Import One-Stop Shop (IOSS) frequently asked questions
EU VAT reforms keeping you up at night?
Get the answers to the ten most popular
questions about IOSS.
Following the changes to the EU VAT obligations on 1 July 2021 and the introduction of IOSS – we have collected the answers to the ten most frequently asked questions we received from our customers.
Understand your obligations as an online seller, your VAT liability and the steps you need to take.
Yes, as of 1 July 2021 the EU ended its low-value consignment relief threshold of €22, which means all products going into the EU will attract VAT for either the buyer or the seller.
The Import One-Stop Shop (IOSS) is a simplified reporting model where you register in one location for the sales you make to EU consumers in the 27 EU member states, where the consignment value of the goods shipment is below €150. This creates a more efficient ‘Green Channel’, with quick and easy customs clearance.
You are required to display the amount of VAT paid by the buyer in the EU, by the time the ordering process is finalised (at the latest). You will need to produce an invoice showing the price paid by the buyer in EUR, this will need to be provided alongside your IOSS number during the customs declaration process. This allows the import VAT to be exempt when the goods pass through customs. You then report the VAT you collected at point of sale in the new monthly IOSS returns.
VAT is now due on all goods shipped into the EU but once the value of goods are above €150 there could also be duties that would be applicable on top of the VAT. There are many things, like the origin of goods, that could affect whether duty is required to be paid.
This will depend on the country you are applying with and whether you are using an intermediary. Avalara is currently obtaining numbers through its intermediary within a week from when the completed documentation is submitted. However tax office demand is increasing so we expect there could be delays in the future.
Your IOSS number cannot be backdated and applied to shipments you have already made.
If you only make sales through marketplaces then you will not be required to have your own IOSS number because it is now the marketplace’s responsibility to report the transaction to the end consumer. You will make an exempt sale to the marketplace and they will report the VAT.
Many marketplaces are following the IOSS approach, if they choose this approach they will provide you with their IOSS number and produce the invoices you need to provide to your carrier to ship the goods.
No, IOSS is a simplified process that allows you to ship to all 27 EU member states through one singular registration. You can still continue to ship through the old DAP and DDP models (see next question) but if you choose to use IOSS then all transactions must be reported under IOSS going forward, there is no pick and mix.
7. Are businesses required to charge VAT when goods are sold from non-EU locations directly to consumers?
The answer is it depends on the model you are planning to use. There are currently two popular models but with the introduction of IOSS there is now a third.
Delivery At Place - You are not required to charge VAT to the customer as this will be borne by the customer before they are allowed to receive the goods.
Delivery Duty Paid (DDP) - Businesses usually charge but it’s not mandated to show the customer the charges when following this model
Import One-Stop Shop (IOSS) - Businesses must charge and show the VAT amount they are charging to the customer
Unfortunately IOSS does not cover the shipment of these goods so you will be required to use one of the previous models like DAP or DDP.
Intermediaries such as Avalara are responsible for the compliant filing and payment of the VAT under this scheme. The intermediary is jointly and severally liable with the business registering for IOSS. The intermediary is required to pay the tax office on the business’ behalf.
An intermediary must be appointed when a business is established outside of the EU. All EU businesses are not mandated to appoint one due to the mutual assistance agreement, Norway is the only non-EU country with an exemption from appointing an intermediary.
Yes, each country has a slightly different method on how these need to be reported but you can report this much the same as a usual return of goods on your IOSS returns.
Find out more about becoming IOSS compliant in three easy steps with Avalara.
Avalara's IOSS solution
As part of the EU's VAT reforms, businesses can now sell into all 27 EU member states with just one VAT return.
Start taking advantage of the EU's Import One-Stop Shop (IOSS) with a complete, end-to-end solution from Avalara.