If you are an online seller located outside the EU and you are not registered in the IOSS after 30 June 2021, but you sell goods that fall within the EUR 150 IOSS threshold:
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A buyer in the EU will have to pay the VAT.
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The buyer might also have to pay a customs clearance fee charged by the carrier.
The combined effect of these charges might start to reduce your sales to EU consumers over time.
However, your decision about whether to use the IOSS might depend on many considerations, including the following.
There are several scenarios where the IOSS might affect online sellers.
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Scenario |
Description |
|---|---|
|
Online sellers |
An online seller registered with the IOSS will collect VAT at the point of purchase on orders that comply with the IOSS. This is variable based on the type of goods sold and the country where a purchase was made. This information along with a seller’s IOSS number must then be passed to the carrier to help identify and validate where VAT should be collected at the point of import. |
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Electronic interfaces (marketplaces or platforms) |
If an online seller sells goods through an IOSS-registered marketplace, the marketplace will collect VAT at the point of purchase on applicable orders. This is variable based on the type of goods sold and the country where a purchase was made. This information along with IOSS number of the marketplace must then be passed (usually by the seller) to the carrier to help identify and validate where VAT should be collected at the point of import. |
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Shipping on behalf of others |
If an online seller is sending goods on behalf of different sellers, or multiple online sellers are selling goods through multiple IOSS-registered electronic interfaces:
|
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Paying direct to tax authorities |
Sometimes, an online seller might have its own arrangements with a tax authority whereby VAT will be paid directly to the authority instead of being collected by the carrier. Any such arrangements are usually captured in a formal agreement between the customer, their carrier, and the relevant tax authority. |
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Direct injection |
If online sellers inject shipments directly into a destination country, the customs process will occur at the point of import by the seller or its agent, and might include different data declarations for either of the following reasons:
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You might decide that that your business will have to make use of the IOSS from 1 July 2021 onwards, but you might be uncertain about whether your business needs its own IOSS number.
Deciding whether to get an IOSS number will depend on how your business sells to consumers located in the EU.
|
Sales method |
Actions |
|---|---|
|
Marketplace/platform only |
Verify that the marketplace or platform has registered for the IOSS and use the IOSS number of the marketplace or platform for all of your EU sales through that electronic interface. |
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Direct sales only |
Register for the IOSS and use the IOSS number assigned to your business for all of your EU sales. |
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Combination of direct and marketplace/platform sales |
Use the correct IOSS number for each type of sale:
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The following requirements are not specific to the IOSS but they highlight the need for accurate calculations of cross-border shipping duties and taxes.
Note
All of these requirements apply irrespective of the carriers you use or the customs agreements you might have.
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Requirement |
Description |
|---|---|
|
Additional charges for shipping, insurance, or other costs |
If additional charges to the consumer are levied at point of purchase, these must be specified in the data provided by the seller to the carrier. Additional charges should be specified under one of the following categories:
The values, if provided, will be printed on the commercial invoice or included in the paperless feed to the carrier. |
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Product values excluding VAT |
Values of the goods in the parcels passed to carriers by means of manifests, declarations, or commercial invoices should exclude VAT. |
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Product descriptions and harmonised codes |
Online sellers should ensure that an accurate product description is included in each declaration and that a full and complete harmonised code is provided. |