FAQ: What VAT rules apply to the import of low value goods into the EU and Northern Ireland from outside the EU and NI?

EU VAT e-Commerce rules apply to the receipt or importation of goods into the EU and Northern Ireland in consignments not exceeding a value of €150 / £135.

There are a number of potential options to ease the burden on businesses of collecting and paying import VAT on these small consignments:

1. Import One Stop Shop (IOSS)

The IOSS allows suppliers selling goods from a 3rd country to customers in the EU/ NI to collect VAT at the point of sale. VAT is paid by the customer as part of the purchase price.

The IOSS can only be used where the goods, excluding goods subject to excise duty, are dispatched by or on behalf of the supplier from outside of the EU at the time they are supplied, and the intrinsic value of the consignment does not exceed €150.

Benefit to the supplier:

The benefit to the supplier of using the IOSS is that VAT is charged at the point of supply and so no further VAT arises when the goods are imported into the EU / NI. The seller is responsible for collecting the import VAT and making the relevant payment along with the filing of a monthly IOSS VAT return. The supplier must:

• Register in one Member State for all supplies within the scope of the IOSS made across the EU.
• Report and remit all import VAT, within the scope of the IOSS, due across the EU in one monthly return.
• 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.

Benefit to the customer: 

Consumers will pay import VAT due at the point of sale and avoid further tax or customs charges at delivery of the goods.

Note:

Non-EU sellers will be required to use an intermediary if they wish to use the IOSS. This applies to movements of goods from GB to NI.

Revenue.ie has further information about the IOSS and how to register.

2. Special Arrangements for declaration and payment of import VAT

The Special Arrangements are a simplification measure designed in particular for postal operators, express carriers and other customs agents in the EU who typically declare low value goods for importation. 

The Special Arrangements can be used when the IOSS is not used nor the standard VAT collection mechanism on importation.

Under the Special Arrangements the customer pays the VAT to the courier or postal service presenting the goods. VAT is not paid at check-out. Instead, the customer pays the VAT to the courier or postal service presenting the goods.

The postal service or operator, referred to as the declarant, are then responsible for the subsequent payment of VAT to Revenue.

Read our detailed article for more information about E-commerce VAT reform.