The EU VAT reform is now in vigor since July 1, 2021, and it has a profound impact on all businesses who trade with EU B2C customers.
If you’re operating a business that sells goods to EU customers and aren’t located in the EU, you’d need to consider registering for the IOSS (Import One-Stop-Shop) scheme, and appoint an intermediary. In this article, we’ll look into the details of the IOSS system and give you more information on appointing an EU intermediary.
Do you need to register for IOSS?
The IOSS scheme is for non-EU businesses who import goods to the EU for B2C sales.
It’s not mandatory, which means that businesses can keep their VAT registrations in each member state where they sell goods, and use standard import procedures.
However, the IOSS scheme greatly simplifies transactions with EU customers and streamlines the import process for goods of a value under €150, so if you have buyers located in the EU, it definitely makes sense to register for it.
Do you need to appoint an intermediary to use the IOSS scheme?
In short, yes: if you’re operating a non-EU business and wish to register for the IOSS scheme, you need to appoint an EU-based intermediary, whose role is similar to the one of a VAT agent.
Both online marketplaces and sellers who have their own online shop will need to appoint such a representative, except for countries that have a mutual assistance agreement with the EU. For the moment, only Norway has one, and the UK will also likely have one in the future. In case there is a mutual agreement in place, foreign businesses from those countries might not need to appoint an intermediary. In all other cases, businesses will need an intermediary.
What does the intermediary do?
The IOSS intermediary is responsible for the submission of VAT returns and payments, together with the business that has appointed it.
For this reason, IOSS intermediaries need to be taxpayers in the EU, and will fulfill tax and import obligations on behalf of the company that has appointed them. The seller (or the online marketplace operator) remains jointly liable for all VAT obligations; in practice, this means that member states will first claim VAT from the intermediary, and then from the seller.
Intermediaries will have a IOSS VAT ID number for each non-EU business they’re working with.
Who is the right IOSS intermediary for your business?
To find the right IOSS intermediary for your business, there are a few things you need to consider and check:
- Their local tax registration: You need to appoint an intermediary who is registered at their local tax office.
- Adaptable service offers and packages: Find an intermediary who can adapt to the needs of your business and support its growth. Analyze your intermediary’s different packages and offers to see if they’d be a good fit.
- Reliability: Your intermediary needs to be experienced and reliable, in order to help you meet all deadlines and comply with your IOSS obligations.
- Experience with local taxes: While the IOSS is an EU-scheme, your IOSS intermediary should also be an expert in handling local taxes, since they’ll be dealing with their local tax office.