The EU is now removing the duty-free limit for shipments with a total value of less than EUR 22, which previously could be imported free of charge to private recipients in the EU. The purpose of the new IOSS scheme is to charge international e-commerce operators VAT from the first euro, on an equal footing with national companies.
From 1 July 2021, if a private individual in the EU makes a purchase from an online store outside the EU that is not IOSS registered, the buyer will be required to pay import duties in addition to the customs clearance price.
Everything must be customs-cleared
When the duty-free limit is removed, shipments within the value range of EUR 0-150 will be subject to customs as are shipments of higher value. To streamline implementation of the new regulations, the new, simplified IOSS VAT registration is being introduced.
If you run an online store, you are responsible for paying correct VAT on behalf of your European customers when you ship from a country outside the EU (e.g. Norway, the United States, China and the United Kingdom).
What is IOSS?
IOSS can be used if you (the seller) export goods from a country outside the EU (e.g. Norway, the United States, China and the United Kingdom) directly to individuals within the EU. IOSS makes VAT payment possible directly at the online store's check-out, and you (the seller) ensure that correct VAT is paid to the recipient country. IOSS also makes it simple for your customers (the buyers), as VAT is charged only at the time of purchase, and therefore your customers avoid additional import duties or fees when the goods are delivered.
Note: From 1 July 2021, all commercial goods with a value below EUR 150 that are imported into the EU from a non-EU country will be subject to the new IOSS mandatory VAT rules.
How does IOSS work?
If you (the seller) are IOSS-registered, you must ensure that the correct VAT is added to the product when you sell directly to private individuals in an EU Member State. The VAT rate is the one applicable in the EU Member State where the goods are to be delivered. You choose whether to apply for IOSS approval, register yourself with your own company and/or designate a VAT representative in the EU.
IOSS registration is valid for all imported goods addressed to private individuals throughout the EU.
If you are affected by the new IOSS regulations, it is important that you contact the EU customs and tax authorities as soon as possible for more information. The exporter himself/herself must apply for IOSS approval. Unfortunately, Bring, as your logistics partner, cannot apply on behalf of you and your company, as the authorities only deal with the exporter when it comes to IOSS-related rights.
