Major changes to the EU's VAT Import One Stop Shop (IOSS) will take effect from 1 July 2021. Karen Robb looks at the new rules for UK to EU imports.

From 1 July 2021, items with a value of less than EUR 22 imported into the EU will no longer be exempt from VAT. Goods sent directly from Britain to consumers in the EU - whether sold directly or through an online marketplace - will be subject to VAT in the country of the customer.

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One-Stop-Shop: Changes to EU VAT rules on e-commerce Read our previous guidance

Current situation

(up to 30 June 2021)

New situation

(from 1 July 2021)

New situation with IOSS Registration

(from 1 July 2021)

Goods value up to EUR 22

  • No VAT
  • No customs clearance

Goods value up to EUR 150

  • Import VAT
  • Customs clearance and fee

Goods value up to EUR 150

  • Supplier registers for IOSS
  • Supplier charges VAT of customer’s country
  • Simplified customs declaration

Goods value EUR 22 to EUR 150

  • Import VAT paid by customer
  • Customs clearance and usually fee

Goods value over EUR 150

  • Import VAT paid by customer
  • Customs duties
  • Customs clearance
  • Customs clearance fee

What is the IOSS?

The Import One Stop Shop (IOSS) is a single VAT registration, in the EU country of your choice, through which you account for VAT on each sale at the rate of the country of the customer.

You submit monthly returns, showing the VAT for each EU member state. This allows you to calculate and charge VAT at the checkout.

How do I register for the IOSS?

You can either register and file your own tax returns, and find an intermediary to act for you.

If you need support filing tax returns for the One Stop Shop, get in touch →

Since Brexit, the EU has said that mutual co-operation on tax in the withdrawal agreement is no longer enough. This means that non-EU suppliers will have to appoint an intermediary who is based in the country of the IOSS registration to act as a conduit between the supplier and the tax authority.

Finding and appointing an intermediary may not be straightforward as it will have to guarantee the tax liabilities of the business.

What are the options for the One Stop Shop?

Selling through a marketplace

If you sell through a marketplace, they should have registered for the IOSS. If so, you will need to put their IOSS number on the label or instructions to your delivery company.

You can register for the IOSS, in the EU member state of your choice

You will have to appoint an intermediary to act on your behalf. You will then calculate and collect the VAT on each sale from your customer and pay it over on a monthly IOSS return. You will need to tell the Post Office, courier or carrier your IOSS registration number for each parcel.

For single consignments over EUR 150, what can I do?

You cannot use the IOSS for consignments valued above EUR 150.

The alternatives are:

  • To sell with import formalities and taxes being the responsibility of the purchaser

  • To utilise a carrier’s service, such as the Post Office’s Postal Delivery Duties Paid (PDDP), which allows you to calculate and collect an amount to cover VAT and customs duty from your customer at the checkout

  • To set up a stock holding in an EU member state, register for VAT and sell to customers with VAT at their local rate using One Stop Shop

What about Northern Ireland?

The situation since the UK left EU rules behind on 31 December 2020 has been complex and difficult for retail businesses selling to EU consumers. The new IOSS from 1 July 2021, will provide some simplification, and should improve the consumer experience, but the need to appoint an intermediary may add additional costs and administrative burden.

For businesses selling goods to the EU from a base in Northern Ireland, the rules are similar to those in place up to the end of 2020. Rather than having to register for “distance selling” according to each member state’s threshold, NI businesses making EU wide sales of more than EUR 10,000, will be able to register for the One Stop Shop (with no need for an intermediary) and account for local country VAT.

If you require further information or would like to discuss the new EU VAT rules in more detail, contact Karen Robb.

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