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IOSS solutions for businesses using UPS

Whether your businesses uses UPS or any other courier, get the best fiscal intermediation and EU VAT representation with the experts to ensure you take full advantage of the Import One-Stop-Shop scheme.

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How will Import One-Stop-Shop (IOSS) affect UPS services?

The two main ways IOSS UPS parcel delivery services will benefit from the Import One-Stop-Shop is as follows:

  • Faster customs clearances times: IOSS UPS parcels will benefit from a fast-track customers clearance in the EU, due to the fact no outstanding tax will be owed on parcels.
  • Reduced UPS processing times: With VAT paid at the point of sale, UPS IOSS parcels should also benefit from faster processing time by UPS itself. It also means that unlike the DDU method, where UPS covers the expenses and takes on the risk of paying import fees before reimbursement from the recipient, it can instead just concentrate on delivery.

Otherwise, UPS will be largely unaffected by the new EU VAT changes, as they will mostly impact businesses, with customers able to send IOSS UPS deliveries as well as the delivery options that were available to them previously.

Overall, the new Import One-Stop-Shop system is predominantly designed to more efficiently facilitate cross-border eCommerce for all stakeholders, reduce eCommerce VAT fraud (particularly via the removal of the 22 EUR de minimis) and ultimately make the market fairer for businesses within the EU when it comes to VAT.

What do the new EU VAT changes mean for businesses that use UPS?

The new EU rules will mean two major changes for businesses. Firstly, will be the end of the 22 EUR VAT de minimis, which means that all goods imported to the EU not just those over the value of 22 EUR will be taxed.

The second is the creation of the new One-Stop-Shop (OSS) and Import OSS (IOSS) scheme, which can be used by businesses selling goods through an electronic interface (marketplace or online business). The IOSS system will cover all goods sold to EU customers valued at up to 150 EUR.

Only businesses established in the EU will be eligible for registration to the OSS scheme, with non-EU businesses needing to register for the IOSS scheme through an IOSS fiscal intermediary, who will pay owed VAT to the relevant authorities on their behalf. VAT will be collected at the point of sale by the e-tailer or marketplace and submitted to the IOSS intermediary.

The benefits of the scheme include single registration for all VAT sales made in the EU, the removal of hidden fees for customers due to VAT needing to be paid at the purpose-point, and faster customs processing and delivery. It also aims to reduce the amount of VAT the EU misses out on each year due to false claims of packages being valued under the previous tax exemption value.

Is UPS responsible for collecting IOSS VAT?

Only sellers and IOSS registered marketplaces are responsible for collecting, declaring, and paying owed VAT on sales within Europe, either by paying directly under the OSS or paying an IOSS intermediary who will pay the tax on their behalf.

Therefore, IOSS UPS payments are not possible. In fact, UPS can still be used by any business to deliver orders sent to the EU whether under the IOSS import system or other delivery options (such as DDU and DDP). Couriers and carriers will only be involved with the payment of tax if they have paid the owed VAT on imports in order to make the delivery. In this case, the courier will ask to be reimbursed by the customer before delivery is made. This is different from the IOSS system, as because the VAT is paid at the point of sale, it means that the UPS will not be involved or responsible for IOSS.

Please note, IOSS covers all goods imported to the value of or less than the 150 EUR threshold.

How fast will my UPS parcel be delivered with IOSS?

The idea behind IOSS is a simplified pre-paid VAT system that promises faster and more efficient delivery times for cross-border eCommerce trade within the EU. Therefore, in time, delivery times are expected to reduce due to faster customs clearances and in-house courier processing. However, the delivery turnaround on your parcel could still be affected by the following:

  • Size and weight: Both of these will be a factor when it comes to the delivery timeframe of your UPS package.
  • Shipping/transportation: The shipping method used for your UPS parcel will also determine how long it takes your parcel to arrive.
  • Unexpected delays: Weather conditions, road and shipping lane blockages, and so on, could all cause delays to an IOSS UPS parcel
  • Local events: In Europe especially, holiday periods such as Christmas can see large volumes of orders which may delay delivery times as couriers are stretched

What will the format of a UPS IOSS tracking number be?

Under the IOSS system, tracking numbers for UPS parcels will likely remain similar to their processors, which are usually in the format of around eighteen letters and numbers. An example is shown below:

  • IL 111 BB1 8592957409

IOSS numbers will be different from UPS tracking numbers and do not necessarily have to be displayed on shipments being sent and on the whole, it is advised not to do so to avoid another business potentially stealing/using your IOSS number. An IOSS number is solely for tax purposes and will be separate from the tracking number (however, there may be some reference to your IOSS number made on your UPS tracking number in the future, but this will not include the full IOSS number or the IOSS number will be partly covered).

Should I send my parcel with UPS now IOSS has been introduced?

UPS is a global leader in parcel delivery and logistics, being one of the most well-known couriers worldwide - especially in America. Therefore, the company has recognized the need to keep customers informed on the impact of IOSS on UPS customers, to ensure the millions of B2C goods it delivers for buyers and sellers in the EU every year are still possible.

Sending an IOSS UPS parcel is just as safe and reliable as it would be sending a parcel via any other delivery method, regardless of how import tax is paid. In fact, the new EU import scheme will likely improve the efficiency of UPS IOSS sent parcels, especially for eCommerce businesses, due to the advantages the scheme offers.

Can I track UPS IOSS deliveries made on Sundays?

Currently, UPS does not offer Sunday deliveries across the areas which it covers. The only way that delivery of a parcel sent with UPS IOSS would happen would be if it was handed over to a local courier during the last mile of its journey. For example, if the parcel was handled in the US by UPS but was then handled by a different courier upon arrival in Europe (such as DHL) who does offer Sunday delivery. However, you will need to check with the courier in question to see whether this service is available.

With Ship24, you can get the latest information on the status and location of your IOSS UPS parcel at any time, twenty-four hours a day, seven days a week. Ship24 will also notify you of the current handler so you can know if your parcel could be delivered on a Sunday. If you need professional tracking services for your business, look no further than our market-leading webhook and API tracking services.

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