The Complete Guide to The Import-One-Stop-Shop

The EU’s Import One-Stop-Shop, or IOSS, allows eCommerce sellers to register with just one of the 27 EU tax authorities and to submit one monthly IOSS VAT return in a way that allows the right payment of VAT across the other EU tax authorities where customers are based.

It was created to facilitate and simplify the declaration and payment of VAT for sellers making distance sales of imported goods to buyers in the EU, where the value of those goods does not exceed EUR 150.

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 at the moment the goods are imported into Europe.

Non-EU Sellers Using the Import One-Stop-Shop

Non-EU sellers (including those in the UK) will need to appoint an intermediary in order to register for IOSS.
Upon registration for IOSS, the tax authorities in the EU member state of registration will issue an IOSS VAT registration number.
Once registered for IOSS, the seller will show the price of the goods and the VAT amount due on the respective order when it is placed so that the customer can pay the total amount, including any VAT due, at the point of sale. The VAT rate applicable will be the VAT rate in the EU member state to which the goods are delivered.
The IOSS number should then be provided to Whistl in order to avoid VAT being charged at the point of importation.

IOSS returns are submitted monthly to the member state of registration for all goods supplied to final consumers across all EU member states. The VAT payment deadline is the end of the month following the month of reporting. For non-EU sellers registered through an intermediary, the relevant information may need to be provided to the intermediary to fulfil the obligations of filing the IOSS returns.

eCommerce VAT rules

eCommerce VAT rules refer to the set of EU rules governing the VAT treatment of the sale of eCommerce goods made to consumers in the EU. The rules were intended to create a ‘level playing field’ in terms of tax collection between local and non-resident sellers. In summary, they seek to:

Ensure that all goods sent directly from third countries (e.g. the UK) to final consumers (e.g. private individuals) in the EU are subject to VAT and that VAT is paid to the tax authority in the country where the private individual receiving the goods is resident.
Ensure that VAT is charged and paid by non-EU established sellers that sell goods to final consumers through online marketplaces and digital platforms.
Ensure that VAT is charged and paid by EU-established sellers that sell goods to final consumers through online marketplaces, digital platforms, and on their own account cross-border within the EU.

As noted above, these rules aim to collect tax from direct sellers and marketplaces efficiently.

EU changes that will apply to direct sellers.

The EU rules that apply to direct sellers can be summarised as follows:

All goods imported into the EU will be subject to VAT irrespective of their value.
The EUR 150 threshold for customs duty will remain, and goods above this value will be subject to VAT and duty.
The current VAT distance sales thresholds for EU-based sellers making sales to EU consumers are removed, and VAT is due in line with the destination principle. This is unless a seller’s overall B2C sales (i.e. sales to final consumers) to all EU member states fall below an annual threshold of EUR 10,000.
UK sellers will fall into the category of non-EU sellers and will be subject to the same rules as any other non-EU sellers.
In order to help facilitate and effectively manage the changes, the Import One Stop Shop (“IOSS”) will be introduced. Sellers who supply goods valued at up to EUR 150 can apply to use the IOSS scheme. This allows suppliers selling goods to consumers in the EU to collect VAT on sales of imported goods from the customer at the point of sale and to declare and pay VAT via the IOSS.

Download the VAT Checklist for eCommerce Sellers

Required fees for shipping goods in the EU

Goods/Total Basket Value Under €150	Goods/Total Basket Value Over €150
• VAT	• VAT
• Formal clearance	• Formal clearance
• Customs clearance fee	• Customs clearance fee
• IOSS can apply	• Customs duties
	• IOSS can NOT apply

Calculating the value of the good?

The value of the goods is also referred to as the intrinsic value. The value does NOT include the transport or insurance costs, but VAT is applicable on transport and insurance costs.

Receipt A	Receipt B	Receipt C
Value of good: €100	Value of good: €100	Value of good: €160
	Transport costs: €30	Transport costs: €30
	Insurance costs: €30
VAT (20%): €20	VAT (20%): €38	VAT (20%): €38
Total: €120	Total: €192	Total: €228
IOSS can apply, as the intrinsic value of the good is under €150.	IOSS can apply, as the intrinsic value of the good is under €150.	IOSS can NOT apply, as the intrinsic value of the good is over €150.
	The VAT rate is applied to the value of the goods PLUS the transport and insurance costs.	The VAT rate is applied to the value of the goods PLUS the transport and insurance costs.

Assisted IOSS VAT solutions for eCommerce sellers

What Is Taxamo Assure?

The Whistl Group has collaborated with Taxamo to offer our ‘assisted’ IOSS solutions, helping businesses continue to ship goods into Europe.

Taxamo Assure is a hassle-free ‘per parcel’ model where Taxamo (a Vertex company) becomes the VAT ‘deemed reseller’ when it facilitates the sale of your goods (valued at up to €150) into the EU through its electronic interface.

The interface focuses on critical aspects of the checkout process and formalities required to complete your online sales for £2 per parcel successfully. As a result, there is no need for you to register for IOSS or to file VAT IOSS returns. In addition, this solution will allow you to comply with the new VAT rules and ensure a smooth delivery experience for your customers.

Once you have integrated the Taxamo technology into your checkout process, it does everything for you, including creating the invoice and automatically calculating the VAT due in the country of destination. So you know what to charge to your customer at the checkout.

Who should use Taxamo?

This is a great hassle-free solution for smaller volume senders, particularly those who send fewer than 3,000 parcels a year to the EU, to avoid VAT management overheads - calculation, registration, filing and remittance. Taxamo streamlines the customer journey with seamless VAT compliance integration from checkout to delivery.

However, this may not be the right solution for everyone – we wouldn’t recommend Taxamo if:

You are sending a high volume of items (at a certain volume, it might become cheaper to register for IOSS and manage your own returns).
You already have the capability and expertise to independently register and file for IOSS.
You only sell to the EU through the marketplace(s).

The options for sending goods into Europe from the UK

There are a number of options available for eCommerce sellers sending parcels to the EU, including International Delivery Duty Paid (DDP), International Delivery Duty Unpaid (DDU), IOSS (self-registered or through a marketplace) and assisted IOSS. To help you understand which option best suits your business and parcel delivery volumes, we’ve compiled the summary below.

	Delivered Duties Unpaid (DDU)	IOSS - Sender Self-Registration	IOSS - Selling Via a Marketplace	Assisted IOSS Solutions	Delivered Duties Paid (DDP)
Overview	UK sellers do not ask their customer for tax. EU recipient is contacted in country and pays VAT owed before receiving item.	UK seller registers for VAT themselves, via an intermediary, collects VAT and completes monthly tax returns.	UK seller sells through a marketplace, so the marketplace takes on the responsibility for collecting and paying VAT on items with a value of EUR 150 or below.	UK seller uses trusted partners to: -Provide support in registering and completing tax returns -Completely take care of EU VAT compliance instead of the seller, to simplify the process for collecting and paying VAT on items with a value up to EUR 150.	Allows UK sellers to collect and pay VAT (and customs duty for items above EUR 150) on goods that would otherwise be paid by the customer before being able to receive their parcel.
Process involved	No action needed	Integrate a landed cost calculator or similar. Register for IOSS using a tax agent in one EU country to get an IOSS number. Register and get an IOSS number. Provide IOSS number to parcel carrier in pre-advice. Account for VAT and complete monthly returns.	Register to sell with a marketplace. Place your goods on their website. They may (but won’t necessarily) take care of VAT obligations (for products up to EUR 150).	Pay a fee to a third party to either: -Support you in registering and filing IOSS VAT returns for a fee -Take care of VAT at the point of sale and pay VAT obligations under the partner’s IOSS number.	Integrate a landed cost calculator. Register for DDP service and pay VAT/Duty on behalf of your EU customer upfront. The EU customer receives their product without interruption before delivery.
Benefits	Simple option that requires no change to current process. Can help you to ensure costs appear low at checkout.	Saves on third-party costs as it often uses in-house tax expertise or resources where available. Better customer experience.	Marketplace takes care of VAT (for products up to EUR 150) and IOSS number. Offers broader market access.	Better customer experience – either way the VAT due is paid up-front. Peace of mind if wanting to register yourself for IOSS. Simplifies the process of filing and registering for IOSS and helps with compliance.	Useful if you have small but irregular volumes of sales or goods over EUR 150. Maintains your customer experience.
Challenges	Unexpected costs for your EU recipient (VAT and handling fee). Customers can refuse to pay and item is returned which can be costly. Poor customer experience.	Specialist understanding and time is required to manage returns (handling enquiries with tax authorities, choosing where to register and file, deciding on an intermediary). Risk of issues when completing returns.	Reliance on the marketplace. Fees are taken from each sale (10% plus). Reduced control and brand recognition. Doesn’t cover products over EUR 150.	Requirement to provide the right data to complete VAT returns, unless ‘per parcel model’ is used. The ‘per parcel model’ might be more costly - you need to consider the volume of parcels you send and whether you have the systems and processes in place to be able to provide the right data for your own IOSS returns.	Need to increase prices to cover the cost of VAT and Duty. Can be cost ineffective for low value parcels or larger number of parcels. Can be difficult to obtain a VAT refund when goods are returned.

Choosing Whistl for Your IOSS Solutions

Looking for an easier way to ship parcels internationally? Whistl’s international shipping services, including management of your import one-stop-shop needs, come with a dedicated account manager to act as your single contact and a single-contract system for streamlined communication and reduced admin time.

We have worked extensively with clients looking to ship to Europe from the UK and vice versa. We have cultivated international partnerships to ensure your goods can be shipped and received seamlessly, with parcel tracking options available.

Make an Enquiry Today

Whistl Cross Border Solutions secures Transhipment MOU Licence

Frequently Asked Questions:

When did the rules change?

The rules took effect on the 1st of July 2021.

When will I get my IOSS number?

On the assumption you have provided all the information in a timely manner, and dependent on the tax authorities' processing times, we expect this to take 5-7 weeks from the time the registration application is submitted.

When can I start using my IOSS number?

Once it has been issued, you can start using your IOSS number.

What does the EUR 150 limit refer to?

Only goods shipped in a single package with a total price of up to EUR 150 would qualify for the IOSS. IOSS also excludes goods subject to excise duties (of any value). The EUR 150 refers to the price of the goods when sold to the EU. This excludes insurance and transport costs, unless these are already included in the price, and excludes other taxes and charges.

Do parcels sent using IOSS incur a handling charge?

No, parcels sent using IOSS should not incur a handling charge.

Can IOSS be used for B2B sales?

No, IOSS can only be used for B2C sales. Please note that you should obtain your customer's VAT number as evidence that they are a business customer (outside of the IOSS).

Do I need an intermediary?

As a non-EU seller, you will need an intermediary to use IOSS.

What is the return deadline for the IOSS return?

You must submit an IOSS return each month to the tax authority in the registration country. The return deadline is the end of the month after the reporting period.

How do I pay the tax due, and what is the payment deadline?

The deadline for these payments is the end of the month following the reporting month, the same as the return deadline. As you are established outside the EU, you are registered through a VAT intermediary. As instructed, you should make a monthly payment of VAT due as declared in the IOSS VAT return to the VAT intermediary at least a few working days before the payment deadline. The VAT intermediary will pay the tax authority in the member state of registration on your behalf.

I am from Northern Ireland (NI). Why is IOSS not relevant to me?

When an eCommerce seller in NI sells goods to consumers in the EU, NI is treated as being within the EU, and as such, the seller is not importing into the EU. A new single EU-wide distance selling threshold of £8,818 (10,000 EUR) was introduced for the sales of goods and services in the EU. The threshold will only apply to supplies of EU-located goods to and from Northern Ireland, which means that EU suppliers who exceed the threshold will have to register for VAT in the United Kingdom if they wish to sell goods to consumers in Northern Ireland. The provisions will also provide for a future One Stop Shop scheme (OSS Union scheme) to facilitate the collection of VAT on supplies of goods and digital services in the EU. The OSS Union scheme will be an optional alternative available to NI-established businesses, enabling them to register and account for the VAT on supplies of goods to customers through a single simplified system.

What rate of VAT will apply to my sales?

This will depend on the type of goods sold and the country where the customer lives. The EU's standard VAT rate ranges between 17% and 27%. However, a reduced rate may also be applicable for certain goods, ranging from 3% to 18% in the EU. You should seek specific advice on the VAT rate applicable to your sales if you are unsure of the correct rate to apply.

Where can I learn more about IOSS?