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IOSS - Changes to EU VAT from 1st July

From 1st July 2021, the €22 value added tax (VAT) exemption on goods imported to the EU will be removed.

This means:

  • ALL goods imported to the EU will be subject to VAT.
  • ALL shipments imported to the EU will require a formal Customs Declaration.

Please note that most shipments valued under €150 are not subject to Customs duties on arrival in the EU.

The Import One Stop Shop (IOSS) is an electronic portal that will facilitate the declaration and payment of VAT on imported goods. VAT for B2C shipments will be collected at point of purchase so customers can avoid the admin of paying a customs bill at point of delivery. VAT will be paid to EU Tax Authorities via a periodic VAT return. 

The IOSS will simplify the collection, declaration, and payment of VAT on online sales to EU customers. It covers the purchase of goods made by a buyer within the EU and for goods valued at less than 150.

Yes! It will help customers avoid unexpected charges and potentially reduce customs delays when goods are shipped. If you are not registered for IOSS, VAT must be collected from your customer when the goods arrive in the EU through the customs clearance process. This can be a slower and more costly process for your customer.

We would strongly advise that you do. 

Why? 

  • It will make for a much smoother flow for orders under 150.
  • It will reduce current customs surcharge costs as you will no longer have to send a shipment DDP / DT1 / DTP. 
  • Relevant taxes (no duty is applicable < 150), can then be remitted on a regular basis through an online portal by you/the retailer. 
  • You will only have to be registered in 1 country as opposed to the current distance selling regs. 

To be IOSS registered you will need to be either registered in an EU country or to have fiscal representation (learn more about fiscal representation here).

It is not a problem, but if you are not IOSS registered then you may be restricted as to carriers that you will be able to use. 

This is due to the fact that the goods must be cleared in the country of consumption if you are not IOSS registered.

Examples

As of 1st July:

  • Hermes will only clear into 2 EU countries 
  • DPD will only clear into 7 EU countries

This means for a non IOSS registered retailer you would only be able to ship to 2 countries via Hermes and 7 via DPD.

We can of course provide further options where we clear into all 27 countries using a limited number of carriers, but the costs will potentially be high and duties will need to be paid in advance by yourselves.

  • Do you plan to register for IOSS?
  • Will you be the Importer of Record on the commercial invoice? 
    • If so, is it an entity you hold within the destination, or an external representative.
  • Do you have any current VAT registry in the EU?
  • How do you intend to ship goods over 150.00?
  • Any other additional information you feel is necessary to tell us.

For more information on the IOSS, For more information on the IOSS, click here to download this document from the European Commission or visit their website.

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