Form 1 July 2021 the VAT exemption for the importation of goods into the EU with a shipment value not exceeding €22 has been abolished.
The European Union introduced a new VAT regime which is called Import One Stop Shop (IOSS).
It was created to facilitate and simplify the declaration and payment of VAT for goods sold from a distance by sellers from either the EU or from a non-EU country or territory.
As a result, all goods imported into the EU are subject to VAT.
The IOSS allows suppliers and electronic interfaces selling imported goods to buyers in the EU to collect, declare and pay the VAT to the tax authorities, instead of making the buyer pay the VAT at the moment the goods are imported into the EU.
If IOSS is used, VAT is paid by the customer as part of the purchase price and customer do not face any future charges upon arrival of the goods.
The IOSS can be used by the seller (for his web shop) or electronic interfaces (marketplace or online platform) for B2C transaction when the goods are dispatched from non-EU to customers in the EU and the shipment value do not exceed €150.
You cannot use IOSS if the shipment is subject to excise duty for instance: alcohol or tobacco products.
If your business is not based in the EU and you do not have an establishment in the EU, to register for IOSS you will need to appoint an EU established intermediary to fulfil your VAT obligations.
If you would like to register for IOSS or use Easy2Go intermediary service, please contact us.