To provide convenience to cross-border online sales and the importation of low-value consignments, the new VAT e-commerce rules will come into force on 1st July 2021 in the EU.

Along with the cancellation of the exemption at the importation of small consignments of a value up to EUR 22, all goods imported in the EU will be subject to VAT.

To simplify the declaration and payment of VAT, the Import One Stop Shop (IOSS) has been published.

In this article, we will talk about:

1. What is IOSS (Import One Stop Shop)?

2. What are the advantages of IOSS?

3. Which supplies of goods do the IOSS cover?

4. How to register for IOSS?

1. What is IOSS (Import One Stop Shop)?

IOSS, also known as “import one-stop shop”, is a new system of new VAT declaration and payment especially for cross-border online sales and importation of goods to the EU.

It 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 into the EU as it was previously the case (for products over 22 EUR).

2. What are the advantages of IOSS?

• 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 the VAT and usually a customs clearance fee charged by the transporter.

3. Which supplies of goods do the IOSS cover?

• Dispatched or transported from outside of the EU at the time they are sold;
• Dispatched or transported in consignments with a value not exceeding a total of EUR 150 (low-value goods) even if the order contains more than one item;
• Not subject to excise duties (typically applied to alcohol or tobacco products).

Note: For the sellers who use third-party platforms like eBay/Amazon, etc., the platform will register for IOSS;

For independent sites or other electronic interfaces, the sellers need to register on their own.

4. How to register for IOSS?

From 1 April 2021, a business can be registered 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.

Note: Important information above all refers to the announcement from ec.europa.eu, kindly find more details about IOSS there.

With any uncertainties about your tax obligation, please kindly contact the professional tax consultant.

Find details about how to make declaration with IOSS on CJ.

Contact us if you need any assistance, CJ will be here to support you.