Three reasons why every Indian seller should opt for IOSS while selling low-value shipments to the EU


  • The EU introduced IOSS on 1st July 21, making all the low-value shipments to the EU, those below €150, eligible for reporting and payment for tax. 
  • The benefits of IOSS are more than the initial hassle, and therefore Indian sellers selling abroad should make the most of selling with the help of IOSS. 
  • This blog shows the benefits of IOSS and what to consider while getting registered. 

The recent VAT reform brought about a change in the eligibility of VAT on goods and shipments received in the EU. Now all shipments below €150 will be eligible for payment of VAT. Those above €150 would attract duties, depending on other factors like country of origin. The non-EU sellers have the choice of opting for the IOSS (Import one-stop-shop) option introduced by the EU for shipments below €150. IOSS is simply a reporting model or an electronic portal that the non-EU sellers can use to report and pay VAT. For those who do not wish to opt for IOSS, it is not mandatory. A seller can still trade with the traditional DAP and DDP models. However, selling under the IOSS scheme is beneficial and here is why.

  1. One registration- Under the features of the IOSS scheme, what goes on number one is the requirement of only one registration. A non-EU seller can sell to one of the world’s largest trading blocs consisting of 27 states with only one registration.  
  2. Reduced cost of compliance- A non-EU seller can enjoy reduced costs because fewer number of registrations are required  under the scheme. IOSS also prevents loss of VAT, which used to happen in the case of the DDP model. In IOSS, a non-EU seller can reclaim VAT. 
  3. Customer satisfaction- If the seller is not registered under IOSS, the buyer must pay VAT and customs clearance fee charged by the transporter. These costs come as a surprise to the customers most of the time and the shipments are often rejected. In the IOSS model, however, the buyer is only charged once at the time of purchase. This model avoids the chances of sudden, surprise or hidden costs charged to the customer, resulting in a lesser number of rejected goods and happier customers. 

When can the IOSS model be used?

-When goods are dispatched or sold from outside of Europe at the time of sale. 

-When the total shipment value does not exceed €150. 

Indian sellers willing to sell low-value shipments to the EU require the help of an IOSS intermediary, like Avalara, to get registered under the scheme. The intermediary shares the responsibility of reporting and payment, along with the seller. If you are looking for ways of getting started with the IOSS scheme we can help you.

Know more about the three steps to IOSS here.

Avalara helps businesses of all sizes to take care of their tax compliance. We provide cloud-based support for GST, VAT and Sales Tax needs. Visit our website to find out more about the services we provide. 

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