As of 1st July 2021, parcels under the value of €22 will no longer be exempt from VAT. All goods sold from Business-to-Consumer (B2C) will be subject to VAT, calculated at the VAT rate of the country you are delivering to. As the UK is no longer part of the EU, British-based eCommerce companies who sell across the EU will be affected.
This only affects Business-to-Consumers where the shipment is valued under €150 (£135). Private shipments and Business-to-Business shipments are not eligible for IOSS at this time.
Selling to customers in different EU countries could get quite confusing, so the EU has introduced a new system called the "Import One-Stop Shop" (IOSS)
What is the 'Import One-Stop Shop' (IOSS)
- The IOSS is an electronic portal designed for businesses to use to meet their VAT e-commerce obligations on distance sales of imported goods
- The IOSS will allow companies to report and pay EU VAT via one portal rather than in each individual country
- The IOSS aims to offer a hassle-free shopping experience where the seller is responsible for VAT declarations and payments
- The member states then pay the applicable VAT to each other directly
- Businesses can opt in to IOSS, but this will likely incur fees
The IOSS allows you to register with one of 27 EU tax authorities and to report and pay your EU VAT return in one monthly payment. The IOSS allows the correct VAT payment across the whole of the EU based on where your customers live.
If you decide to use IOSS, you must declare your unique IOSS number on the Customs invoice when booking at Interparcel.
Who can apply?
To use the IOSS, businesses will need a unique identification number. You can apply for this number if you are:
- The seller
- Marketplace, platform, portal or similar
- An intermediary (taxable person based in the EU who acts on your behalf)
Suppose your business is not based in the EU (for example, in England) and you do not have an establishment in the EU. In that case, you will need to appoint an EU-established intermediary to fulfil your VAT obligations and benefit from the IOSS.
IOSS can only be used if:
- You are an online seller or electronic interface
- The total value of goods is under €150 (£135)
- The goods are dispatched from outside the EU
Do I have to use IOSS?
- No, shippers do not have to register for IOSS, however extra administration will be required upon import of the parcel, and the customer will have to pay additional fees
- The shipment could be delayed upon arrival, meaning it will take longer to reach the customer
- If your business only sends a small number of parcels to the EU, and you want to use IOSS. It might be worth using a marketplace such as eBay or Amazon as the deemed reseller. This will allow you to use their IOSS number to send parcels to customers in the EU
I'm a UK business, and I want to use IOSS; what do I do?
- You can register your business on the IOSS portal of any EU member state for goods sold from the 1st July
- As the UK is no longer part of the EU, if your business does not have an establishment in the EU, you will need to appoint an EU intermediary to handle VAT obligations on your behalf
- You will need to ensure your online shop meets IOSS requirements and collect the appropriate VAT from the buyer at the time of purchase
- You will then declare each VAT payment to the EU, via an electronic VAT return through your intermediary
- Ensure you keep records of all eligible IOSS sales for 10 years
Where can I find an IOSS intermediary?
- For the purposes of this article, we have two examples of IOSS intermediaries below that e-commerce sellers can sign up with to manage IOSS and VAT payments
- These are not free services and there will be a charge for you to sign up for them
- These are best suited to online sellers who sell via their own website rather than a marketplace platform
There are lots of intermediaries you can use depending on how many IOSS eligible shipments you send to the EU each year. We recommend you do careful research to find the one that suits your business.
Please note: Interparcel have no connection with these intermediaries and have not used these services. It's important to do your own research before committing to any financial obligations.
- Deloitte IOSS service starts from £2000 a year for registration, monthly IOSS VAT filing and support
- Their service is best suited to businesses who are sending a large volume of IOSS eligible parcels to the EU each year
- Deloitte's service requires an accounting system that is able to charge the correct VAT rate applicable on the good you are selling into the EU and be collecting this tax at the point of sale
- KPMG IOSS service allows you to create an account on their IOSS portal, subscribe to their services and look after your IOSS Compliance
- KPMG offer 3 tiers of service packages depending on how many packages you send a year
- Prices start from €800 per year for up to 199 IOSS eligible packages so more suited to smaller businesses
Don't forget! if you are using the IOSS you must declare your IOSS number on the Customs invoice when booking through Interparcel. Without the IOSS number, your receiver may be charged VAT twice.
What if I sell my products on an online marketplace like Amazon or Etsy?
- Amazon, Etsy, and other online marketplaces have set up their own IOSS as they are responsible for VAT instead of the seller and can represent multiple sellers under one IOSS ID number
- They will issue you with an IOSS number that you must declare on the Customs invoice to confirm VAT has been paid- Remember, this only applies to goods worth €150 (£135) or less
- Don't forget to declare your IOSS number on the Customs invoice when booking at Interparcel
Please note: Interparcel do not claim to be financial, legal or customs experts. This blog is for information use only and you should always carry out your own research to verify the accuracy of this content. Please note, the information above may be subject to change. For more information, please read the official IOSS guidelines.