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VAT, Customs & Excises

IOSS: the Import One Stop Shop in the EU

Since July 2021, there has been an electronic platform to fulfill VAT obligations on distance sales of imported goods. This platform is known as the IOSS (Import One Stop Shop)

What is the IOSS?

The IOSS stems from regulations concerning companies that sell goods stored outside the EU to individuals. To use the import one-stop shop, you must sell remotely by respecting the rules below:

  • Shipping or transportation of goods with value does not exceed €150;
  • Shipping or transportation of goods sold outside the EU;
  • The sale of goods not subject to excise duty such as alcohol, cigarettes and others;

The IOSS allows – from a single interface – to collect, declare and pay VAT to local authorities. As a result, several advantages arise from the implementation and use of this platform:

  • Facilitate the purchasing process and avoid fraud;
  • The buyer, invoiced at the time of purchase, makes it in full compliance;
  • The buyer therefore does not pay any unforeseen costs upon delivery of the goods (import VAT)

The IOSS also constrains “electronic interfaces” that facilitate the sale of imported goods by companies (marketplace). Note that the conditions of marketplaces are almost the same as for products marketed directly by distance sellers.

IOSS in the EU

Since July 1, 2021, the Import One-Stop Shop has been helping importing sellers to fulfill their obligations related to VAT on sales of goods imported remotely.

The IOSS also allows the supplier to make the VAT declaration on the behalf of the purchaser. However, the declaration can always be made by the purchaser.

One of the major consequences of the implementation of the IOSS for online sellers, is the removal of the VAT exemption on goods less than €22. Thus, all goods imported into the EU are now subject to VAT.

To use the IOSS, sellers must register there.

At the time of sale to a buyer from an EU Member State, the VAT rate applied is that in force in the country where the goods are delivered.

However, an exception applies when using the IOSS. If the remote seller sends parcels whose amount is more than €150, these products will be taxed on import into EU member countries.

Who is concerned by the application of the IOSS?

Since July 1, 2021, online sellers and electronic interfaces (marketplace) can register for the IOSS. To access it, sellers can register online from any EU member country.

If the company is not based in the EU, it must appoint in one of its member states a local intermediary to represent it (tax representative). This tax representative will be responsible for fulfilling the tax obligations (VAT within the framework of the IOSS) for the company represented. The registration of a seller on the Import One-Stop Shop is valid for all distance sales of imported goods to buyers established in the EU.

Distance sellers and platforms registered on the IOSS must comply with the following obligations:

  • Ensure that VAT is collected from the buyer on goods that are subject to this regulation. Those goods must be destined for an EU member country
  • Ensure that the value of eligible goods shipped does not exceed €150
  • Ensure that the amount of VAT to be paid by the buyer has been displayed before finalizing the order
  • Submit their VAT return to the Member State where they registered via the IOSS web portal
  • Pay to the EU Member State where its registered the monthly VAT that appears in its declaration
  • Keep all sales transactions made from the IOSS web portal for 10 years.

Eurotax is physically present in several Member States and offers you its tax representation or mandate service to help you with your administrative procedures related to VAT.

Do not hesitate to contact us or visit our webpage for more information.

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