EU company selling via a marketplace from Non-EU to EU below EUR 150
Based on the nature of the transactions, the responsibilities are the following
The seller based in the EU is selling goods through the marketplace. The goods are shipped from a Non-EU country to an EU country and their value is below EUR 150.
For VAT purposes the marketplace qualifies as a “deemed supplier” for this transaction, regarded as if he is purchasing the goods from the seller and then selling them to consumers. The seller performs zero-rated supply to the marketplace (B2B), who in turn sells goods to the final customer (B2C). For this transaction the marketplace can use the Import One Stop Shop (IOSS) scheme to simplify its tax obligations.
If IOSS is used, the marketplace will charge local VAT at the checkout and then report and pay VAT to tax authorities via its IOSS return covering all EU countries. If the marketplace is based in the EU it should register for IOSS in the country of its establishment. The IOSS returns can be used only for sales of goods from third countries to the EU with a value below EUR 150 and any other transactions should be included in standard VAT returns. If IOSS is not used, the transaction will be treated as as an import of goods and import VAT will be paid by the marketplace or the customer depending on agreed terms of sale.
*While our tutorial brings clarity to complex rules, it is not tax advice. There are many exceptions to these rules and the legislation is constantly changing therefore always speak with your trusted tax expert. If you need practical assistance with your VAT obligations we will be happy to help you.