What is IOSS (Import-One-Stop-Shop)?
From 1 July 2021 the value added tax (VAT) exemption for the importation of goods with a value not exceeding EUR 22 will be removed. As a result, all goods imported to the EU will be subject to VAT. The Import One-Stop Shop (IOSS) was created to facilitate and simplify the declaration and payment of VAT for distance sales of imported goods with a value not exceeding EUR 150.
The IOSS facilitates the collection, declaration and payment of VAT for sellers that are making distance sales of imported goods to buyers in the EU. The IOSS also makes the process easier for the buyer, who is only charged at the time of purchase, and therefore does not face any surprise fees when the goods are delivered. If the seller is not registered in the IOSS, the buyer has to pay for the VAT and usually a customs clearance fee charged by the transporter at the moment the goods are imported in the EU.
Contact MyDutyCollect IOSS team to find out about registering for an intermediary IOSS@Mydutycollect.eu
How does IOSS Work?
Electronic interfaces registered in the IOSS will pay the VAT collected on a sale to a buyer in an EU Member State instead of the actual seller. The VAT rate is the one applicable in the EU Member State where the goods are to be delivered. Information on the VAT rates in the EU is available on both the European Commission website1 and on the websites of national tax administrations.
How Can You Register?
You can register your business on the IOSS portal of any EU Member State from 1 April 2021. If your business is not based in the EU, you will normally need to appoint an EU-established intermediary to fulfil your VAT obligations under IOSS. Your IOSS registration is valid for all distance sales of imported goods made to buyers in the EU.
Role of an Intermediary?
Taxable persons (suppliers and electronic interfaces) who are not established in the EU or in a third country with which the EU has concluded a VAT mutual assistance agreement need to appoint an intermediary to be able to use the import scheme. Other taxable persons (i.e. the ones established in the EU) are free to appoint an intermediary, but are not obliged to do so.
The intermediary needs to be a taxable person established in the EU. He has to fulfil all the obligations laid down in the import scheme for the supplier or electronic interface that appointed him, including the submission of IOSS VAT returns and payment of VAT on the distance sales of imported low value goods. However, the supplier or the deemed supplier who appointed an intermediary remains liable for the VAT obligations, including the payment of VAT together with the intermediary.
In practice, Member States will attempt to recover the VAT from the intermediary and if this attempt fails Member States can try to recover VAT from the supplier. It must be pointed out that the intermediary is not necessarily the person that lodges the customs declarations for release in free circulation.
Before being able to register a taxable person in the IOSS, the intermediary first needs to sign up in the Member State where he is established to be able to use the IOSS for suppliers making distance sales of imported low value goods. He will receive an identification number enabling him to act as intermediary in the import scheme (Article 369 q(2) of the VAT Directive). This number serves for that Member States the purpose of identifying the intermediary. However, this intermediary identification number is not a VAT number and cannot be used by the intermediary to declare VAT on taxable transactions. Subsequently the intermediary will register in his Member State of identification each taxable person he represents and he will receive an IOSS VAT identification number in respect of each taxable person for which he is appointed (Article 369 (3) of the VAT Directive). Member States may lay down rules or conditions to be imposed on taxable persons who want to act as intermediary in the IOSS (e.g. guarantees).