What sellers should know about EU IOSS intermediaries?
December 16, 2022
As of July 1, 2021, the new EU VAT regulations come into force. Affecting many businesses in the B2C e-commerce supply chain that sell to consumers in the EU, these reforms will affect EU and non-EU businesses in different ways.
What is IOSS?
Import One Stop Shop is the new electronic portal designed to simplify VAT compliance requirements for non-EU e-commerce traders and purported suppliers (i.e. market facilitators) selling low-value products in the EU. All 27 EU member states are participating in the IOSS scheme.
There is a trade-off for the accelerated clearance offered by IOSS: sellers using IOSS must collect VAT at the point of sale, not at the time of import into the EU.
The use of IOSS is voluntary, not mandatory. However, the benefits of IOSS will make it an attractive option for many retailers and B2C e-commerce marketplaces, as well as their customers.
Benefits for retailers of using IOSS
The main benefit of the IOSS scheme is that it provides companies with access to all 27 EU member states with a single registration.
Expedited customs clearance. The IOSS system will help avoid delays at customs because VAT is collected at the point of sale.
Simplified compliance for merchants. E-commerce sellers and marketplaces can use a single IOSS registration to report and pay VAT on all low-value shipments at €150.
Simplified logistics. Goods listed on the IOSS with the appropriate HS codes can move freely within the EU, so they can be imported into any member state and then transported to their final destination.
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