If you are an e-commerce seller, registering with the EU’s Import One Stop Shop (IOSS) is a must.
IOSS was created with the goal of simplifying VAT declaration and payment for distance sales of imported goods valued at €150 or less. Traditional VAT collection sees the customer being charged on delivery, however with the introduction of IOSS, VAT is now collected at the point of sale and paid through the IOSS.
In order to benefit from this scheme, as an e-commerce seller, you would need to register with a single EU tax authority, thereafter, submit one monthly VAT return for eligible sales made to customers across the EU.
The process of using IOSS can be described as follows:
The process above results in the release of goods being handled at a much faster pace which is in turn translated to a frictionless shopping experience and increased customer satisfaction as the customer does not have to pay VAT or handling fees upon delivery.
For a closer look at what an IOSS number is and why it matters, see our guide on what is an IOSS number and why is it important.
5 Benefits of Implementing the IOSS
Practical Example
Without IOSS:
With IOSS:
There are six key criteria that a buyer should consider before registering for an IOSS, namely:
Let us look at the above in more detail below.
1. Intermediary Qualifications
An intermediary is a taxable person who is established in the EU and is appointed by another taxable person as the person liable to pay VAT and to fulfil the VAT obligations laid down in the IOSS in the name and on behalf of said taxable person.
When determining which intermediary to appoint, be certain to consider the following in your evaluation of the intermediary:
2. EU Country Coverage
It is imperative that the provider that you choose is able to support sales across the entire EU, thus be sure to consider if your prospective provider:
3. Filing Automation
As your business grows, so will your order numbers, thus it would be beneficial to switch over from manual reporting, which carries with it increased risk of errors and inefficiency. Automation on the other hand will improve compliance and reduce administrative burdens.
Thus, look for solutions that offer:
4. How the Provider Handles Rule Changes
EU VAT legislations are ever evolving, as such you should be aligned with a provider who is well equipped to handle these evolutions as and when they come.
Thus, look for providers who:
5. Pricing Transparency
When shopping around for a provider, there are a myriad of aspects to pricing to consider besides the registration fees.
Understand the full cost of ongoing compliance by also reviewing if the price quoted includes:
Also be sure to confirm if the charge is for a flat monthly fee or per shipment/transaction.
6. Customer Support
VAT compliance is time-sensitive, particularly around filing deadlines, thus consider if your provider offers:
The following is a comprehensive list of providers who provide reputable solutions for IOSS registrations, intermediary services and ongoing compliance. In no particular order:
| Provider | What They Offer |
|---|---|
| VAT IT | International VAT compliance services for businesses selling into the EU including IOSS registrations, VAT registrations, ongoing VAT return filing and advisory services. Known for combining tax expertise and technology to assist businesses in managing cross-border VAT obligations across multiple jurisdictions. |
| EAS Project | Specialises in EU and UK cross-border compliance. Services include IOSS registrations, VAT calculations, monthly reporting, filing and, should your business require it, intermediary services as well. |
| Avalara | Offers IOSS support, automated tax calculations, VAT registrations, return filings across 190+ countries, all whilst utilising the ERPs, billing platforms and other business systems that you already use. Combines 20+ years of tax experience with AI platforms in order to provide their services. |
| Taxually | Provides instant tax registrations, automated data processing, global filing and reporting in addition to cloud-based VAT compliance covering IOSS and OSS. Strong emphasis on automation and integration. |
| SimplyVAT | Offers IOSS registrations, VAT returns and compliance advice with extensive experience assisting non-EU businesses expand into European markets. |
| AVASK | Specialises in IOSS, VAT compliance, customs advisory, fiscal representations and international expansion services. Provides end-to-end tax compliance and marketplace registration guidance for e-commerce businesses which sell into the EU and other international markets. |
| Taxdoo | Combines automated VAT compliance, IOSS and OSS reporting, inventory tracking, financial reporting and marketplace integrations into a single platform. Particularly caters to marketplace sellers such as Amazon and Shopify, automating VAT compliance whilst maintaining visibility over cross-border operations. |
| Hellotax | Provides assistance with EU VAT registrations, VAT filings, OSS registration and VAT automation software. Platform designed for online sellers who would like to simplify EU VAT compliance with minimal manual effort. |
The general rule of thumb for businesses established outside of the EU is that they must appoint an EU-established fiscal intermediary, who will act on the seller’s behalf in dealing with IOSS obligations such as registering for and using the IOSS.
This results in an ongoing business relationship in which the seller will be obligated to provide the following to their fiscal intermediary:
As such, it is imperative to verify the following before appointing a fiscal intermediary:
It must be noted that appointing a fiscal intermediary may significantly simplify the administrative side of IOSS but it does not transfer ownership of your tax obligations.
For a broader view of EU VAT compliance, see our guide on simplifying EU VAT compliance.
Despite the IOSS being designed to simplify VAT collection, it is unfortunately not immune to issues resulting in compliance gaps, namely:
1. Incorrect goods valuation
This occurs when an incorrect value is declared for imported goods which may result in the customs authority:
2. Missing IOSS number in shipping data
The carrier or postal operator must submit a valid IOSS identification number, along with the electronic customs data. If this number is missing or incorrect, the customs authority may not be able to verify that the shipment is an IOSS import and this may result in:
3. Mixing IOSS and non-IOSS shipments in the same consignment
Examples of this common operational mistake include:
The situations above may complicate the customs processing as different tax rules may apply to different items in the same consignment. In cases where customs authorities refuse to apply the IOSS treatment to the consignment, additional VAT collection or clearance delays may be the unfortunate result.
When choosing an IOSS provider it is imperative to match said provider to your personal business profile.
The correct choice is dependent upon your business sales volume, the countries you sell to, and the level of compliance support your business requires.
If your business is a low-volume seller, or you are a new exporter testing EU demand, you would benefit from a provider that offers straightforward registration, monthly filing, and basic compliance support.
As your order volume increases, your business would then benefit from a provider who automates transaction imports, as automation reduces administrative effort whilst assisting in maintaining accurate reporting.
Questions to consider before appointing an IOSS provider:
1. Does an IOSS registration in one EU member state create any additional VAT obligations in other member states?
No, an IOSS registration in one EU member state covers eligible distance sales to consumers across all EU member states.
2. Do shipments valued over 150 euros fall outside IOSS entirely?
Yes, shipments with a value above 150 euros are not eligible for IOSS and will be subject to the normal import VAT and customs procedures.
3. If a seller uses multiple platforms, can a single IOSS number cover all of them?
Yes, a single IOSS registration can cover eligible sales made through multiple sales channels.
4. What are the monthly filing deadlines under IOSS and what happens if one is missed?
The general rule is that the IOSS VAT returns must be submitted by the end of the month following the reporting period, however this may vary between member states. Missing the deadline may result in penalties, interest or other compliance action by the relevant tax authority such as deregistration from the IOSS scheme.
5. Can an IOSS intermediary also handle OSS obligations for the same seller?
Yes, many providers offer both IOSS and OSS compliance services.
Choosing the right IOSS provider can be the difference between smooth customs clearance and ongoing friction at the border. If you are weighing up your options or are unsure whether your current setup is fully compliant, get in touch with our team to discuss your specific requirements.
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