Everything You Need to Know About the Import One Stop Shop (IOSS)
What is IOSS?
So, what does IOSS mean? The Import One Stop Shop (IOSS) is a system created by the European Union to simplify the collection, declaration, and payment of value added tax (VAT) on low-value ecommerce imports into the EU. It was introduced as part of the EU VAT ecommerce package, which came into effect on July 1st, 2021.
Under the IOSS system, a business selling imported goods to customers in the EU can register for IOSS in one EU Member State and then declare and pay the VAT due on all sales within the EU through a single VAT return. This means that businesses, whether they sell independently or via an online marketplace, don’t have to register for VAT in every one of the EU countries where they make distance sales, which can save time and money.
For goods with a value not exceeding €150, the Import One Stop Shop allows the seller to collect the VAT from the customer at the point of sale, instead of the customer having to pay the VAT upon importation. This can result in faster customs clearance and delivery times for the customer, as well as simplifying the customs process.
While IOSS registration is optional for businesses, those choosing not to use the IOSS VAT system will still be subject to the same VAT rules requiring them to collect VAT upon importation for goods with a value not exceeding €150.
How does the Import One Stop Shop work?
The Import One Stop Shop portal is an online platform that facilitates and streamlines the payment, collection, and declaration of VAT on sales of goods imported from outside the EU to customers within the EU. Once registered, businesses can charge and collect the VAT due on their sales at the time of sale, instead of having to pay import VAT at the border or at the time of importation.
With the IOSS VAT scheme, businesses are able to declare and pay the VAT due on their goods through a single registration and payment process, and the tax authority of the Member State of identification (where the business is registered) will then distribute the payable VAT to the relevant Member States.
What is the process of IOSS registration?
Once you’ve registered for the IOSS scheme, you’ll be able to declare, collect, and pay VAT on the sale of goods to customers located in the EU. The IOSS registration process is as follows:
Obtain an EU VAT number
If you don’t already have one, you’ll need to get an EU VAT number by registering for VAT in one of the EU Member States. You can do this by contacting the tax authority in the relevant EU country.
Choose an IOSS intermediary
If you’re not established in the EU, you’ll be required to appoint an intermediary to act on your behalf in the IOSS system. The intermediary will be responsible for completing your IOSS registration, submitting VAT returns, and paying VAT. EU-based companies don’t need an intermediary and can register directly for the IOSS VAT scheme in their own Member State.
Complete IOSS registration
Once you have an EU VAT number and have chosen an IOSS intermediary (if necessary), you can register for the IOSS scheme through the Import One Stop Shop portal of the relevant Member State and receive your IOSS number. You’ll need to provide your business details, VAT number, and information about your IOSS intermediary.
Submit VAT returns and pay VAT
Once your IOSS registration has been completed, you’ll then be required to submit VAT returns and pay the VAT due on your sales to customers located in the EU. Your IOSS intermediary will handle this on your behalf.
What are the benefits of the IOSS VAT scheme?
There are several benefits to using the IOSS VAT scheme. These include:
Simplified VAT compliance
The Import One Stop Shop allows businesses to register for VAT in a single EU Member State and collect and remit VAT on all sales made to customers in the EU. This eliminates the need for businesses to register for VAT in multiple countries, reducing the administrative burden and costs associated with VAT compliance.
Reduced customs delays
Because with IOSS businesses pay VAT upfront at the time of sale, they can avoid customs delays and potential additional charges at the point of importation, improving the speed and efficiency of cross-border trade.
Improved customer experience
The IOSS VAT scheme enables businesses to provide their customers with a more transparent and predictable pricing structure, as the VAT is included in the sale price. This can help to build trust and improve the overall customer experience.
Compliance with EU VAT rules
Registering for the Import One Stop Shop ensures that businesses comply with EU VAT rules when selling goods and services to customers in the EU, reducing the risk of fines and penalties for non-compliance.
The Import One Stop Shop with Taxually
At Taxually, we can take care of the IOSS registration process for you, apply for your IOSS number, file your IOSS returns, and make the VAT payment due.
To find out more about VAT obligations, book a free call with one of our VAT experts. We offer bespoke solutions for your business, can optimize your VAT costs, and help you reach millions of new potential customers.