EU VAT changes from 1 July 2021: The IOSS (Import One-Stop Shop) Scheme

On July 1 2021, the European Union (EU) will introduce the Import One-Stop Shop (IOSS) scheme. The new system simplifies current VAT registration requirements for selling into the EU, making it easier for businesses to grow, stay compliant and protect your bottom line. Businesses will be able to sell to all 27 EU member states with just one VAT return.

What is the IOSS?
The Import One-Stop Shop is the electronic portal businesses can use from 1 July 2021 to comply with their VAT e-commerce obligations on distance sales of imported goods. The IOSS allows suppliers and electronic interfaces selling imported goods to buyers in the EU to collect, declare and pay the VAT to the tax authorities, instead of making the buyer pay the VAT at the moment the goods are imported.

Why is the IOSS being introduced?
Both new schemes OSS and IOSS will help in Simplifying the VAT invoicing process while at the same time combating VAT fraud. This ensures fair competition for EU companies and the EU consumers will appreciate knowing that when buying goods online from outside or inside the EU, the VAT rate will be the same as for goods acquired in their home country.

How does the IOSS work?
The IOSS will be used for the importation of goods valued less than EUR 150 and it will simplify the declaration as well as payment of VAT of goods sold by distance sellers or electronic marketplace facilitating sales of goods. When registering to the IOSS, online sellers or online marketplaces/platforms receive an IOSS VAT number. This IOSS VAT number is used by postal operators and courier services to declare goods upon importation to the customs authorities. They can do so in any Member State regardless of the destination of the goods. Customs authorities verify the validity of the IOSS VAT number and then the package can be delivered to the customer. If a consignment consists of more than one item the total number of goods is being taken under consideration as the value of the consignment. The IOSS does not cover sales of goods that are subject to excise duties.

From 1 April 2021, you can register businesses on the IOSS portal of any EU Member State. If businesses are not based in the EU, they will normally need to appoint an EU-established intermediary to fulfill their VAT obligations under IOSS.

Is IOSS for you?

By registering for IOSS your business could benefit from:
  • Access to all 27 EU member states
  • Improve your cash flow by removing import VAT payments
  • Enhance customer experience with reliable, transparent and accurate pricing at checkout
You do not need to charge VAT on sales if:
  • The consignment is more than 150 EUR. Your sales are facilitated by an electronic marketplace.
  • In this case the marketplace needs to collect and remit VAT.
The new rules could impact how you do business in the EU. The European Commission has published more information about these changes here.

Need more information?

Do you need help with the Import One-Stop Shop (IOSS) scheme. We work with Businesses who sell to all 27 EU member states and we offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

Our fantastic team at A&C Chartered Accountants are here to help.

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