Accounting and finance PRO Business MS

Pro Business MS

Accounting and finance

RETAIL AND WHOLESALE

Challenge

Our client had previously focussed on making B2C sales in Macedonia only, through their bricks and mortar shop and their own website. They wanted to break into the EU market, to achieve this they signed up with a major marketplace platform to assist them.  The intention was to make deliveries to EU customers from Macedonia stockpile and also utilise the marketplace’s collection of warehouses on the continent (holding its stock before delivery, to speed up the time-to-customer).

Support

As our client sold food products, our first role was a review confirming their commodity code and to determine it they had ‘Macedonia origin’. The importance of this is to determine whether duties are be payable when the product arrived in the EU, and if they were due, could they be avoided because Macedonia is not part of Schengen zone. We also reviewed the VAT treatment in the EU member states they intended to target first (as while in Macedonia many food products are 5%, that is not the case in other countries). Having concluded that duties would apply, our client was able to accurately cost their sales and then calculate a customer price accordingly. We assisted in mapping where those import VAT and duty costs would hit as for some sales, e.g. packages under €150 it could be avoided by use of an Import One Stop Shop (IOSS) registration. We also informed the client of the VAT registration requirements and reporting obligations related to the use of EU warehouses and the fact that when selling via marketplaces it will sometimes they need to account for the VAT due and not the seller.