One IOSS registration. Simplified VAT for 27 Countries

As part of the eCommerce package that came into force on July 1, 2021, the EU introduced the IOSS scheme concept. The IOSS scheme is a simplified registration and reporting system that permits taxable persons in the EU or non-EU countries to register only once to collect and remit VAT for supplies of low-value goods to EU customers.

There are differences in the registration for IOSS, based upon the place of establishment or fixed establishment of the applicant. When the taxable person is an EU business, it can register independently for the IOSS scheme. In contrast, the non-EU established business without a fixed establishment in any MS needs to use the services of the IOSS intermediary.

Taxable persons that aren’t established in the EU or have a fixed establishment in the EU need to use the services of the EU-based IOSS intermediary. Only a taxable person(IOSS service provider)that is an EU-established can be an IOSS intermediary for outside EU-based suppliers.

The introduction of the eCommerce 2021 package, eliminated the benefit previously used for imports of goods with the net value of less than EUR 22. New rules mandated that all goods imported from third countries or third territories are VATable. To simplify the reporting procedure for goods of low value (low-value consignments), the  EU established a simplified registration and reporting system for imports of low-value goods.

The Import One-Stop shop scheme can be used by e-commerce suppliers as well as e-commerce marketplaces either based in the EU or third countries or third territories. The IOSS scheme provides, among other perks, the elimination of exhausting customs clearance procedures, the imposition of import VAT at the point of entrance into the EU, and customs duties for LVG from non-EU countries.

Yes, they do. Based on the possibility that each Member State can be a Member State of identification for vendors of low-value goods, in each country, there is a specifically indicated portal where the registration and reporting procedure can be handled. Besides this, each tax authority has prepared a practical explanatory guide for IOSS compliance.

Three conditions must be met to be in a position to adhere to the IOSS reporting requirements. The goods must be dispatched from the third country or third territory; the intrinsic value of the consignment shouldn’t be above EUR 150; and the goods in question cannot be excise goods.

The marketplace operator can be treated as the deemed supplier, and be able to register for the IOSS if it makes the direct supplies of low-value goods(LVG) to the EU customers or facilitates the supply of LVG by third-parties.

There are many benefits of the simplified reporting scheme. One registration to cover all supplies of low-value goods to EU customers; no additional costs for customs clearance; no customs duties; much less compliance costs; significant reduction of time investment thanks to the fast customs validation; no hidden fees for customers.

No. The IOSS simplified reporting covers only tax payable. Taxable persons interested in claiming the input tax credits should additionally be VAT registered in the Member State where they incur such debts.

After the taxable person has obtained the IOSS VAT number or the intermediary has registered the taxable person, the registered economic operator is obligated to submit a monthly IOSS return and make the VAT payment until the end of the month following the reporting period.

The non-EU established business that doesn’t have a fixed establishment in the EU, must contract a EU-based intermediary for the full scope of VAT compliance concerning the IOSS scheme.

The Member State of registration(or as referred to in the scheme, Member State of Identification) will be the member state where the intermediary is established or has fixed establishment.

The IOSS scheme could be used only for the supplies of low-value goods, sold in consignments with a total value not exceeding EUR 150. The second parameter states that the goods must be transported from outside the EU, and that goods cannot be excise goods.

We already have a few clients who have established their business in a similar business model, such as yours. We have registered them for the IOSS scheme, and we operate as their intermediary for a full scope of the IOSS VAT compliance. When necessary, we also assist them with other VAT-related requirements, such as registrations in different countries.