July 2021 marked the launch of two VAT simplification measures in the EU: One Stop Shop (OSS) and Import One Stop Shop (IOSS) schemes. While the former is aimed at service and domestic goods providers, the Import One Stop Shop scheme helps both EU and non-EU companies report for the sales of imported goods below the value of 150 EUR to EU customers.
Using IOSS, entities selling imported goods need to complete only one VAT registration to get access to reporting VAT in multiple EU member countries. Both EU-based and non-EU-located businesses can use this scheme.
VAT compliance made simple.
Since the VAT exemption for imported goods below 22 EUR in the EU was lifted, more goods became subject to VAT. IOSS helps distance sellers report for VAT of goods below 150 EUR by using a single platform for all sales to EU customers.
Fits online sellers and electronic interfaces.
Like the OSS scheme, IOSS considers electronic interfaces liable for VAT if it facilitates the sale to the customer in the EU. Therefore, both online sellers and electronic interfaces can register on the IOSS platform. Entities of non-EU origin can do that with the help of EU-based intermediaries.
Goods dispatched from outside of the EU at the time they are sold.
Goods transported in consignments worth less than 150 EUR (low value) containing one or multiple items.
Goods, not subject to excise duties (typically applied to alcohol or tobacco products).
IOSS registration can be completed via a platform provided by one of the EU member states. This country will be held the country of identification. Non-EU businesses can appoint an EU-based intermediary to register and do the VAT reporting on their behalf.
VAT compliance for IOSS users
IOSS users are obliged to provide correct VAT-inclusive prices to their customers based on their country of location. VAT is considered due at the time of receiving (accepting) payment from an EU buyer.
Shipping goods into the EU
Since VAT has been collected at the checkout, goods shipped into the EU become VAT-exempt. Seller’s IOSS identification number will be required at the customs to proceed with VAT-exempt customs clearance.
Reporting for VAT under the IOSS
While OSS users report for VAT every quarter, IOSS scheme requires submitting monthly VAT reports and payments. For non-EU businesses, these actions are completed by the appointed intermediary, and EU-based companies can either deal with the VAT compliance themselves or with the help of representatives.
Electronic interface should be understood as a broad concept which allows two independent systems or a system and the end user to communicate with the help of a device or program. An electronic interface could encompass a website, portal, gateway, marketplace, application program interface (API), etc.
Common examples of such electronic interfaces (EI) include Amazon and eBay, but as the above definition explains it can be extended to numerous types of online commerce systems.
A marketplace is considered to facilitate a sale when it participates in any of the following:
• Controls the terms and conditions of the sale;
• Authorises the charge to the customer in respect of the payment for the supply; and/or
• Orders or delivers the goods.
However, the marketplace is not considered to facilitate the sale if it only provides one of the following services in relation to the sale:
• Payment processing;
• Listing or advertising the goods;
• Redirecting customers to other marketplaces where the goods are offered without any further involvement in the sale.
No, if the goods are shipped in a package amounting to more than EUR 150, they will be taxed at importation in the EU Member State.
You can read about VAT rates in the EU here.