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Import One-Stop Shop (IOSS) Everything You Need to Know

From the 1st July 2021, the EU will reshape the current model of VAT obligations for B2C ecommerce sellers, including the introduction of the Import One-Stop-Shop (IOSS).
Naturally, there is a lot of speculation about what exactly these changes will be, who they will affect, and what future implications might be? For that reason, today, we’re going to explore the topic in detail today. Read on for our Everything You Need to Know about the Import One-Stop Shop guide.

What is the Import One-Stop Shop (IOSS)?

At the moment, EU VAT rules mean no import VAT is required to be paid for commercial goods up to a value of €22. However, from 1st July 2021, this provision will be changed.  From this date onwards, all goods imported to the EU from a third country or territory will have a VAT requirement irrespective of their value.

Due to these changes, an electronic portal called the Import One-Stop Shop (IOSS) will be available for business to comply with these new VAT obligations.

Benefits of the IOSS?

This change should not viewed negatively. In fact, the IOSS enables the collection, declaration, and payment of VAT for sellers making Intra-EU distance sales of goods to buyers within the EU. This will mean that sellers based in the EU will no longer be at a disadvantage against non-EU sellers. Non-EU sellers will be required to have at least one VAT registration in an EU member state.

This streamlines the process for buyers charging them only once – at time of purchase. No more hidden or surprise fees upon delivery of items or services. If sellers are not registered with the Import One-Stop Shop (IOSS), the buyer must pay VAT in addition to customs charges from the transporter.

How does the IOSS work?

IOSS registered sellers need to apply VAT when selling their goods or services to a buyer in an EU member state. The applicable VAT rate is the one in which the goods are to be delivered. For further information on VAT rates in the EU, visit the European Commission website.

Registering for the IOSS

Registration for the IOSS can be done through the IOSS portal for any member state since the 1st April 2021.

However, in cases where your company is not EU based it will be necessary to appoint an EU-established intermediary. An intermediary is any taxable person based within the European Union. After receiving an IOSS VAT identification, this intermediary can be used to fulfill your VAT obligations under the IOSS. This includes the declaration and payment of VAT on the distance sales of imported goods.

Consequently, an IOSS registration is valid for all distance sales of imported goods made to EU-based buyers.

What do you need to do if using the IOSS?

Planning to use the IOSS? If so, there are a number of requirements your company should be aware of in order to correctly use the portal. These are as follows:

  • You must display the amount of VAT to be paid by the buyer in the EU. At the latest, this can be done when the ordering process is finalised.
  • You must ensure the collection of VAT from the buyer on the supply of all eligible goods that have an EU Member State as their final destination.
  • All eligible goods to be shipped must not exceed in value more than €150.
  • As far as possible, you must display the price in EURO paid by the buyer on the invoice.
  • An electronic monthly VAT return via the IOSS portal of the Member State where you are registered for IOSS must be submitted.
  • A monthly payment of the VAT declared in the VAT return to the Member State where you are registered for IOSS.
  • All eligible IOSS sales must be recorded and kept for ten years.
  • Your company must provide information required for customs clearance in the EU. This includes the IOSS VAT identification number to the person declaring the goods at the EU border.

Important Exceptions – IOSS

In certain circumstances, VAT does not need to be charged on the distance sales of imported goods:

  • Selling several items to the same buyer and these goods are shipped in a package valued at more than €150. In this case, these goods will be taxed at importation in the EU member state.
  • Where distance sales of goods are facilitated by an electronic interface (e.g. marketplace, platform), the interface is responsible for the VAT required.

EU Member States – VAT Registration

  • Austria
  • Belgium
  • Bulgaria
  • Croatia
  • Cyprus
  • Czechia
  • Denmark
  • Estonia
  • Finland
  • France
  • Germany
  • Greece
  • Hungary
  • Ireland
  • Italy
  • Latvia
  • Lithuania
  • Luxembourg
  • Malta
  • Netherlands
  • Poland
  • Portugal
  • Romania
  • Slovakia
  • Slovenia
  • Spain
  • Sweden

What is the OSS?

Want to know more about the OSS (One-Stop Shop) portal. In that case, find out everything you need to know in our OSS Guide Everything You Need to Know. Our clear and comprehensive guide illustrates key information and requirements on every aspect of the One-Stop Shop that your business may need to be aware of.

Speak to Our Experts

Taxback International has over twenty-five years of experience in VAT compliance and consultancy experience with more than 12,000 clients worldwide. This combined with our innovative technology platforms, including Comply and TBI Pay, Taxback International create customer-focused solutions that simplify the complexities and frustrations of traditional approaches to VAT compliance.

Additionally, Taxback International offers registration and ongoing compliance services, and consultancy on available options for businesses wishing to register for the OSS or IOSS.
Speak to one of our VAT experts today.

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