Information about IOSS
PLEASE NOTE THAT SHIPPING UNDER IOSS TERMS IS OPTIONAL
EU VAT changes from 1st July 2021: The IOSS (Import One-Stop Shop) Scheme
On July 1 2021, the European Union (EU) will introduce the Import One-Stop Shop (IOSS) scheme. The new system simplifies current VAT registration requirements for selling into the EU, making it easier for businesses to grow, stay compliant and protect your bottom line. Businesses will be able to sell to all 27 EU member states with just one VAT return. At the same time the 22 euro de minimis limit will be removed and VAT will be applied from all items over zero value.
What is the IOSS?
The Import One-Stop Shop is the electronic portal businesses can use from 1 July 2021 to comply with their VAT e-commerce obligations on distance sales of imported goods. The IOSS allows suppliers and electronic interfaces selling imported goods to buyers in the EU to collect, declare and pay the VAT to the tax authorities, instead of making the buyer pay the VAT at the moment the goods are imported.
Why is the IOSS being introduced?
Both new schemes OSS and IOSS will help in simplifying the VAT invoicing process while at the same time combating VAT fraud. This ensures fair competition for EU companies and the EU consumers will appreciate knowing that when buying goods online from outside or inside the EU, the VAT rate will be the same as for goods acquired in their home country.
How does the IOSS work?
The IOSS will be used for the importation of goods valued less than EUR 150 and it will simplify the declaration as well as payment of VAT of goods sold by distance sellers or electronic marketplace facilitating sales of goods. When registering to the IOSS, online sellers or online marketplaces/platforms receive an IOSS VAT number. This IOSS VAT number is used by postal operators and courier services to declare goods upon importation to the customs authorities. They can do so in any Member State regardless of the destination of the goods. Customs authorities verify the validity of the IOSS VAT number and then the package can be delivered to the customer. If a consignment consists of more than one item the total number of goods is being taken under consideration as the value of the consignment. The IOSS does not cover sales of goods that are subject to excise duties.
From 1 April 2021, you can register businesses on the IOSS portal of any EU Member State
If businesses are not based in the EU, they will normally need to appoint an EU-established intermediary to fulfil their VAT obligations under IOSS.
Is it worth me signing up to IOSS?
If you are a business shipping low value shipments (under 150 euros) regularly into the EU then IOSS should help sales as your customers in the EU will be charged the VAT on the goods and carriage when they purchase from you and avoid customs disbursement fees currently charged to them. In addition, clearance will be quicker.
If you sell via an online platform such as Ebay, Amazon, etc., you may be able to use their IOSS number and have access to the advantage of the benefits of IOSS.
Summary of IOSS
- You need to register in any EU country.
- You need to collect the VAT from the EU purchaser at the destination countries VAT rate for the items and the carriage.
- You need to account for this and pay the VAT monthly to the EU using your IOSS number.
- Only applies to items up to 150 euros in value.
- The recipient pays all charges upfront.
- They avoid the customs administration (disbursement) fees which can be from 10 to 30 euros.
- Makes shipping low value items more cost effective (effectively the costs are the same as pre-Brexit).Avoids customs delays.
Does this affect how I use the Worldwide Parcel Services Ltd website?
Some couriers haven't yet offered the option to accommodate IOSS. However, we have built in processes to enable our customers to book under IOSS terms on our website with minimal fuss;
- As you go through a booking on our website you will be asked if you are IOSS registered.
- If you are you will be asked to enter your IOSS number.
- Our system will apply the VAT rate for the destination country and allow you to select the currency to be used. There will be an in built currency converter.
- After that you enter the rest of the details as normal.
- If your shipment value exceeds 150 euros you will be warned and your booking will continue as a non-IOSS shipment.
- Commercial invoices will be generated electronically.
Note: We are not IOSS/tax experts and we recommend that you take independent advice before signing up for IOSS.