One-Stop-Shop (OSS) & Import-One-Stop-Shop (IOSS)

As of 1st July 2021, VAT rules for Distance Selling and more generally to BtoC E-commerce were amended.

A new regime aims to simplify VAT administrative procedures and make it more harmonized between all EU Member States.

For this matter, all EU and non-EU businesses selling goods and services online to European consumers were affected by the VAT reform, regardless of the sales channel they use.

The VAT One-Stop Shop (OSS) is a system implemented in the European Union on July 1, 2021, to simplify the Value Added Tax (VAT) obligations for businesses involved in cross-border sales of goods and services to consumers within the EU.

OSS system allows businesses to:

• Register for VAT in only one EU Member State: Instead of needing to register for VAT in every EU country where they sell goods or services to consumers.
• Declare and pay VAT for all eligible sales through a single online portal: This simplifies the process of fulfilling VAT obligations across the EU.

The OSS covers:

• Intra-Community distance sales of goods.
• Supplies of services to non-taxable persons in EU Member States where the supplier is not established.
• Certain domestic supplies of goods facilitated by electronic interfaces.

• The €10,000 threshold is global across all EU countries.
• Exceeding this global threshold triggers the obligation to charge destination-based VAT.
• Sellers have two main options for VAT compliance: the One-Stop Shop (OSS) in their home country or individual VAT registrations in each country of sale.

The Import-One-Stop-Shop is an electronic interface made to facilitate the collection, declaration and VAT payment for non-EU sellers using any of the sales channels below for importing goods to the EU: 

• E-commerce websites 
• Drop-shipping sales 
• When selling via marketplace (Amazon, Ebay, AliExpress, Fnac, Darty, cDiscount, etc…) it is usually the marketplace that is responsible to account for VAT using IOSS
• If your company is not established in the EU and does not have a local VAT registration, identification for OSS purposes is due from the 1st EUR

• All final clients are private individuals
• No stock is being held in the EU territory
• The value of shipments is below 150€
• Your company must appoint a local fiscal representative

An IOSS consignment refers to goods that meet the following criteria:

• • Imported from outside the EU: The goods are shipped from a country or territory outside the European Union.
  • Sold to EU consumers: The buyer is a non-VAT registered customer located in an EU Member State.
  • Value not exceeding €150: The intrinsic value of the goods in the consignment must not be more than €150. This excludes shipping and insurance costs.
  • Not subject to excise duties: The goods must not be products subject to excise duties (e.g., alcohol, tobacco).

• VAT Collection at the Point of Sale: If a seller is registered for IOSS, they will charge the applicable VAT rate of the EU country where the goods will be delivered to the customer at the time of purchase.
• Simplified Customs Clearance: Because the VAT has already been collected at the point of sale, the consignment should be customs-cleared upon import into the EU without the buyer facing additional VAT charges. The seller’s IOSS identification number is provided to the customs authorities.
• Monthly VAT Return and Payment: The seller then declares and pays the collected VAT through a single monthly IOSS return in the EU Member State where they are registered for IOSS.

• Register for IOSS: Businesses need to register for IOSS in one EU Member State. Non-EU based sellers often need to appoint an EU-established intermediary to do this.
• Charge Destination VAT: Apply the correct VAT rate of the EU country where the customer is located.
• Provide IOSS Number: Communicate the IOSS identification number to the party responsible for the customs declaration.
• Keep Records: Maintain detailed records of all IOSS sales.
• Submit Monthly Returns: File VAT returns and pay the VAT due by the end of the following month.