If you sell goods in any EU country, you may be required to register for Value Added Tax (VAT) and to collect VAT on your sales. For more information about The Value Added Tax (VAT) in the European Union, please visit this page.
What is changing?
Effective on July 1st 2021, the VAT exemption for the importation of goods into the EU, for shipments not exceeding €22, will be removed. This means that all goods imported into the EU will be subject to VAT.
As a result, online marketplaces will be responsible for charging and collecting VAT. The buyer will be charged for the VAT amount at the checkout page.
In the following table are outlined the main differences between the previous VAT regulation and the new one, which will be effective on July 1st 2021:
What is the Import One Stop Shop (IOSS)?
The IOSS allows online businesses and marketplaces selling imported goods to consumers in the EU: to collect, declare and pay the VAT to the tax authorities, instead of making the buyer pay the VAT at the moment the goods are delivered into the EU.
What goods are covered by the IOSS?
The IOSS covers the sale/import of goods from countries outside the European Union in the following scenarios:
- Dispatched or transported from outside of the European Union, at the time they are sold.
- Dispatched or transported in shipments where their value does not exceed €150.
- Any goods that are not subject to excise taxes.
How does the Import One Stop Shop work?
The Import One Stop Shop (IOSS) was created to simplify the declaration and payment of VAT for imported goods with a value not exceeding €150, and re-establish fair competition between European and third-country e-commerce retailers.
The VAT applied, will be the one at the rate applicable in the EU country where the goods are to be delivered.
For more information about the Import One-Stop Shop, click here.
What changes in Packlink PRO?
No action is required so far for our customers.
At the moment, on our website there isn't an option which allows you to provide the IOSS number to the carrier. Packlink is currently working to find the best solution for its customers. Until then, we strongly recommend you to list your shipping prices VAT excluded, as the buyer will pay the VAT amount on delivery. If you charge the VAT for the shipment at the moment of the payment, buyers may have to pay the VAT again on delivery.
My customer paid the VAT twice. What can I do?
If a buyer contacts you because they have paid the VAT twice, the best option would be to refund the VAT amount to them. You need to work out a separate refund to the customer, for the extra VAT payment. You can discuss with the buyer their preferred payment method to receive the payment. Please note that buyers will pay the VAT amount on delivery.
I already have an IOSS number. Can I use it to manage my shipments in Packlink PRO?
Packlink is working to implement this option in the near future. Until then, we strongly advise you to list your shipping prices with the VAT excluded, as the buyer will pay the VAT amount on delivery.
How do I register my business for IOSS?
Retailers who are currently shipping goods from anywhere in the world to customers across the EU, should now register to use IOSS to report all their EU sales.
For registration, according to where your business is located, you have two different options:
- If your business is within the EU, you have the choice of either registering for the Import One-Stop-Shop system directly or through an IOSS intermediary. Each EU Member State will have an online IOSS portal where businesses can register from April 1st 2021 and can be used for transactions made on after July 1st 2021.
- If your business is not established within the EU, but you want to access to IOSS solutions, you must register through an IOSS intermediary, which will perform services between the company and the IOSS.
Please note that businesses in the UK are considered outside of the EU, and they will need to get IOSS intermediary registration.
Is IOSS registration mandatory?
No, it is optional, and you can still sell services or goods to EU consumers without registering for IOSS or registering with an IOSS intermediary. However, if you do not provide your IOSS number for EU imports, buyers may have to pay the VAT again on delivery, on top of a customs clearance fee which is charged by the carrier.
Are there any exceptions?
Yes, some exceptions will apply. For example, you do not need to charge VAT on distance sales (imported to the European Union from third countries or third territories) for imported goods in the following circumstances:
- You sell several goods to the same buyer and these goods are shipped in a package amounting to more than EUR 150. These goods will be taxed at importation in the EU Member State;
- Your sales are facilitated by an electronic interface. In this situation, the electronic interface is responsible for the VAT due.