Import One-Stop-Shop (IOSS): How we can help

From 1st July 2021, all commercial goods imported into the EU from third countries are subject to Import VAT, as well as customs clearance fees etc. irrespective of their value (prior to this date products under 22 euros were exempt).  

Where the goods have been sent to EU customers, for example a French individual has purchased a coat over the internet from a UK store, the fees would often need to be paid by the customer at the border before they could receive the goods from the courier.  This can make it a very expensive purchase and the fees are often unexpected by the customer, meaning a lot of packages are returned to suppliers.  This can add even further costs for the supplier.

IOSS platform from 1^st July 2021

In order to provide a much simpler process, the EU have launched a new Import One-Stop-Shop (IOSS) platform for these distance sales into the EU.  IOSS facilitates the collection, declaration and payment of VAT for sellers with a single monthly return, whilst making the process much easier for the end customer.

IOSS works by replacing the Import VAT usually due at the border, with supply VAT chargeable at the time the order is placed by the customer.  The supplier would charge VAT at the rate which is applicable in the customer’s country at the point of sale (or checkout). There should be no further payments due from the customer after this point.

The supplier then completes one monthly IOSS VAT return for all sales made to EU customers and makes a singular monthly payment for the VAT due.  They also need to provide all of the required information for customs clearance to the person declaring the goods at the border, including their IOSS VAT identification number. 

Non-EU suppliers will have to appoint an intermediary who is based in the country of the IOSS registration to act as a conduit between the supplier and the tax authority.  You can choose which country you would like to register for IOSS in.

The IOSS rules are optional and can only apply for goods under 150 euros which are not subject to excise duties, such as alcohol or tobacco.

Note, Northern Ireland is treated as part of the EU rules for IOSS purposes, and UK businesses selling low value goods to Northern Ireland can account for these goods on their IOSS return.  If you have registered for IOSS and are selling goods to Northern Ireland, you must tell HMRC your IOSS registration number.

Online marketplaces

There are separate rules if you sell your goods via an online marketplace, such as Amazon or eBay.  In these situations, the online marketplace will be the deemed supplier to the customer, and they will need to charge the VAT, and file and pay the monthly IOSS returns. 

Alternatives to IOSS

If the goods you are exporting do not qualify for the IOSS scheme, or you don’t want to register for IOSS, there are a number of options available to you.

Some of these options include keeping the current processes where your customers pay Import VAT and charges at the border, utilising your courier’s DDP services, such as the Post Office’s Postal Delivery Duties Paid service, or registering for VAT in the EU and holding stock overseas and selling via the EU’s One Stop Shop system.

How we can help:

• Look at whether IOSS would be beneficial
• Assisting with IOSS registration and returns
• General Brexit VAT advice

Written by: Justine Whyatt

Contact us if you would like further information regarding IOSS or how we can help. 

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk