Quantity sent.
  • Unit value (value per item, either manufacturing cost or what the receiver paid).
  • Total value (quantity x unit value).

8. The insured value.

If you choose to have the shipment insured, the cover will be subject to the carrier’s standard terms. The insured value is the maximum the insurer would compensate you for complete loss, normally the total of the goods value in step 7. For part-loss they would pay out a proportion of the insured value. In the event of a claim the insurer normally requires documented proof of value – either the manufacturer’s invoice or your sales invoice.

Give an insured value of “zero” if no insurance is required.

Value for insurance: zero or desired value*

9. Goods subtotal

A subtotal showing the total value of all goods (i.e. total of  step 7)

10. Shipping

The cost of shipping and, if selected, insurance.

11. Total value for customs

The total shipment value, i.e. the sum of steps 9 and 10.

( * = edit to show your details. )

By

Do I really need to be registered for VAT for you to ship my books? What about VAT MOSS?

If your business is established outside the EU then unequivocally, yes, you must register for VAT to ship your books from within the EU. There is no threshold for registration and the same is true in every EU country.

Are zero-rate books taxable supplies?

Yes.  Printed books are considered taxable supplies even though, on most, the UK rate of VAT is 0%. If all your supplies are zero-rated, you will pay no VAT and it’s all just a paperwork exercise – but accounting for even zero VAT remains a legal requirement.

Can I account for the VAT using VAT MOSS?

No. VAT MOSS is specifically for reporting digital sales, such as PDF ebooks, to EU consumers.

Details of the law

The law is set out in detail in HMRC VAT Notice 700/1. Here are the relevant clauses, abridged and reordered to follow more easily:

9.1 NETP – definition

A non-established taxable person (NETP) is any person who is not normally resident in the UK, does not have a UK establishment and, in the case of a company, is not incorporated in the UK.

 9.3 When an NETP must register for VAT in the UK

If you make any taxable supplies in the UK, you must:

  • register for VAT in the UK
  • account for UK VAT to HMRC

2.3 Taxable supplies

A taxable supply is any supply made in the UK which is not exempt from VAT. Taxable supplies include those which are zero-rated for VAT.

3.1 When you have to register for VAT

If you’re an NETP, the registration threshold for taxable supplies does not apply to you, so you’ll have to register for VAT if you make taxable supplies of any value in the UK.

If you only make supplies of certain digital services to consumers in the UK you may instead be able to register for the VAT Mini One Stop Shop (VAT MOSS).

Filed Under: VAT

By

VAT Introduction

What is VAT?

VAT = Value Added Tax = sales tax.

Shipping direct to an EU customer

If you ship directly from outside the EU, you pay international delivery and your customer inside the EU will also pay any sales tax, duty and brokerage charges. The taxes are charged on total cost, including shipping.

Shipping via Kixto

Sales tax is inescapable but Kixto can make it less painful.

Within limits that don’t affect most publishers, when supplying goods from one EU country to another the sales tax can be dealt with in the country of sending, using that country’s rules. When you ship from Kixto, you can ship using UK rules.

UK rules are good for books

The UK has a special zero-rate of tax for literary works and reference books, which includes RPG rulebooks. Within relatively large limits, your books can be sent from the UK to the EU without sales tax liabilities (the full rules for zero-rating are in VAT Notice 701/10).

On most other products the UK VAT rates is 20%, which is at the lower end of the range of EU sales tax.

Save $50 per order

A typical RPG core rule book shipped from the USA to Europe is likely to rack up delivery-related costs of more than $70 (see below for how we calculated this).

Your total delivery costs on the same shipment from Kixto would be around $20. This includes bulk-shipping inventory to us, sales taxes, packaging, handling, outbound shipping, everything.

The $70 arises as follows:

  1. From our data, the shipping weight of a core rules book is around 3 lbs 10 oz. By USPS Priority Mail International the postage rate is $55.40
  2. The customs value, book plus delivery, is $45 + $55 = $100
  3. Germany is a large market and its VAT rates are typical. Germany’s VAT rate on books is 7% = $7 on this customs value.
  4. Deutsche Post customs handling fee is €6
  5. Total of $55 postage + $7 VAT + €6 handling = approx $70, ignoring your packaging and time costs.

(Rates checked Feburary 2019.)

What is required?

The law requires non-EU businesses to register for VAT before shipping from an EU fulfilment service.

Registering for VAT is a process Kixto can help you with. It typically takes 2 to 4 weeks. Once registered, you must periodically submit a sales tax “return” and pay taxes due.

For most businesses shipping from the UK, the VAT due on EU sales is:

  • zero for qualifying books,
  • 20% for everything else (standard-rated goods),
  • for shipping charges, the tax rate follows the rate of the contents.

Values to use

When you ship inventory to us, it’s normal to use your cost prices on your shipping invoice. When the import clears UK customs, you’ll be charged VAT on that amount.

On each shipment to a customer, the VAT is worked out on what the customer actually paid for the contents plus shipping (the tax rate on shipping follows the rate of the contents).

If you sell standard-rated goods with tax included, take what the customer paid and divide by 1.2 to get the pre-VAT value.

When you file your VAT return, you will:

  • state the total of VAT due on your EU sales, typically 20% of non-book goods and shipping,
  • state the total of VAT you’ve paid on costs, for example the VAT you paid at import,
  • pay the net VAT due (VAT due from your sales minus VAT you’ve paid on your costs).

For example, if your VAT due on sales is £200 but you paid £50 on import, you then pay £200 – £50 = £150 with the VAT return.

Filed Under: VAT