Posted by James Pearson on 19 Jul 2021
The Import One-Stop Shop (IOSS) for EU VAT
Under EU VAT rules applicable up until 1 July 2021, no import VAT had to be paid for commercial goods of a value up to €22. The new VAT e-commerce rules abolished this provision from 1 July 2021 and since that date, all commercial goods imported into the EU from the UK, are subject to VAT irrespective of their value. Registration with the IOSS may simplify the VAT position.
Normally a vendor exporting goods from the UK to the EU will zero-rate the sale for UK VAT purposes and the buyer must pay local import VAT, potentially creating an additional hidden cost for the buyer. From 1 July 2021, that is the case, regardless of the value of the goods.
Import One-Stop Shop (IOSS)
The Import One-Stop Shop (IOSS) allows suppliers and electronic interfaces selling imported goods to buyers in the EU to collect, declare and pay the VAT to the tax authorities, instead of making the buyer pay the VAT at the moment the goods are imported into the EU as was previously the case.
Thus, IOSS registration is not strictly necessary, but it allows the seller to simplify the process so that the purchaser doesn’t have to worry about import VAT, meaning the buyers know the VAT inclusive purchase price up front, rather than receiving a VAT ‘surprise’ upon receipt.
EU Member State IOSS Registration
From 1 April 2021, it has been possible to register businesses on the IOSS portal of any EU Member State. The single IOSS registration is then valid for all distance sales of imported goods to buyers in the EU. You can start using the IOSS only for the goods sold as from 1 July 2021.
UK and Non-EU Member State IOSS Registration
If businesses are not based in the EU (and UK-based businesses are no longer EU-based), they will normally need to appoint an EU-established intermediary to fulfil their VAT obligations under IOSS, unless they have an overseas branch that can register locally. Tax Innovations is also non-EU established, so cannot carry out IOSS registrations for your business.
UK businesses supplying goods to the EU will need to decide whether the administrative and cost burden of IOSS registration will outweigh the potential reduction in trade if buyers choose to go with suppliers who do not leave them to deal with the VAT on their imports.
More information on the IOSS can be found here.
If you would like any advice regarding the Import One-Stop Shop (IOSS) or would simply like to discuss other ways in which we could help you or your business, please contact us on 01962 856 990 or firstname.lastname@example.org.
- Personal Tax Relief For Residential Mortgages
- Big Changes For R&D Relief
- Non-Resident CGT – April 2019 Changes
- Main Residence Exemption – Update on Recent Court Cases
- Deemed UK Domicile Reforms 2017