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Importing goods into the EU?
Prepare your business for the latest in VAT rules in 2022

Since the 1st of July 2021, the EU updated its VAT system for goods imported from outside the EU. The idea was to simplify and standardise the taxation of cross border supplies of goods and services.

During our overview we will walk you through what this means to UK ecommerce businesses and marketplaces exporting to the EU.

Our VAT obligation matrix

You’re a seller established in the EU

Goods EU Origin (inside EU)
Liable for VAT on sale Seller Seller
One-Stop-Shop OSS seller OSS seller
Imported Goods (outside EU)
Liable for VAT on sale
Packages <150€ Seller Seller
Packages >150€ Seller OSS seller
One-Stop-Shop - -
Packages <150€ IOSS seller IOSS marketplace
Packages >150€ No No

What is IOSS?

Known as the Import One-Stop-Shop [IOSS]. This was developed to make the declaration and payment of VAT for distance sales of imported items having a value of less than EUR €150 easier and more convenient for shippers.

What are the latest IOSS VAT rules?

The new rules are intended to combat fraud and to provide a fairer and more transparent tax system.

Before 1st July 2021, all commercial goods imported into the EU faced no VAT if they were valued under €22. However, this has now changed.

Since the 1st of July 2021, the €22 low-value limit has been removed which means all commercial goods valued from €0 will be subject to VAT. The rate of VAT varies depending on the EU country the customer resides in. For commercial goods valued above €150 customers are still obliged to pay customs duties upon importation into the EU.

Import One-Stop Shop (IOSS)

To ensure a smooth transition to the new VAT system, the EU has created the Import One-Stop Shop (IOSS). The IOSS is the electronic portal businesses can use from the 1st of July 2021 to comply with their VAT ecommerce obligations on importing commercial goods from outside the EU.

IOSS can only be used if:

  • You are an online seller, online marketplace, platform or similar
  • The value of the imported goods are below €150
  • The imported goods are dispatched from outside the EU at the time of sale
  • The imported goods are not subject to excise duties (alcohol, tobacco and energy)

Why use IOSS?

The IOSS saves you and your customers headaches by providing standardised and simplified VAT solutions. You can offer your customers a transparent and hassle-free shopping experience by taking care of all the VAT declarations and payments for cross-border transactions.

What does it mean in real terms?

One of your customers in the Netherlands ordered a €50 pair of trainers, the following two scenarios would unfold:

Effective since the 1st of July 2021, trainers are now subject to a 21% VAT surcharge (€10.50) and a customs clearance fee ranging from €5 to €15. (VAT rates and customs fees vary depending on the destination country.) As a result, the customer will pay anywhere between €65.50 and €75.50.

If you are an IOSS supplier, the same pair of trainers will not be subject to the customs clearance fee, meaning they will only pay the VAT surcharge. This will result in a saving for your customer of between €5 - €15.

The benefits for you as a retailer

  • Centralised customs clearance fee
  • After the 1st of July 2021, there will no longer be a central clearance option for non-IOSS sellers. The VAT rate is the one applicable in the customer’s EU member state.
  • Reduced administrative overheads
  • Once your business is registered as an IOSS seller in one EU member state, you can use this registration to do business in the entire EU. The VAT return and payment is due in the country of registration.
  • Reduced customs clearance times
  • Goods imported by an IOSS seller will only be checked for a valid IOSS number before being dispatched to the customer. Goods sold through unregistered businesses can only be cleared after VAT has been collected.
  • Specific VAT rates
  • VAT under IOSS is calculated at the specific VAT rate for that product as opposed to a generic VAT rate for the country - certain products will attract a lower VAT rate based on the HS code – outside of IOSS the generic vat rate will be applied.

​The benefits for your customers

  • No additional taxes and customs fees
  • Customers avoid paying additional taxes and customs fees and will greatly appreciate this transparency. As a result, IOSS webshops can advertise products at the total price (including VAT).
  • Hassle-free transactions
  • For IOSS transactions, customers will not have to go through another procedure to pay the VAT or customs clearance fees when their goods enter the EU.
  • Faster delivery
  • IOSS-registered goods will speed through customs thanks to the standardised system. Customers who shop through a non-registered supplier will lose a lot of time trying to get their shipments past the border.

Helping you prepare

Not based in the EU? First appoint an EU-established intermediary

If your business is not based in the EU but you still want to enjoy the IOSS benefits, you will be required to appoint an intermediary (a taxable person based in the EU to act on your behalf). The intermediary fulfils your VAT obligations on your behalf using a specific VAT identification number for your business transactions. They will file a monthly VAT return and pay the corresponding amount to the tax authorities of the member state they are based in.

Register your business today

You can register your business on the IOSS portal of any EU member state. Select the IOSS portal for the EU member state of your choice and follow the registration process. Some contact details are available online.

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