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VAT - Import One Stop Shop

The use of the Import One Stop Shop allows import VAT to be paid at the point of supply rather than at the point of importation. Here we explain what it can be used for and what information you will need to provide.

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Contents

  1. Introduction
  2. How do I operate the IOSS?
  3. What detail is needed on an IOSS return? 
  4. What are the benefits of using the IOSS?
  5. What does the IOSS mean for businesses in GB selling into Northern Ireland?
  6. When would I need to use an IOSS intermediary?
  7. Further information.

Introduction

VAT is charged in all imports in the EU regardless of their value. The use of the Import One Stop Shop (IOSS) allows import VAT to paid at the point of supply rather at the point of importation.

The IOSS can be used to declare, and pay, the import VAT where:

  • The goods in question are located in a 3rd country or 3rd territory (i.e., country outside the EU/NI) at the time they are sold.
  • The goods are dispatched in consignments of an intrinsic value not exceeding €150/ £135.
  • The goods in question are not subject to excise duties.

Note: If neither the IOSS nor the Special Arrangements for declaration and payment of import VAT are used, then VAT will be payable on importation.

How do I operate the IOSS?

  1. Registration: Seller registers for IOSS and obtains EU VAT IOSS number
  2. EU import: IOSS goods are VAT exempt if a valid IOSS VAT identification number is declared for importation with EU customs.
  3. Charge VAT at point of sale: Seller charges EU VAT to the customer upon sale
  4. Declare and pay VAT: Seller declares and pays VAT to the EU tax authorities where the company is registered for IOSS.

What detail is needed on an IOSS return? 

VAT falling within the scope of the IOSS scheme must be declared and paid via a monthly IOSS return which must be submitted in the Member State where the taxpayer has registered for the IOSS. One monthly IOSS VAT return is required and one corresponding payment.

The IOSS VAT return will need to include the following detailed information:

a) The total value of the goods sold
b) The corresponding VAT rate applicable to each sale
c) The total amount of VAT to be paid broken down by Member State of consumption.

The return must be submitted electronically by the end of the month following the end of the tax period covered by the return. The IOSS VAT return must be made whether or not any supplies have been made during the month.

Records of all transactions covered by the IOSS must be retained for a period of 10 years from the end of the year in which the transaction was carried out.

What are the benefits of using the IOSS?

  • Suppliers are entitled to register for the IOSS in one Member State for all supplies within the scope of the IOSS, made across the EU.
  • Suppliers are entitled to report and remit all import VAT, within the scope of the IOSS, due across the EU in one monthly return.
  • Suppliers are entitled to charge VAT at the applicable rate at the point of sale to a consumer, with the result that goods will proceed through customs without the need for VAT to be paid at the point of importation. This will facilitate a quicker release of goods by the customs authorities and therefore a speedier delivery of goods to the customer.
  • The IOSS may be used by taxable persons established both inside and outside of the EU.
  • Use of the IOSS will result in increased transparency for the customer, with the customer having the ability to see the total cost of the goods at the time of purchase. The customer will not be confronted with unexpected import costs at the point of importation.

What does the IOSS mean for businesses in GB selling into Northern Ireland?

Where GB businesses sell eligible low value goods into Northern Ireland and are registered for the IOSS in the EU, the supply VAT arising on these sales can be declared on the GB businesses' IOSS return. There is no requirement to subsequently account for import VAT when the goods enter Northern Ireland. 

Any GB businesses that are not UK VAT registered but are registered for the IOSS do not need to charge VAT on sales of low value goods into Northern Ireland. 

When would I need to use an IOSS intermediary?

Taxable persons who are established in the EU can register directly in their own Member State to avail of the IOSS.

Taxable persons that do not have an establishment in the EU can only register for the IOSS through an EU established intermediary and post-Brexit this includes GB based traders. An intermediary is a person that has their business establishment or a fixed establishment in the EU and represents a taxable person for the purpose of the IOSS.

Further information

Revenue.ie information about the Import One Stop Shop.

GOV.UK information about telling HMRC you're registered for the VAT IOSS in the EU.

 

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Article reviewed: April 2023