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EU businesses can use IOSS portal from Jul 1 for VAT e-com obligations

01 Jul '21

2 min read

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Businesses in the European Union (EU) can use the Import One-Stop Shop (IOSS) electronic portal from July 1 to comply with their value-added tax (VAT) e-commerce obligations on distance sales of imported goods. The earlier VAT rules, under which no import VAT was required for commercial goods of value up to €22, will come to an end from today.

So beginning today, all commercial goods imported into the EU from a third country or third territory will be subject to VAT irrespective of their value.

The IOSS allows suppliers and electronic interfaces selling imported goods to buyers 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 imported into the EU as it was previously the case (for products over €22).

The IOSS facilitates the collection, declaration and payment of VAT for sellers that are making distance sales of imported goods to buyers in the EU. The IOSS also makes the process easier for the buyer, who is only charged at the time of purchase, and therefore, does not face any surprise fees when the goods are delivered, the EU said on its website.

If the seller is not registered in the IOSS, the buyer has to pay the VAT and usually a customs clearance fee charged by the transporter.

Businesses have been allowed to register on the IOSS portal of any EU member state from April 1 this year. If businesses are not based in the EU, they will normally need to appoint an EU-established intermediary to fulfil their VAT obligations under IOSS.

Fibre2Fashion News Desk (DS)

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