VAT Director Rayner Essex
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Brexit reality 6: One Stop Shop changes incoming

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The European Union recently released more detailed guidance on the incoming One Stop Shop changes in July 2021, with registration for these schemes opening on 1 April 2021. Jason Croke summarises the changes. 

7th Apr 2021
VAT Director Rayner Essex
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The EU has removed low value consignment relief from 1 July 2021, meaning all imports into the EU will be subject to import VAT. The EU wants to ensure EU consumers are not surprised by additional VAT and to encourage EU consumers to buy from EU VAT registered businesses, this is what the EU’s recently issued guidance on these changes is saying.

There are two main schemes. Import One Stop Shop (IOSS) covers sales of non-EU located goods from non-EU based sellers and One Stop Shop (OSS) which covers sales of goods located in EU at time of sale. In this article we will be looking at Import One Stop Shop.

The objective is for EU consumers to pay EU VAT at point of sale, goods delivered with nothing more to pay. IOSS only applies to non-EU sellers (so this means GB traders), for sales under £135/€150, this value being the threshold at which import duty is not applicable.

Once registered for IOSS, the GB seller charges the VAT rate local to the customer, so a German customer is charged German VAT and so on. A single IOSS VAT return is submitted and the tax office distributes the VAT to each member state.

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Replies (5)

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By ImNotSureBut
08th Apr 2021 08:07

Thank you for a good clear article.

Thanks (1)
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By edp
12th Apr 2021 21:43

Thanks for a clear explanation. However, if the UK business is not VAT registered because turnover is below VAT threshold, and only makes occasional EU sales, always less than 150Euros, is it better to leave EU VAT to be paid by the EU customer, adopt IOSS as a sales incentive, or does it not need to take any action due to not being VAT registered?

Thanks (0)
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By BJNATHAN
14th Apr 2021 09:14

A great I just have a couple of questions:-

1. Is the €150 check out limit a net or gross figure?
2. If the sale is over €150 is there a further option for the freight agent to pay the VAT on the goods when imported and recharge that back to the seller, this will be so that the received doesn't need to pay on receiving the goods?
3. Is there an option to make the IOSS returns quarterly?

Thanks (0)
By Democratus
14th Apr 2021 17:25

Jason - Thanks for this. As a business based in Northern Ireland and subject to the NI protocol for goods we effectively remain in the EU. The use of the IOSS would seem to be not applicable for sales to the EU from Northern Ireland. Would that be a reasonable assumption?

Thanks (0)
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By CDar
02nd Jul 2021 12:48

Hi, Thanks for the article.

Do you know if there is any provision for sending gifts?
We sell gifts, mostly to a UK customer base, but with many international recipients.
Ideally, the buyer would pay the necessary duties and taxes in the billing country, and not the recipient upon receiving the gift. However, we send the gifts on behalf of the purchaser, which makes me wonder how the gifts will get through to the destination country without someone having to pay taxes in that country again?

Thanks (0)