On July 1, 2021, the European Union enacted new VAT rules and a new Import One-Stop-Shop (IOSS) system, which has affected how businesses and distance sellers sell goods to EU customers. This means that businesses who use AusPost to do so, should familiarize themselves with the changes in order to decide how these changes will affect them and how to capitalize on the benefits the scheme could potentially bring their business.
The two major changes are explained below:
Please note, businesses can register for the IOSS system directly or via an IOSS fiscal intermediary if they are established within any of the 27 member states. If they choose to register directly, it should be within one of the member states in which they are established. If they choose to register via an intermediary, they can register in the state in which the intermediary is registered. If a business is not established in the EU (non-EU businesses), they must appoint an IOSS intermediary - who are registered within the EU - to pay VAT on their behalf.
Ship24 offers full IOSS registration and ongoing IOSS compliance support for international businesses at competitive prices. Our services include
Enhance your business offerings by capitalizing on IOSS with Ship24's complete fiscal intermediary service solutions.
Under the new EU rules, all packages valued at 150 EUR or less sent under the IOSS system will need to have VAT prepaid (which should be done at the point of sale). If you are sending your package with Australia Post, your business or marketplace will need to supply your IOSS number as AusPost will be your customs declarant.
Your package will also need to have a customs VAT reference number on the parcel so it can be identified at EU customs and be treated as an IOSS parcel. Please note, that under the IOSS system, all goods sent under the IOSS should have VAT, formal clearance, and customs clearance fees applied at the point of sale. This total value should not exceed the maximum 150 EUR threshold. For more information about Australia Post IOSS numbers and how to submit your IOSS number to your customs declarant (AusPost), contact AusPost directly via their website.
Related:IOSS Marketplace IOSS number IOSS HMRC
The new IOSS system, which requires VAT to be paid at the point of sale, should mean a faster delivery turnaround on eCommerce items, which is good news for both buyers and sellers. As all outstanding tax is paid before shipping, customs processing of IOSS Australia Post parcels should happen much quicker, because of the removed need to individually access owed VAT on each AusPost parcel.
The new system will see Australia Post IOSS reference numbers added to parcels, which will allow customs departments in the EU to identify the parcel as sent under IOSS, meaning it can be fast-tracked and dispatched sooner. Furthermore, prepaid IOSS AusPost parcels should not be held by customs as there will never be any outstanding VAT owed on the items as long as the VAT is properly paid and declared. Unlike other shipping methods, which mean that customers could incur customs clearances fees or be required to reimburse VAT payments before final delivery can be made, AusPost IOSS packages should pass straight through customs for dispatch.
Related:IOSS UK IOSS Ireland IOSS USPS
The IOSS system offers multiple benefits for customers, which in turn should boost confidence in purchases made from distance sellers, producing more B2C sales. Some of the benefits of the IOSS system are listed below.
Related:IOSS Royal Mail IOSS Australia Post IOSS Fedex
If you decide to register for the IOSS system, you will be required to register in either the EU member state in which you are registered or alternatively, if you are not established in the EU, via an IOSS fiscal intermediary.
Businesses who register and obtain an IOSS number must also meet EU shipping obligations as part of all sales made under the scheme. These include detailed descriptions of the goods being sent to the EU (such as what materials they are made from) and the provision of a correct HS tariff code (in line with the EU's ICS2). For more information on this please visit the European Commission website.
Please note, that some marketplaces are registered for IOSS and businesses selling on that electronic interface platform can use the IOSS number. This is the case for some marketplaces like Amazon, but not others like Shopify. Please check with the marketplace you sell goods on to be sure that it has a useable IOSS number.
Related:IOSS DHL IOSS UPS IOSS Customs
Those businesses who do not want to opt into the IOSS scheme, or who have not yet received their registration confirmation and IOSS number, can still send goods to the EU. However, as of July 1, 2021, VAT will be due on all goods imported into the EU. This means that not only could parcels not sent under the IOSS scheme face delays at customs, but that they could face manual handling fees which could work out more expensive than sending under the IOSS, especially on low-value goods.
Ship24 offers complete IOSS fiscal intermediary solutions at globally competitive prices, alongside our industry-leading logistics and shipping services. If you want to be represented by an IOSS representative with an international team of highly experienced sector staff, let Ship24 make the transition to IOSS easy. For more information, click the 'Get an IOSS number' button at the top of the page or check the solutions tab and click IOSS for more information on our services.