IOSS - The import one stop shop launches 1st July

On July 1st 2021 the EU provision of €22 import VAT exemption on ecommerce purchases will be abolished.

Do you sell online into Europe?

As of 1 July 2021, there are changes to the way VAT is handled for online sales from businesses worldwide to consumers (that is, B2C) in the European Union (EU). According to the current VAT rules applicable up until 1 July 2021, no import VAT has to be paid for commercial goods of a value up to €22. However, from 1 July 2021 businesses will need to use the Import One-Stop Shop (IOSS) to help comply with their VAT ecommerce obligations on distance sales of imported goods. This means all commercial goods imported into the EU from a third country or third territory will be subject to VAT irrespective of their value.

Is IOSS for B2C and B2B ecommerce sales?

There are conflicting views on this point, and at the time of going to print these new VAT measures were limited to online sales to consumers in the EU. Business to business (B2B) sales from a business in the UK to a business in an EU country continue as they have following the end of the Brexit transition period on 1 January 2021. This means B2B sales are generally subject to the reverse charge. Exports of goods should be zero rated, and are then subject to tax in the destination country through the application of import VAT.