What is Import One-Stop Shop (IOSS) Scheme?
On July 1, 2021, the European Union introduced the Import One-Stop Shop (IOSS) scheme to simplify the VAT payment process for e-commerce sales of goods imported into the EU worth €150 or less. The IOSS allows online retailers to charge, collect and remit the VAT due at the point of sale, rather than having it collected by customs upon import.
What is IOSS?
The IOSS scheme allows suppliers selling goods valued at €150 or less to EU consumers to collect the VAT due at the point of sale and declare it via a monthly IOSS VAT return filed in just one EU member state. This provides a more efficient "green channel" customs process.
Who needs to register for IOSS?
• EU-established businesses can register directly in their own member state
• Non-EU businesses are required to appoint an EU intermediary to register for IOSS
How does IOSS work?
1. At checkout, the seller displays the total sale price including the VAT amount due based on the delivery location.
2. The IOSS number is provided to the carrier for the shipment.
3. No import VAT is charged at customs clearance when the IOSS number is given.
4. A monthly IOSS VAT return is filed, and the VAT is paid to the tax authority where the seller is registered.
Benefits of Using IOSS
• Make selling EU-wide easier by registering in just one EU state
• Report and pay all import VAT in a single monthly IOSS return
• Charge the VAT due at the point of sale to the customer
• No import VAT collected by customs on IOSS shipments
What's the difference between OSS & IOSS?
OSS (One Stop Shop)
• Applies to cross-border supplies of services to non-taxable customers within the EU
• Allows businesses to report and pay VAT on these services through a single quarterly return in just one EU member state
IOSS (Import One Stop Shop)
• Applies to distance sales of low-value goods (intrinsic value up to €150) imported from outside the EU to customers in the EU
• Allows suppliers to collect, report and pay import VAT due on these sales through a monthly return in just one EU member state
• Provides a quicker customs clearance by paying VAT at the point of sale rather than upon importation
In summary, OSS is for cross-border services within the EU; IOSS is specifically for imports of low-value goods into the EU.
IOSS Eligibility Checklist
✔ The sale was made via your own e-commerce website (not a marketplace*)
✔ The shipment is going to a consumer (B2C), not a business (B2B)
✔ The goods are being shipped from outside the EU into the EU
✔ The total value of the shipment is €150 or under
✔ The goods being shipped are not subject to excise duties
*If the sale is made through an IOSS-registered online marketplace (e.g. Amazon, eBay, etc.), these platforms will do the work for you.
Want to get an IOSS number?
Not sure whether IOSS is the right solution for your e-commerce business? Contact VAT Ai today to learn more about our OSS&IOSS services.
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