If you sell goods in a European Union (EU) country, you may need to obtain a VAT (Value Added Tax) number and collect this tax on your sales.
For further information on VAT in the EU, please consult this page.
- What are the updates regarding VAT?
- What is the Import One Stop Shop (IOSS)?
- How does the Import One Stop Shop (IOSS) work?
- What goods are covered by the IOSS?
- How can I get my IOSS number?
- What changes in eBay Delivery?
- I already have my IOSS number. Can I use it to manage my shipments in eBay Delivery?
- The buyer has paid VAT twice, what can I do?
- Is it mandatory to register for the IOSS?
- Are there any exceptions?
What are the updates regarding VAT?
From 1st July 2021, the Value Added Tax (VAT) for the exemption for the import of goods with a value not exceeding €22 has been removed. As a result, all goods imported into the EU are now subject to VAT.
Online sales platforms, or marketplaces, are responsible for charging and collecting VAT, which simplifies the process for the user and ensures compliance with tax regulations. This means that when a user makes a purchase, VAT has already been calculated and included in the final price of the product, so the buyer pays this tax when completing and paying for the order. However, they will not be exempt from paying any other possible charges, fees or duties that may be required by customs authorities.
In the following table we explain the VAT regulation that came into force on 1st July 2021:
For further information about paying customs duties and taxes, please consult the article: Who has to pay the customs fees and taxes?
What is the Import One Stop Shop (IOSS)?
The Import One Stop Shop (IOSS) is a system that allows online businesses or marketplaces to sell goods in the EU with a value of less than €150 by simplifying the centralised declaration and payment of VAT to the tax authorities. In this way, the buyer does not have to pay VAT when they receive the product, as this tax has already been paid when the order was placed.
How does the Import One Stop Shop (IOSS) work?
The IOSS simplifies the process of paying and declaring VAT on cross-border sales within the EU for businesses and marketplaces selling goods with a value of less than €150. The VAT rate applied corresponds to the EU member state where the goods are delivered.
The IOSS offers multiple advantages for both sellers and buyers. On the one hand, it simplifies customs formalities and reduces administrative costs, allowing businesses to manage VAT more efficiently. On the other hand, it improves the shopping experience by eliminating the additional charges that consumers often incur when receiving their products.
The process works as follows:
- IOSS registration: businesses must register in the IOSS system, which allows them to centrally manage the VAT on all their sales.
- VAT calculation: when the user makes the purchase, the system calculates the applicable VAT according to the country of delivery and adds it to the final product price.
- VAT payment: the VAT collected during the purchase process is paid centrally through the IOSS. The seller or marketplace is responsible for remitting this tax to the relevant EU tax authorities.
- Payment exemption: the buyer will not have to pay VAT upon receiving the parcel, as this tax has been charged when the order was placed and paid for.
For further information about the Import One Stop Shop (IOSS), please consult this page.
What goods are covered by the IOSS?
The Import One Stop Shop (IOSS) applies to sales or imports of goods from countries outside the EU that meet the following criteria:
- Shipped or transported from outside the EU at the time of sale.
- Shipped or transported in consignments with a value not exceeding €150.
- Not subject to excise taxes (normally applied to alcohol or tobacco).
How can I get my IOSS number?
Sellers who currently ship goods from any country in the world to buyers in the European Union can register in the IOSS system and keep a record of all sales made within the EU.
Depending on the location of your company, there are two options available for registration:
- If your business is based in the EU: you can choose to register directly with the IOSS portals of any EU member state or through an intermediary. Each Member State has its own portal since 1st April 2021, and you can use it for transactions made from 1st July 2021.
- If your business is NOT based in the EU: you will need to appoint an intermediary established in the EU to fulfil VAT obligations through the IOSS system.
Important
Companies based in the United Kingdom are considered to be outside the European Union. They must therefore register for the IOSS system through an intermediary.
What changes in eBay Delivery?
At the moment, no changes are planned for our customers on eBay Delivery, as we do not yet have a functionality to provide the IOSS number to the carrier.
We are working to provide the best solution for our customers as soon as possible. In the meantime, we recommend that you add your shipping prices excluding VAT, as the buyer will pay this amount at the time of delivery. If VAT is charged to the buyer on the payment and shipping confirmation page, the buyer may pay double the amount of VAT as it is normally paid on delivery.
I already have my IOSS number. Can I use it to manage my shipments in eBay Delivery?
At eBay Delivery we are working to implement this option as soon as possible. Until then, we recommend you add your shipping prices excluding VAT, as the buyer will pay this amount at the time of delivery.
The buyer has paid VAT twice, what can I do?
If a buyer contacts you because they have paid VAT twice, the best option is to refund the duplicated amount. We recommend that you contact the buyer directly to arrange a refund of the amount charged.
Is it mandatory to register for the IOSS?
No, IOSS registration is optional, and you can still sell your services or goods to consumers in the EU without being registered. However, if you do not provide an IOSS number for imports within EU Member States, the buyer may end up paying VAT twice, in addition to the customs handling fees usually charged by carriers when delivering the parcel.
Are there any exceptions?
Yes, there are exceptions where VAT does not need to be charged on distance sales of goods imported into the European Union. These are the main circumstances:
- Goods with a value of more than €150. If you sell several goods to the same buyer and these are sent in a single shipment whose total value exceeds €150, they will be subject to VAT at the time of importation into the EU member state.
- Online sales. If your remote sales are made through an electronic interface, such as online businesses or marketplaces, the electronic platform will be responsible for collecting and declaring the VAT due.