What is the IOSS (Import One-Stop Shop) EU VAT Scheme and who needs to use it?
The IOSS scheme was set up to improve delivery speed, reduce customs burdens and increase EU consumer confidence in ordering goods up to the value of 150 EUR from overseas sellers. The IOSS scheme enables UK and non-EU sellers to account for and collect the EU buyers import VAT at the point of sale, rather than have the friction of a customs broker or courier raising the recipient to collect it during or after delivery of the goods.
When IOSS is used, the consumer receiving the goods will get their items faster and they won't have any surprise customs fees to pay (subject to country of origin and the free trade agreements in place). This also means that less orders will be refused and returned due to non-payment of duties and taxes, which is a very costly exercise for the original exporter.
Although registration onto the IOSS scheme is optional, online marketplaces (OMPs) like eBay and Amazon have been forced to join. They will collect the appropriate amount of EU buyers import VAT (which is based on the buyers country) at the point of sale and notify the seller of their marketplace IOSS registration number (this number must be included on export paperwork to ensure the receiver is not billed VAT again on import when the goods are presented to customs).
Here are some important facts about the IOSS
- Registration onto the IOSS scheme is optional unless you are an online marketplace (OMP)
- From July 1st 2021, all commercial goods imported into the EU will be subject to VAT
- IOSS is only available for B2C (business to consumer) transactions.
- IOSS can only be used for transactions with goods up to a total value of 150 EUR
- Goods sent without an IOSS or exceeding 150 EUR can still be exported using existing methods of VAT collection
You'll be glad to know that Parcelbroker's systems have already been updated to cater for these new processes and can walk you through creation of customs documents whether you're registered for IOSS or not.