Helping you get ready for the EU’s VAT ecommerce changes on 1 July 2021
Major changes with regards to the EU Value Added Tax (VAT) are coming to businesses selling goods to customers located in the EU. The changes will take effect on 1 July 2021. The EU’s Import One Stop Shop (IOSS) can help you start or continue trading from GB into the EU. We have three options to help you manage these changes - depending on the size and nature of your business.
As of 1 July 2021, items imported to the EU with a value of €22 or less will no longer be exempt from VAT. This means that all goods sent directly from GB to consumers in the EU, both via online marketplaces and sales made directly, will be subject to the local rate of VAT in your customer’s country.
Before 1 July 2021
Less than $22
No VAT
No customs clearance
More than $22, up to $150
VAT
Formal clearance
Customs clearance fee
More than $150
VAT
Customs duties
Formal clearance
Customs clearance fee
As of 1 July 2021
NEW – Up to €150
VAT
Formal clearance
Customs clearance fee
More than €150
VAT
Customs duties
Formal clearance
Customs clearance fee
How Can I Register for IOSS?
You can either register and file your own tax returns, or we can assist you to do so, via our new IOSS Registration and Filing Service. If you register yourself, all you need to do is input your IOSS number into the correct field, where requested, on the shipping platform you use.
If you don’t want to register yourself, we can help - we can provide an innovative solution, which is perfect if you simply want to concentrate on selling. See below for further details.
What Happens If I Don’t Act?
If you don’t have a solution in place by 1 July 2021, your items will be delivered by Delivered At Place/Delivery Duties Unpaid (DAP/DDU). Subsequently, customers may have to pay import VAT and a handling fee in the receiving country before they can receive their parcel from our delivery partner. Whatever the case, this could lead to delays, returns and a poor delivery experience. Some customers might refuse delivery, rather than pay these charges.
What Happens If I Don’t have An IOSS Number?
If you've applied for your IOSS reference number, but don't have it yet, SEKO can help. We are continuing to offer non-IOSS delivery after July 1st to all EU countries.
Three options to consider
In response to the 1 July 2021 changes, if you are a business who sells to customers in the EU, you have several options to consider.
Selling through a marketplace
If you sell through a marketplace, they are likely to have registered for IOSS. If so, you just need to assign their IOSS number in the pre-advice to us for the items sold through the marketplace.
The Import One Stop Shop (IOSS)
You can register for IOSS yourself or choose one of our ‘assisted’ IOSS solutions. You will then be able to calculate and collect VAT from your customer at the checkout and pay it directly to the EU. You just need to assign the right IOSS registration number to each item in the pre-advice you give to us.
B2B2C INTO EU
We help clients with consolidated shipments into the EU, managing B2B import clearance and onward B2C delivery. If you need help with EU VAT registration and with joining the EU's OSS scheme, get in touch.
So what’s best for you?
Whichever IOSS solution you choose, SEKO can despatch your items and ensure they get delivered across the EU without delay. Here are the different options at a glance to help you decide what best suits your business.
THE IMPORT ONE STOP SHOP (IOSS)
What is the EU’s Import One Stop Shop (IOSS)?
The EU’s Import One Stop Shop (IOSS) is a VAT registration scheme your business can use from 1 July 2021 to comply with the EU’s new VAT e-commerce rules on sales from GB to the EU. If you are despatching goods from Northern Ireland to EU you can use the One Stop Shop (OSS). Details are still being finalised but you will not need to provide a OSS registration number to us.
Once registered for IOSS in only one EU country, VAT can be collected at your online checkout and paid on all EU sales by submitting a single monthly EU VAT return. By using IOSS, our delivery partners will not charge import VAT or a handling fee.
You can find out more information about these changes, published by the European Commission, here and further guidance provided by the UK Government here.
WHAT ARE SEKO'S IOSS SOLUTIONS?
REGISTER AND FILE YOUR OWN EU VAT RETURNS
REGISTER YOURSELF FOR IOSS
Once registered all you need to do is input your IOSS number into the correct field, when requested, on the shipping platform you use. Alternatively, you could consider one of our ‘assisted’ options.
OR USE ONE OF OUR ‘ASSISTED’ IOSS OPTIONS
CALCULATE THE LANDED COST OF YOUR GOODS WITH AURA FROM HURRICANE
If you register yourself for IOSS, or register via another IOSS Registration and Filing service, you will need to calculate the landed costs of your goods. You can do this by using Aura from Hurricane. This service calculates all import Duty and Tax chargeable at the checkout. It also provides a Prohibited & Restricted Goods check, Denied Parties check and HS code look-up all in one API call.
Frequently asked questions about IOSS
The chances are that you will have questions about these changes and the options open to you. Take a look at the FAQs and their answers to help you find the right solution for you and your business.
Please note: If you are despatching goods from Northern Ireland to the EU, IOSS cannot be used to declare and pay VAT on your EU sales. Instead, you can make use of the One Stop Shop (‘OSS’) which is another EU VAT scheme that allows you to declare and pay VAT on all sales into the EU in one single VAT return (alternatively, you can register for and pay VAT in each member state you are selling goods to). If your overall annual sales from NI to consumers in all EU countries doesn’t exceed €10,000 you can continue to charge UK VAT to your EU customers.
From 1 July 2021. Registration has been available since 1 April 2021.
No, you can opt to use SEKO's non-IOSS DDP services, or DAP/DDU services, if you don’t want to use IOSS.
IOSS is a solution to manage VAT payment. Items over €150 attract customs duties as well as VAT and these are not covered by IOSS. Customers need to send items of this value and over via DAP/DDU or non-IOSS DDP services.
IOSS also does not cover Excise Goods – these are usually things like alcohol and cigarettes. These items, where not restricted, should be sent via other appropriate services which allow them.
If you are registering your business for IOSS yourself
- Resister for IOSS in one of the EU countries (member states). Customers choose which country
- You will need to use an intermediary service based in the EU to do this
- Display the amount of VAT to be paid by the EU buyer when the ordering process is finalised
- Collect VAT from the EU buyer on eligible destined for an EU country
- Use IOSS for items with a value not exceeding €150
- Submit electronic monthly VAT return 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
- Keep records of all eligible IOSS sales for 10 year
- Provide the IOSS number for customs clearance to SEKO as part of electronic pre-advice.
If you don’t want to register yourself independently for IOSS and would like some help
If you would prefer to concentrate on selling items, we have excellent options available for customers, where you can use one of our trusted partner solutions.
It can vary but we’d recommend allowing at least four weeks.
Our client focus
Everything we do is designed to make our customers' lives easier - helping them to develop and maintain excellent relationships with their own customers.
Let us know what business challenges you are facing and we'll see what we can do to help. We look forward to hearing from you, and thank you for making contact.
To find out more, fill in the form, email ukenquiries@sekologistics.com, or give us a call.