Everything You Need to Know About the Import One Stop Shop (IOSS)
What is IOSS?
The Import One Stop Shop (IOSS) is a system created by the European Union to simplify the collection, declaration, and payment of VAT on low-value e-commerce imports into the EU. It was introduced as part of the EU VAT e-commerce 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 don’t have to register for VAT in each EU member state where they make 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. Businesses using IOSS must charge VAT at the point of sale and show the VAT amount they are charging to the customer. However, goods subject to excise duties are excluded from the IOSS, regardless of their value. 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 VAT at the border or at the time of importation. Additionally, using the IOSS can exempt businesses from import VAT, simplifying the process for both sellers and buyers.
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. Businesses are also required to submit a monthly IOSS VAT return, which streamlines the declaration and payment of VAT for sellers making distance sales of imported goods to EU buyers.
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.
Businesses in Northern Ireland should also register for the IOSS scheme to account for VAT on their sales into the EU. Additionally, sellers registered in the IOSS scheme are required to submit a monthly IOSS VAT return, specifying the VAT due, to a VAT intermediary before the payment deadline.
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 or have a VAT compliance specialist such as Taxually complete this process on your behalf.
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 the 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. You must submit a monthly IOSS VAT return as part of the EU's Import One-Stop-Shop (IOSS) scheme, which streamlines the declaration and payment of VAT for distance sales of imported goods. 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 registration for businesses in EU countries, allowing them to register for VAT in one EU member state and sell goods to customers in other EU countries without needing multiple VAT registrations.
- Faster customs clearance, as VAT is collected at the point of sale rather than at the border.
- Improved customer experience, as customers pay VAT at the time of purchase, avoiding unexpected charges upon delivery.
For businesses in Great Britain and Northern Ireland, the IOSS scheme also has implications for UK VAT. Specifically, businesses can charge UK VAT for sales from Northern Ireland to the EU if certain conditions are met.
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.
Frequently Asked Questions
What is the Import One Stop Shop (IOSS)?
The IOSS is an EU system to simplify VAT collection, declaration, and payment on low-value e-commerce imports into the EU.
How does the Import One Stop Shop (IOSS) work?
Businesses registered with IOSS collect VAT at the point of sale and submit monthly VAT returns through an online portal, streamlining VAT payment and customs clearance.
What is the process for IOSS registration?
Businesses need an EU VAT number and, if non-EU, an intermediary. Registration is completed via the IOSS portal, followed by monthly VAT returns.
What are the benefits of using the IOSS VAT scheme?
Benefits include simplified VAT registration, faster customs clearance, improved customer experience, reduced administrative burdens, and better EU VAT compliance.
Is IOSS registration mandatory for all businesses?
No, IOSS registration is optional but beneficial for managing VAT efficiently on low-value imports.
How does IOSS affect UK businesses post-Brexit?
UK businesses, including those in Northern Ireland, can use IOSS to manage VAT for EU sales, ensuring compliance and enhancing customer experience.
Can EU-based companies register directly for IOSS?
Yes, EU-based companies can register directly for IOSS without an intermediary through their home member state's portal.
How often must businesses submit VAT returns under IOSS?
Businesses must submit monthly VAT returns consolidating all sales to EU customers.
How can UK businesses obtain an IOSS number?
UK businesses can obtain an IOSS number in UK by registering through an EU member state and, if necessary, appointing an IOSS intermediary to handle compliance.
