The EU VAT reform is now in force since July 1, 2021, but not all foreign businesses that are concerned have already registered for IOSS (Import One-Stop-Shop).
If you’re a non-EU business with EU customers, you’re probably wondering whether you needed to register by July 1, 2021, and also whether you can still register.
In this article, we’ll look into the details of the IOSS registration for non-EU businesses, and give you answers to those questions—and more.
What is the registration deadline for the IOSS scheme?
In short, there is no deadline to register for the IOSS scheme, and July 1, 2021, was the date on which the reform was introduced, but it isn’t a hard deadline by which you needed to register. You can still register later this year, and, similarly to the OSS scheme, registering for IOSS is actually not mandatory: it’s just meant to simplify the import of goods into the EU, as well as streamline reporting and tax compliance for businesses.
You can still continue to use standard import procedures and VAT registrations in each EU country where you’re selling goods. Given that the new scheme simplifies the importation and reporting process significantly, we advise you to register for IOSS. However, you aren’t late with it—nor will you face any penalties, as long as you’re meeting all requirements and obligations related to charging, declaring and remitting VAT, and to importing goods into the EU.
In short, you can register for IOSS whenever you’re ready, and whenever it makes the most sense for your business.
What are the advantages of using the IOSS scheme?
The IOSS system allows you to optimize the selling and shipping process, and helps you guarantee a good customer experience (which is key for all online retailers).
The IOSS scheme makes online transactions easier for everyone, sellers, buyers and couriers alike:
- For sellers, importing goods, filing VAT returns, and paying VAT becomes easier and faster.
- Buyers benefit from a better experience and faster shipments.
- Logistics providers benefit from a simplified import process for the imports of their clients.
In fact, some couriers are already choosing to only work with IOSS-registered businesses, as the import process is simplified. This means that if you’re not registered for IOSS, you can still sell to EU customers, but your options to send products might be limited.
Let’s now look into some of the key benefits of using the IOSS scheme:
- Simplified import process: Importing goods under the IOSS scheme allows you to benefit from a simplified import process, which improves your delivery times.
- Easier reporting and tax compliance: You can use a single monthly VAT return for all your EU sales of under €150.
- No additional fees for customers: Your customers won’t have to pay import duties or VAT on their orders, which improves their experience.
- Fewer VAT registrations: If you’re using the IOSS scheme, you can register for VAT in a single EU country, instead of in each country where you have customers.
- Easier VAT reimbursements on returns: Whenever you have a return from a customer, claiming VAT back on this transaction is now easier.