The EU Import One Stop Shop (IOSS)
Alinea Customs provide insight into EU VAT simplifications for B2C traders selling goods with a value of up to €150 to consumers in the European Union.
Import VAT can represent a challenge to UK businesses selling on a business-to-consumer basis into the European Union. Supply VAT is zero-rated when selling overseas. However, when the goods reach the destination, import VAT is likely to be chargeable, excluding certain categories such as food and essential groceries, and children’s clothing.
The IOSS enables online sales platforms to account for import VAT at the point of sale, for goods worth up to the value of €150. Enterprises that conduct business-to-consumer sales using online platforms may benefit from the facility which enables distance sellers to register and account for import VAT in just one EU country, rather than multiple member states.
The VAT payment must be paid to one Member State of identification, which will arrange for the payment to be disbursed to the relevant local authorities across the 27 nations of the EU, according to the destination of the sale.
This has the benefit of improved efficiency, enabling traders to reduce time in administration, improved customer satisfaction, as consumers do not face an import VAT bill, and an overall reduction in VAT fraud.
There are two schemes:
The union scheme one for businesses established in the EU, or that have at least one branch in the EU;
The non-union scheme for businesses that are not established in the EU.
Obligations of the online market place when selling into the EU using the IOSS facility
The seller must ensure that the IOSS VAT identification number reaches the EU customs where the goods will be imported to;
the seller must display the amount of VAT to be paid by the buyer in the EU, at the latest when the ordering process is finalised;
the seller must ensure the collection of VAT from the buyer on the supply of all eligible goods with a final destination in an EU Member State;
the seller must make sure that eligible goods are shipped in consignments not exceeding the EUR 150 threshold, even if this total is only achieved by more than one item;
to the extent possible, show on the invoice the price paid by the buyer in EUR;
the seller must submit an electronic monthly VAT return via the IOSS portal of the Member State where they are identified for IOSS;
the seller must make a monthly payment of the VAT declared in the VAT return to the Member State where you are identified for IOSS;
the seller must keep records of all eligible IOSS sales and/or sales facilitated over 10 years.
For further details, please contact the customs consultancy team at Alinea Customs, and visit IOSS: https://ec.europa.eu/taxation_customs/ioss_en.