Import One Stop Shop (IOSS) for eCommerce

As of 1st July 2021 for B2C transactions supplied from outside the EU, the supplying company is now liable to pay any VAT due. They should charge the customer their local VAT and pay that via an agent registered in the EU. This VAT is paid via the Import One Stop Shop system. You can find more details about this from the EU or Royal Mail here:

https://www.royalmail.com/import-one-stop-shop-ioss

https://ec.europa.eu/taxation_customs/business/vat/ioss_en

What You Need To Know

When a customer places an order with a shop outside the EU that is being delivered to an address in the EU the shop should pay the EU VAT for that order. Some points on this:

• The IOSS scheme replaces the old €22 low value item limit - that no longer applies
• This applies to the shop if it is VAT registered in their home country or not - so if you aren't VAT registered in the UK you still need to pay the EU VAT
• The customer is to be charged the VAT that applies to the delivery address. If the shop is registerd in the UK, the billing address is the USA and the delivery address is Spain the shop must pay the VAT for Spain.
• IOSS can only be used on orders €150 or less - above that is a lot more complicated!
• The €150 limit is the net (before VAT) price of the goods - shipping charges are not included in this. The net price is based on the delivery country VAT rate
• If the order falls below the €150 limit even though Shipping isn't used towards the IOSS limit VAT is charged on the shipping.
• The order must have a completed CN22 and electronic customs data, these need to include the IOSS number of the company that has paid the VAT (this is not your EORI Number)
• If your company is registered outside the EU you must appoint a company to pay the VAT in the EU for you, it is this companies IOSS number your put on the order
• When shipping the order you do not need to include any documentation / invoices from the company paying the VAT ... just your own invoice is fine with the customs data
• If using an online marketplace (ie eBay, Amazon, Etsy, Not On the High Street etc) all the VAT payments and handling is done through them.
• At present, as far as I understand, if delivering via Royal Mail you must have an Online Business Account for Click & Drop to add the IOSS data. Franking customers cannot send using IOSS. I believe this is being added to the retail version of Click & Drop at some point soon.
• IOSS is optional, you do not have to use it or pay the VAT. But as time moves on and countries become more familiar with the systems orders may be delayed and customers may find themselves getting charged VAT and Handling Charges delaying the delivery and costing the customer more then they expected for their order.

Taxamo Assure

Taxamo Assure is a new service from Vertex, it allows you to make Pay As You Go IOSS VAT payments. They act as the company registered with the EU for paying your IOSS VAT charges.

You integrate the solution into your own shopping cart, when the customer places an order you pay Taxamo the VAT and then pay £2.00 per delivery. Most other companies charge fixed monthly rates + the VAT.