20 Jun Taking advantage of the new EU Vat rules coming on 1 July 2021
What are the changes on the 1st of July?
If you sell items with a value of up to 150 euros (excluding the postage cost), you can register for the Import One Stop Shop (IOSS). You can choose which EU country to register for IOSS in. The key is that the total value of the parcel is valued up to 150 euros. So, if someone buys several different items and the total value comes to more than 150 euros, then the IOSS can’t be made use of. You may be able to set up your sales platform to disable the ability for anyone to be able to purchase more than 150 euros in one checkout and one delivery.
How could this benefit me?
Only one EU Vat registration is required, but you can sell to all 27 EU countries.
(Depending on which country you register in, you may need a fiscal representative. This means having an appointed person / business who resides in that country, who takes full responsibility to pay your Vat amounts due should you fail to do so.)
What rates of Vat would I charge?
You must charge Vat for the country that you are delivering to, at the point of checkout. This means setting up your sales platform to pick up the correct Vat rates.
How often would I have to report my sales and pay over the Vat?
Monthly, but only one payment and one return is required to the country that you are registered for IOSS in, despite selling to any EU country.
Would I still pay Vat when the goods are imported into the EU country?
No. You will state your IOSS number on the paperwork.
I only sell on marketplaces such as Amazon and Ebay, could this still benefit me?
Actually, it could benefit you even more. You won’t even need to register for IOSS as the marketplace becomes the responsible party for reporting and paying over the Vat. All you need to do, is charge the correct country Vat rate at point of checkout. The marketplace will then keep this Vat amount and not pay it out to you.
Does the current 22 euros exemption still apply?
No. If you sell an item with a value of under 22 euros, at the moment it is exempted from import Vat and also having to register for Vat in the destination country. This will no longer apply. Therefore, if you are currently making use of this exemption, you will need to register for IOSS and charge Vat.
What if my goods are not low value but I want to start selling to the EU?
You will need to register for an EU EORI number, plus Vat in the country or countries that you want to start selling to. Only one EURO number is required for importing to the EU, but each country will require a Vat registration if you wish to sell there. Each country’s Vat regime will then apply – different EU countries have different reporting frequencies and may have additional requirements.
If this is something that you wish to explore further, please get in touch