IOSS: Import-One-Stop-Shop

 

Major changes to EU Value Added Tax (VAT) came into effect on July 1st 2021. Your business can now use Import-One-Stop-Shop (IOSS) to help you continue trading easily with the EU from the UK.

If this is news to you, don't worry! Parcel2Go is here to help you every step of the way.

What is IOSS & Why Should I Use it?

IOSS is an online VAT registration scheme that UK businesses can use to comply with the EU's new VAT requirements on goods sold to EU customers and valued up to £135/€150.

IOSS will save your business and its EU customers time and effort by meeting VAT requirements at the point of sale, rather than the point of import / prior to delivery.

Who Should Use IOSS?

If your business sells goods to EU customers worth less than £135/€150, IOSS is a great option. With VAT requirements taken care of at the point of sale, all your customers have to do is wait for their parcel to be delivered!

If your business only sells on a marketplace (think Ebay or Amazon!), you don’t need to use IOSS directly. The marketplace is responsible for collecting and paying EU VAT charges, not you!

In this scenario, your marketplace will give you an IOSS number.

  • If you use Smart Send, the IOSS number will be automatically passed to Parcel2Go
  • If you use Parcel2Go’s standard booking process, you simply add your IOSS number when entering the parcel details.

Do I Have to Sign Up to IOSS?

You aren't required to sign up, but bear in mind... IOSS makes it much easier for UK businesses selling goods to EU customers.

Our Top Tips:

If your business sells items worth up to £135/€150 to EU customers, IOSS will simplify the payment of VAT for you!

I Still Don't Want to Sign Up!

If IOSS isn't for you, EU VAT can be paid in a different way. You have two options:

Option 1 - Delivery Duty Paid
Selling to the EU
Your business pays local VAT before shipping. This can be done within the order journey on Parcel2Go.com. This process is known as Delivery Duty Paid (DDP), and is in operation as of July 1st 2021.
Option 2 - Delivery Duty Unpaid
Selling to the EU
The customer pays local VAT before customs releases the goods for delivery. This is known as Delivery Duty Unpaid (DDU).

Our Top Tips:

If you intend to sign up for IOSS, but don't act or have a solution in place from July 1st 2021, your goods will be delivered by DDU by default.

What About Goods Worth Over £135/€150?

IOSS doesn't apply to goods worth over £135/€150.

In this scenario, your choice for paying EU VAT is between DDP & DDU. (See Options 1 & 2 above)

How Do I Register for IOSS?

Businesses based in the UK need to appoint an EU-resident intermediary, like a tax agent, to register for them. An intermediary will then perform the following actions on their behalf:

  1. Submit monthly IOSS VAT returns that contain the total value of the goods sold, their VAT rate and the total VAT amount to be paid, broken down by standard and reduced rate and for each EU country where the goods are transported to.
  2. Make a monthly payment of the VAT due as declared in the IOSS VAT return.

Once registered for IOSS, You Can:

  • Display the amount of VAT your EU customers need to pay at the end of the order process.
  • Collect VAT from EU customers on goods bound for an EU country.
  • Provide the IOSS number for customs clearance to Parcel2Go as part of the order process.
  • Submit electronic monthly VAT returns via the IOSS portal of the country where you are registered for IOSS and make a monthly payment of the VAT declared to that country.

 

How is IOSS VAT Calculated?

IOSS VAT is calculated using this simple formula:

Value of Item + Shipping Cost x VAT Rate of Destination Country

You can find VAT Rates for all EU Member States here.


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