IOSS solutions for Amazon businesses

What are the IOSS Amazon changes?

The new VAT reforms and Import One-Stop-Shop (IOSS) system introduced in the European Union has impacted all business-to-consumer (B2C) e-commerce sellers, especially those operating on Amazon.

The new EU rules mean that all commercial goods sold by distance sellers to buyers located in the EU are now subject to Value Added Tax (VAT). Previously, items valued at under 22 EUR could be sold without VAT. However, now all items sold to EU buyers, regardless of their value, will be taxed.

To help businesses who sell low-value goods in the EU make the transition to the new VAT rules, the EU also introduced the Import One-Stop-Shop system, in order to provide benefits for buyers and sellers of these types of goods. By registering for the IOSS scheme, sellers can ensure optimal delivery times and the best post-purchase experience for buyers.

The new EU tax rules will apply to all sellers, including those on Amazon. The IOSS system on the other hand is optional, meaning that sellers will be able to choose whether they sell products under the new scheme.

How do I make sure my Amazon products meet IOSS obligations?

If you are an Amazon seller and you are going to use an IOSS number, you need to make sure when selling products that you meet the new IOSS EU obligations. These are listed below:

• The seller, or marketplace on which they sell, is registered for either the One-Stop-Shop (OSS) or Import-One-Stop-Shop (IOSS) system. The former can only be businesses or marketplaces established within the EU, where those who register under the IOSS can be established either within the EU or outside the EU. Both schemes have the same obligations, but those who register for the IOSS scheme will need to appoint an EU-based intermediary who will declare and pay owed VAT on behalf of the businesses to the relevant tax authority.
• Display the correct EU VAT applicable to each product depending on where in the EU the customer is based. This is because, despite IOSS meaning that you can pay EU-wide VAT charges to one EU tax authority, there are still different VAT rates on products depending on the country in which the product is sold.
• Ensure VAT is collected, declared, and paid to the relevant tax authority, either directly under the OSS scheme or to the IOSS intermediary.

How will Amazon be affected by IOSS?

Amazon, as an international marketplace that facilitates the sale of goods from international merchants in the EU, has registered for the IOSS system. However, it is unclear at this point whether it is optional for sellers who use the platform to sell under its IOSS platform or whether it will be a requirement for any eCommerce sales made under the platform.

However, distance sellers using the platform may want to take advantage of using an Amazon IOSS number, due to the perks that the scheme offers sellers.

Please note, in order to send parcels under IOSS, businesses or marketplaces must register for the scheme and be responsible for collecting, declaring, and paying tax. Regardless of whether sellers on Amazon use the new IOSS, the new EU VAT rules will still apply to all goods.

What are the benefits of using an Amazon IOSS number?

The benefits of using the IOSS scheme when selling on Amazon include:

• Tax transparency: Import One-Stop-Shop compliance will require that VAT is displayed and collected at the point of purchase, meaning all fees will be presented and payable at that point by the customer.
• Rapid import clearance: Due to the fact the VAT will be prepaid at the point of sale, IOSS shipments can be fast-tracked through customs.
• Consolidated VAT payments: Under the IOSS system, EU-wide tax payments will be consolidated into a single payment to one EU tax departments, meaning sellers and marketplaces do not need to register for VAT purposes in each EU country in which they sell goods.
• Simplified logistics: Although VAT rates charged on an item will need to correspond with the rates charged in which the buyer is located, goods can be imported into any EU country and then transported to another country, without affecting IOSS compliance.

Indeed, because VAT is collected at the point of sale, meaning that not only is the chance of any hidden processing or handling fees removed because all owed tax will already be paid, but that IOSS parcels can be fast-tracked through customs. For businesses, IOSS means a consolidated and simplified tax payment scheme, which will require any owed VAT from sales to buyers in any member state payable in a single payment to a single EU tax authority.

Ship24 offers full IOSS intermediary solutions at competitive prices, including registration within as little as two days and full VAT compliance support for businesses using the IOSS scheme. Find out more about getting an IOSS number or IOSS registration on our dedicated FAQ pages, or head to our IOSS solutions page to get your IOSS number.

Which couriers do Amazon IOSS parcels get delivered by?

Amazon and sellers which use the platform use several different couriers and logistics companies to deliver consignments. IOSS Amazon packages will be no different. This means Amazon IOSS parcels could be delivered by any of the existing couriers used, such as 4PX, UPS and USPS from overseas or DHL, DPD, and GEODIS within Europe.

Please note, if an item is being shipped by a courier for a seller to a buyer in the EU under the IOSS scheme, the handler will need to be made aware as they will act as the customs declarant. Making the customs declarant aware that the goods are IOSS compliant will make sure that the parcel can benefit from rapid customs clearance. This is because when an item is identified as being shipped under the Import-One-Stop-Shop system, customs will know the VAT has been prepaid on the item and therefore it can be fast-tracked and dispatched for delivery immediately.

This will be done at the point of import, where goods being imported to any of the 27 EU countries will separate shipments sent under IOSS and those with VAT still owed. Where the former will pass through customs faster, the latter may be subject to further processing or handling fees from the courier or EU customs and as a result, delivery turnaround could be affected.

How long do Amazon IOSS parcels take to be delivered?

Amazon usually delivers goods internationally within 1-2 weeks, however, deliveries to some EU countries can take up to 6 weeks depending on the order and distance from dispatch location to the final destination.

What is certain under the new IOSS scheme is that once shipments arrive in the EU, they will benefit from fast-track clearance. However, sellers should note that even with the new IOSS fast-track customs system, Amazon parcels could still experience delays depending on a number of circumstances, such as a lack of capacity of local courier company: Once your parcel has arrived and passed through customs, the turnaround on delivery will still depend on the capability to of the local handler responsible for delivery. This could also be affected by local public holidays (such as during Christmas or Chinese New Year), adverse weather conditions, or global/regional pandemics.