With effect from 1st July, 2021 the new Import-One-Stop-Shop (IOSS) scheme will be introduced, as part of the new EU VAT reforms for eCommerce sellers and online traders. After the 1st of July, VAT exemption for importing goods to the EU, with value not exceeding EUR 22 will be withdrawn – which means all goods imported to the EU will be subjected to VAT declaration and payment.
What is the Import-One-Stop-Shop (IOSS) scheme?
This scheme is specifically for the sale of “low value” goods (not exceeding €150) from outside the EU to buyers in the EU Member State. If the value of your goods is higher than €150, then you should follow other traditional Import VAT rules. In simple words, IOSS facilitates charging VAT rate of the destination country, at the point of sale for low value goods not exceeding €150 .
How it work?
1. Online sellers:
If you are an online seller registered for the IOSS scheme, then you will be required to apply VAT on all goods imported and sold to your buyers in the EU. You will have to apply VAT rates of the EU Member State where your goods will be delivered (buyer destination).
2. Market places:
Electronic interfaces or market places registered for the IOSS scheme will be obliged to collect VAT on goods sold to EU customers. In this case, the buyers will be charged at the time of purchase, so they don’t have to pay anything additional at the time of delivery of goods.
Note: If the seller is not registered in the IOSS, the buyer in EU will have to pay VAT, in addition to the custom clearance fee charged by the transporter, courier or postal service.
3. IOSS VAT reporting and filing:
IOSS returns are completed monthly and you’ll have to declare import VAT due for all your sales in EU countries. VAT due payment should be made to the responsible tax authorities of your nominated EU Member State as per schedule.
Advantages of the new Import-One-Stop-Shop (IOSS) scheme
- The new IOSS scheme will be launched to simplify VAT declaration and payment of imported goods with a value not exceeding €150
- It facilitates the collection/declaration/payment of VAT for sellers who make sales of imported goods to consumers in the EU
- Buyers in EU will be charged only once during the time of purchase
- Buyers need not pay during delivery of goods
- Enables easy and quick custom clearance on imported goods
- Helps authorities to track cross border sales effectively
- Eliminates VAT fraud across EU nations
How to register for the One-Stop-Shop (OSS) scheme?
If you are based out of the EU, you can register your business on the IOSS portal of any EU Member State. After successful completion of the IOSS registration process, you’ll be issued with a unique IOSS VAT identification number.
If you are a non – EU seller, then you will have to appoint an intermediary, who is registered with tax authorities in their country of establishment. Your intermediary will be able to help you fulfil VAT obligations under IOSS scheme and obtain your unique identification number from tax authorities.
Get started with IOSS using SalesVAT:
Whether you are an EU established or Non-EU established trader, we help you get started with the new EU eCommerce VAT rules. With years of experience in dealing with VAT and related compliance/regulatory procedures, we keep ourselves updated in order to help you stay compliant and enable hassle free cross border trade. Our SalesVAT software can provide an automated report with all your sales and VAT figures – for all 27 EU states making your IOSS return filing a breeze.
Automate your VAT today using SalesVAT software or talk to our experts today to find out how you can make the best use of SalesVAT.
EU VAT eCommerce PackageImport-One-Stop-ShopIOSSNew EU VAT rulesOnline marketplacesOnline sellers