It happens more often than you might think, both in your purchases as a self-employed person and in your own sales. Shipping costs are charged by your supplier (or you want to charge the cost of shipping to your customer) and you question whether these costs (income) have a place in your accounts?
Shipping costs on your purchases 📦
What about a supplier that charges extra for shipping? Do these extra costs show up in your accounts? If yes, how do you enter them?
Costs of shipping definitely come into your accounts! Here you may use the principle ‘side issue follows main issue’, so the shipping costs (side issue) will be part of the ‘main issue’ you have purchased.
For example, have you purchased some trade goods for €100 excl. VAT, which then includes an additional €10 excl. VAT shipping charge? Then you may simply book in trade goods for €110 excl. VAT. For accounting purposes, there does not need to be a split between what you have purchased (main item) and the shipping costs (side item).
Shipping costs on your sales 💶
As with purchases, you may also use the principle of ‘side issue follows main issue’ here. You have sold something (main thing) and then have to send it to your customer (secondary thing).
It is up to you to decide whether you will state these costs separately on your sales invoices; you can always do so, but it is certainly not compulsory.
However, it makes no difference to your accounts, those shipping costs are still part of your income. You charge extra costs to your customer and consequently they are part of your sales, it makes no difference whether you charge the costs of shipping one-to-one or take a profit margin here.
Shipping costs are also subject to VAT!
There is some confusion here, because if you purchase stamps, for example, you are not paid VAT on them. Stamps are completely exempted from VAT by law.
This could lead you, as an entrepreneur, to assume that you do not have to charge VAT on postage costs (stamps) when you pass them on to your customer, but that is wrong!
You do have to charge VAT on all postage costs, the same vAT rate as for the products you sell.
- If you sell something on which you have to charge 6% VAT, the shipping costs are also subject to 6% VAT.
- If you sell something on which you have to charge 21% VAT, then the cost of shipping is also with 21% VAT.
- Both 6% and 21% VAT, different products in other words? Then there is a tolerance from the government, the cost of shipping may be at the lowest vAT rate.
Two examples for clarification:
One vAT rate
| Wrong | Correct | ||
|---|---|---|---|
| 1 printer (excl. VAT) | €100 | 1 printer (excl. VAT) | €100 |
| VAT 21% | €21 | Shipping cost (excl. VAT) | €10 |
| Shipping costs | €10 | VAT 21% | €23,1 |
| Total | €131 | Total | €133,1 |
Multiple vAT rates
| Wrong | Correct | ||
|---|---|---|---|
| 1 printer (excl. 21% VAT) | €100 | 1 printer (excl. VAT) | €100 |
| 10 loaves of bread (excl. 6% VAT) | €20 | 10 loaves of bread (excl. 6% VAT) | €20 |
| VAT (€21 + €1.2) | €22,2 | Shipping cost (excl. 6% VAT, lowest rate) | €10 |
| Shipping costs | €10 | VAT (€21 + €1.2 + €0.6) | €22,8 |
| Total | €152,2 | Total | €152,8 |
Dexxter makes it easy for you! 💪
Dexxter is the bookkeeping tool for Belgian sole proprietors who want to take control of their own bookkeeping!
Start your free trial today. This way, you can discover all our functionalities, including booking expenses and creating sales invoices, with or without shipping costs!
Do you still have specific questions? That is perfectly normal, many of your colleagues do!
This is precisely why we also built a community in Dexxter. That’s a place in the application where entrepreneurs can ask questions and get answers from other entrepreneurs, sparring together to come up with solutions.
Tip:
Dexxter offers free webinars and online courses so you are always up-to date with your accounting knowledge!
You are not alone as a (starting) self-employed person, let that be clear!
