The European Commission is dedicated to fighting against frauds inside the bloc and has created a new VAT system to further enhance tax compliance, now also for e-commerce transactions. The Import One-Stop-Shop or simply IOSS will give more responsibility to sellers as they will have to declare and pay VAT on all imported goods being sold into the EU. The new measure comes into force from 1 July 2021.
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The new system will exclude the €22 VAT exemption threshold on imported goods. In other words, all goods imported into the EU will be subjected to VAT. This is an attempt to create fairer competition between local businesses and foreign prices.
EU and Non-EU-based businesses selling goods and services to final consumers in the European Union will have to pay the current VAT rate where the business is registered.
The European Commission tax authorities had established January 1 as the start date for the new VAT collection system, however, due to the COVID-19 pandemic, leaders have decided to postpone the start date to 1 July. It can be further postponed in case the situation doesn’t change by then.
MAIN IMPORT ONE-STOP SHOP BENEFITS:
- Sellers will easier collect, pay and declare VAT to the authorities;
- Buyers are only charged at the time of purchase;
- No extra charges or surprises with additional costs.
Check the next posts for more instructions on how Union and Non-Union businesses can get registered for the new Import OSS system.
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