Updated: Aug 25
New solution for UK eCommerce sellers
As of 1 July 2021, non-EU distance sellers can benefit from a new EU regulation called Import One-Stop Shop (I-OSS). This is great news for all UK online shops, whose businesses suffer from EU trade barriers.
Short facts - the I-OSS allows for:
sales up to EUR 150 of net value (ie, selling price without VAT, duty, packaging, shipping etc.)
B2C sales only
importing to all 27 EU countries via a single I-OSS number
a simplified single monthly VAT declaration for sales to all 27 EU countries
a simplified single monthly VAT payment for all EU sales
For many eCommerce traders with a customer base in the EU the post-Brexit trade hurdles mean vastly inflated costs and paperwork for cross-border sales – also for their customers, so on arrival many deliveries from the UK are rejected by consumers in the EU.
As a result, many smaller UK distance selling businesses are simply not viable anymore. However, the new I-OSS scheme has the potential to change this.
Step-by-step guide to I-OSS
1. UK distance sellers need to appoint an I-OSS Intermediary in any of the 27 EU member states, who registers them with an EU tax office and obtains the single EU I-OSS number for them.
2. Once set up all shipments with imported goods valued up to €150 are exempt from import levies in the country of import. VAT due in the country of destination is paid by the consumers and collected at the point of sale.
3. The seller submits a list of all monthly sales (please note: the Low Value Consignment Relief of up to EUR 22 was abolished with the introduction of the I-OSS) and customs declarations to their I-OSS Intermediary. This will be reported and paid to the local tax office in the country where I-OSS is registered.
That’s all! So, to conclude, we do not only have an extremely simple scheme, but also one that is far more affordable than the three alternative solutions for a set-up in the EU: VAT-registration, Fiscal Representation, or company formation.
Sellers using online marketplaces (such as Amazon) as fulfilment providers should contact them regarding possible services. Potentially they should be able to use the marketplace’s EU I-OSS VAT number.
However, the use might be limited to sales from this marketplace, so an I-OSS registration would still be needed for sales from their own web shops and other platforms.
What is OSS?
Without going too much into detail, the OSS (which was also introduced on 1st July and replaces the MOSS regulation) is a similar scheme, except destined for distance sellers who keep stock in the EU.
In other words, traders who keep stock in England, Scotland and Wales can use the I-OSS – traders who keep stock in Northern Ireland (which, for goods trade, is aligned with the EU via the Northern Ireland Protocol) can use the OSS.
New VAT threshold?
Previously, every EU country set its own threshold for distance sales. As of 1. July 2021 this has been reduced to EUR 10.000 for EU-wide sales.
However, this only affects EU-based sellers, who use the OSS. For non-EU based sellers using the I-OSS the threshold was abolished completely, ie, they need to pay VAT on all sales.
Easy to set up
Once you have decided on the EU country you would like to use for your I-OSS registration you would need to find a partner, who offers I-OSS Intermediary services. The set-up process might vary from country to country (or even from provider to provider).
However, for the Netherlands we can safely say you merely need to submit a Power of Attorney and your company data to get started. The Dutch authorities are currently quoting a seven working day turn-around for the registration.
Need help? Get in touch with us, we provide full I-OSS- compliance services.
Trade with Europe Ltd provides one-stop solutions for UK businesses to export and grow European markets. Circumvent trade barriers and manage your EU trade from the UK with only minimal disruption to your everyday business.