What the IOSS means for you

If you are an online seller located outside the European Union (EU) shipping goods to consumers in the EU, you might want to use the Import One-Stop Shop.

What is the IOSS?

The IOSS refers to the electronic portal that sellers outside the EU can use from 1 July 2021 to comply with new VAT e-commerce obligations for goods imported into the EU.

Notice

From 1 April 2021, you can register your business on the IOSS portal of any EU member state.

What is the purpose of the IOSS?

From 1 July 2021, all commercial goods imported into the EU from a third country or third territory will be subject to VAT irrespective of their value.

The IOSS enables online sellers to calculate and collect VAT from their customers at an online checkout and declare and pay it directly to EU tax authorities. Although using the IOSS is not mandatory, it might be the most convenient way to manage this new VAT obligation.

Important

If your business is not located in the EU, you will normally need to appoint an EU-established intermediary to fulfil your VAT obligations under the IOSS.

What is the scope of the IOSS?

The IOSS is an extension of the EU Mini One-Stop Shop (MOSS), which was launched in 2015 and trialled a single EU return for business to consumer (B2C) sales of digital, telecommunications, and broadcast services, such as streaming media, e-books, apps, and so on.

However, the IOSS is broader than the MOSS and covers B2C distance sales of goods that are:

  • Dispatched or transported from outside of the EU at the time they are sold.

  • Dispatched or transported in consignments with a value not exceeding EUR 150.

  • Not subject to excise duties, so the IOSS does not apply to alcohol or tobacco products.

Are there any exceptions for the applicability of the IOSS?

If you are an online seller, you do not need to charge VAT on distance sales of goods to EU consumers in the following circumstances:

  • You sell several goods to the same buyer and these goods are shipped in a package amounting to more than EUR 150. These goods will be taxed at importation into the relevant EU member state.

  • Your distance sales of goods are facilitated by an electronic interface, such as a marketplace or platform. In this situation, the electronic interface is responsible for the VAT due.

How does the IOSS work?

Online sellers registered in the IOSS need to apply VAT when selling goods destined for a buyer in an EU member state. The VAT rate is the one applicable in the EU member state where the goods are to be delivered.

IOSS_flow.jpg

Tip

Information about the VAT rates in the EU is available on the European Commission website and on the websites of EU national customs/tax authorities.

What are the advantages of the IOSS?

The primary advantage of the IOSS is that it facilitates and simplifies the declaration and payment of VAT for distance sales of goods imported into the EU with a value not exceeding EUR 150, which helps to minimise trade friction.

Another advantage of the IOSS is that it makes the online buying process easier for consumers who are charged only at the time of purchase, so they do not face any surprise fees when the goods are delivered.

Which Metapack products are affected by the IOSS?

Shipping is the only Metapack product affected by the introduction of the IOSS. Specifically, the following Shipping components and capabilities are impacted:

  • Delivery Manager

  • Shipping API

  • Standard commercial invoice

  • Carrier integrations (if changes are requested for the IOSS)

For the IOSS, the Shipping API and Delivery Manager support capturing the following values (all at consignment level):

  • IOSS number

  • Shipping charge value

  • Insurance charge value

  • Other charge value

Note

Shipping, insurance, and other charges are levied by online sellers at the point of purchase and are paid by buyers to the sellers. They cover delivery, (additional) insurance, and handling (or other related) charges.

Learn more about the IOSS

The EU has published information about the IOSS, including the following:

What you need to do