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IOSS - Import One-Stop-Shop

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

IOSS is an abbreviation for Import One-Stop-Shop, which is a new scheme developed by the European Union that will charge Value Added Tax (VAT) rules on imports into all 27 European Union countries effective from July 1. Essentially, it is a new EU VAT tax rule.

The Import One-Stop-Shop (IOSS) itself is simply the system that will be used from July 1 onwards by businesses to declare and pay VAT to the EU. However, the new IOSS scheme represents a number of changes to VAT - or goods and services tax - which will be particularly important for business-to-consumer (B2C) sales and web-based marketplaces based outside of the EU.

The two biggest changes with the new VAT rules in the EU regarding the introduction of the IOSS scheme will be first, the removal of the 22 euro import tax exemption and secondly, making it the responsibility of the suppliers and electronic interfaces selling goods to EU buyers to collect, declare and pay owed VAT.

Whereas previously the buyer was responsible for paying any VAT owed when the goods were imported, now this must be prepaid. Furthermore, all goods - including imports valued under the previous 22-euro VAT threshold - will incur a VAT charge.

Otherwise, please find below a detailed breakdown of the IOSS portal, VAT tax changes, which businesses will be affected and why and other important information on the Import One-Stop-Shop system.

How do I register for an IOSS number?

The majority of non-EU marketplace merchants and e-sellers will have to use an Import One-Stop-Shop intermediary service to register and declare the VAT on their behalf. This will be necessary for any business that doesn't have a presence within the European Union. Registering for the new EU VAT IOSS number is advised by the bloc in order for businesses to realize the benefits of the scheme.

How is VAT paid to the EU under the IOSS?

Business-to-consumer VAT payments on eCommerce sales must be done through a monthly tax return by the nominated EU country, which will then be processed before being managed by relevant tax authorities. The EU VAT rates will be set by the IOSS system and may vary between countries.

This means that businesses will not need to register for VAT in each EU member state they sell goods in.

For online sellers and electronic interface sellers, they can register businesses on any EU countries IOSS portal, either directly if they are established in the EU or through an EU-established intermediary, in order to meet IOSS VAT obligations.

How can I track a parcel sent under the IOSS scheme?

You can still track all registered parcels sent under the new EU VAT tax rules system with Ship24. Ship24 will continue to cover the thousands of couriers and logistics companies it already does, regardless of whether a parcel is sent with the Delivery Duty Unpaid (DDU) or under the new IOSS scheme. All you will need is your shipment tracking number to begin tracking your shipment from anywhere in the world to the EU, such as with DHL, UPS, FedEx, or any national postal service including La Poste, PostNL or CTT.

You will still be able to track parcels to any EU country regardless of any EU VAT tax changes, with Ship24.

Does my business need to sign up for an IOSS number?

Although the IOSS system will be introduced on July 1, it is still an optional service, and goods can still be imported without it, such as under a DDU agreement. However, all parcels will be subject to the new VAT rules which will accompany the introduction of the IOSS.

If the IOSS scheme is not used, the courier company must collect the VAT from a customer before delivery and pay it to the authorities. The Import One-Stop-Shop scheme is designed to make the VAT payment process as simple as possible, with ultimate transparency for the customers, who can avoid facing any surprise fees, and ensure maximum customs efficiency going forward.

How long does it take to register for IOSS yourself?

Registration can vary between EU member states with applicants advised to allow at least four weeks in advance of their intent to export to the EU under the IOSS scheme.

How much does it cost to register for IOSS?

There are various options currently for registering with an IOSS. If you are a seller on a marketplace which already has an IOSS, such as Amazon, you can use their service. You can also apply for an IOSS directly if you are a business established within the EU or non-EU businesses can register for the scheme through an IOSS intermediary service.

These include paying for an annual service, which usually includes a one-off fee for initial registration and an annual fee going forward for services such as tax returns.

Other such services include 'pay as you go' solutions designed for smaller merchants with a lower volume of shipments.

How is IOSS applied to Ecommerce shipping?

For consignments with a value of 150 euro or less, VAT is charged during a sale by e-tailers and online marketplaces and it is their responsibility to make sure the VAT is paid.

Which businesses will be affected by the IOSS?

As a result of the Import One-Stop-Shop scheme, all goods imported to the EU will be subject to VAT from July 1, without exemption. This means that all businesses involved in importing to the EU will be affected, especially e-tailers and online marketplaces outside of the EU. Businesses should be aware that the IOSS could have a number of implications for their business.

Can I use the IOSS number from the marketplace where I sell my products?

If businesses are selling goods through a marketplace with an IOSS, they must use the marketplace's IOSS number for sales and forward it to the customs declarant.

Please note, any business using multiple marketplaces for sales should be careful to use the correct Import One-Stop-Shop number for different sales as well as a clear record of transactions made.

Liability of VAT payments will be the responsibility of the electronic interface, for example, Amazon, Etsy, eBay, Noths, and so on.

Do I need to sign up for an IOSS if I am based in the EU?

Businesses within the EU will still be subject to the new rules and will have the ability to sign up directly for an IOSS without needing an IOSS intermediary. However, they may use an IOSS intermediary if they desire.

In which EU member states does the IOSS scheme apply?

From July 1, the Import One-Stop-Shop scheme will apply to all 27 EU member states. These are listed below:

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, and Sweden.

What goods does the IOSS scheme cover?

The IOSS covers both Online Sellers and Electronic Interfaces. For both, IOSS covers the sale of goods that are

  • Dispatched or imported in from outside of EU bloc at the point of purchase
  • Transported in low-value shipments (with a value of 150 euro or less)
  • Not liable for excise duties

What is required from participants in the IOSS scheme?

In order to meet the requirements of the IOSS, online sellers and electronic interfaces must:

  • Submit all relevant information for customs clearance, such as their Import One-Stop-Shop VAT identification number, to the person customs declarant
  • Ensure all goods shipments do not exceed the 150-euro threshold
  • Display the price paid by the EU buyer or the VAT amount which is to be paid by the buyer in the EU
  • Be responsible for the collection of VAT payments on the supply of all goods destined for EU Member State
  • Produce a monthly electronic VAT return on the IOSS portal (to the member state your IOSS is with) and produce monthly VAT payment declarations to that member state.
  • Keep records of all IOSS sales for a period of 10 years.

Can I share my IOSS number with other businesses?

An IOSS number should not be given to other businesses and should not be used by third parties. An IOSS number should only be used for the customs declaration.

What if someone else uses my IOSS number?

If you discover that someone is using your Import One-Stop-Shop number, you must contact the tax office your IOSS is registered with as soon as possible.

What is the function of an IOSS intermediary?

An Import One-Stop-Shop intermediary can help with a number of IOSS solutions, including registration, declaration, and payments, online administration, return submissions as well as additional services depending on the service provider.

An IOSS intermediary is needed for Non-EU businesses and will aid such businesses with VAT declarations and payment.
All IOSS intermediaries are responsible for providing IOSS declarations and paying VAT for the businesses they represent, as well as being liable for correct VAT payments.

What happens if my IOSS declaration is wrong?

If the IOSS declaration made by an importer is incorrect, or the VAT for the declaration is unpaid, the IOSS intermediary directly and may hold her/him liable for payment.

Equally, IOSS intermediaries will be held responsible for multiple failures to provide declarations for importers or pay VAT, which can result in a two-year ban for IOSS intermediaries.

What are the VAT rates for all the EU countries?

VAT rates for individual EU member states vary between the 27 countries. Businesses wanting to know more about these rates are encouraged to visit the EU taxation page directly, which is listed below:

https://ec.europa.eu/taxation_customs/tedb/vatSearchForm.html

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