Back your business with shipping sector experts Ship24 to ensure full, seamless IOSS business registration in as little as 3 days and start offering your customers the advantages that the IOSS scheme provides
There are two options for IOSS registration, which will depend on whether your business is established in the EU or outside of the EU.
If your business is within the EU, you have the choice of either registering for the Import One-Stop-Shop system directly or through an IOSS intermediary.
If your business is not established within the EU but wants to access IOSS solutions, it must register through an IOSS intermediary, which will perform services between the company and the IOSS. Ship24 offers premium fiscal intermediary service with the guarantee of EU VAT compliance and registration in as little as 3 days. Find out more about Ship24's complete IOSS solution today and get one of the best on your side.
Please note that businesses in the UK are considered outside of the EU, and they will need to get IOSS intermediary in order to register for the IOSS scheme.
No. IOSS registration is optional, and you can still sell services or goods to EU consumers without registering for IOSS or registering with an IOSS intermediary.
However, once a business registers for the scheme, it must conduct all business and sales to EU customers through the IOSS system. This means you cannot sell to customers in one EU member state under an IOSS number and another EU member state via a different VAT system. All VAT owed when making sales in the EU will be paid in a single EU member state through a a single IOSS number (which will be done on behalf of a company by an IOSS intermediary if a businesses is not registered for the scheme directly).
Any business can register for the IOSS system through an IOSS intermediary, but only businesses established within the EU will be able to register for the One-Stop-Shop directly. Although the scheme is optional, the new EU VAT tax rules are not, and all businesses selling to consumers in the EU must follow these rules from July 1, 2021 onwards.
The scheme will come into effect on 1 July 2021. If businesses are not registered by this point, they will still be operating under the new EU taxation rules, but without the advantages of the Import One-Stop-Shop (IOSS) system. Businesses, especially eCommerce and online marketplace based outside of the EU, are positioned to benefit from registration to the IOSS due to the advantages it provides, should they decide to. For more information about seamless transition to the new IOSS system, check out our very own IOSS intermediary solutions on our dedicated IOSS solutions page.
The EU Import One-Stop-Shop system is designed for online and electronic interface sellers, such as those on eCommerce marketplaces, online platforms, and so on. The IOSS scheme will apply to any imported goods that are worth 150 euros or less and dispatched from outside the EU at the point of sale.
Please note, imported goods will not be subject to excise duties.
The IOSS is designed to make importing low-value goods easier and more efficient, both for businesses and consumers. This is because it will standardize EU VAT solutions across the bloc.
In the long run, it also should save businesses money, which in turn can be passed on to customers. Equally, customers should not get any unexpected import tax bills after the purchase period, improving customer's post-purchase experience, which is proving especially important to major eCommerce sites for customer loyalty and retention. Such sites include Amazon, eBay, Etsy, and so on.
Furthermore, the idea is that dealing with VAT declarations and payments on cross-border transactions and imports at the point of sale will be a more stress-free shopping experience for customers, ultimately boosting sales.
Finally, IOSS registration will ensure more transparency, for not only buyers and sellers, but over the entire process, which will make it easier for EU authorities to manage and aims to reduce VAT fraud, which would ideally see the transition to the IOSS scheme pay for itself. Finally, IOSS registration should reduce administration costs for everyone involved in selling and delivering goods within the EU.
To give an example, say you are small hardware e-tailer based in China, and you are selling computer mouses for 20 euros each.
Under the previous system, your imports would have been exempt from tax due to the 22 euro import tax threshold, meaning that any product valued at 22 euros or less could be imported to any EU state tax-free.
Therefore, the customer would pay 20 euros plus shipping. However, the new EU VAT rules in 2021 will mean that all imported goods, regardless of the price, will be subject to customs fees.
Under the new IOSS scheme, this will be very different. For example, if the mouse is imported by a business who is IOSS registered, the customer will only have to pay the EU VAT surcharge fee (which is 21%) meaning they only need to pay 4.20 euro on top of the 20 euro product fee for the same transaction. This would mean the total bill would be 24.20 euros for the buyer.
Without IOSS registration, the business selling the mouse to a buyer in an EU country will be charged a customs fee (usually around 15 euros, but which varies from country to country). Then, the 21% VAT surcharge will also be added on the total amount, costing the buyer another 7.35 euros, meaning a total bill of 42.35 euros.
Please find all the relevant information about VAT costs and what is included on the EU website:
Please note, VAT rates and customs fees vary depending on the country in which the buyer is located.
The first step is registering your business, which can be done directly through the IOSS portal of any EU member country in which your company is based, by following the relevant registration process.
If your business is non-EU based, you will need to access the Import One-Stop-Shop scheme through an IOSS intermediary, which is a taxable person based in the EU, which can operate on your behalf.
The intermediary's role will be to fulfill any VAT obligations using an IOSS VAT number which will be applied to all your business transactions with customers in the EU. They will be responsible for filing monthly value-added tax returns and paying the correct amount to tax authorities of the member state they are based in.
Businesses signed up to the IOSS scheme must adhere to certain requirements, such as displaying the amount to VAT to be paid before and during the point of sale.
As well as advertising the newly prepared EU VAT rule changes, you should also inform customers of the benefits of the service. The good news about the IOSS VAT rule changes is that they are designed to benefit both businesses and customers, which should make it easier for businesses to explain the changes. If customers know ordering through businesses registered with IOSS is the fastest and cheapest option, they are more likely to be happy with upfront charges. Furthermore, it utilizes the enhanced transparency that the scheme provides.
Finally, shipping packages with IOSS will be slightly different, with 6 digit HS code needing to be applied to inform of the contents of the parcel, in line with new IOSS rules. Any shipment from a sale that will be made after July 1, 2021, will need to include this code so shops and businesses should prepare in advance for these changes.
Whether businesses register with IOSS or not, Ship24 can still track most parcels internationally, because they track packages using a tracking number or waybill which will be attached to parcels regardless of whether they are sent under the new EU VAT rules (IOSS) or not. Whether your parcel is being sent under using the IOSS system by 4PX in China to Royal Mail in the UK or being shipping by FedEx in the USA to CCT in Portugal, you can track any parcel end-to-end with Ship24.
Businesses who are looking for more comprehensive, professional tracking - including up to 1.5 million tracking calls per month or active pushed tracking event data integrated into their system within minutes - view our Tracking API and Webhook pages,
Some marketplaces have an IOSS that some businesses who operate on their site can use. Businesses that have shown an interest in registering for an IOSS that can be used include Amazon, eBay ETSY, and NOTHS.
The way this would work is that Amazon would be responsible for charging, collecting, and paying the VAT for the seller, through the Amazon IOSS number. When the parcel arrives in the destination country, they will know the VAT has been paid because of the IOSS details on the package.
The benefits of registering with the IOSS system can be found listed below: