What is happening?
There will be changes to the EU VAT rules on 1 July 2021
From 1 July 2021 the value added tax (VAT) exemption for the importation of goods not exceeding 22 EUR will be abolished.
- ALL goods imported to the EU will be subject to VAT.
- ALL bookings from the UK to EU are affected by this change
What is IOSS?
It is a new (optional) VAT collection scheme for online sellers/online platforms who send goods to the EU
The IOSS allows suppliers and marketplaces selling imported goods, up to a value of 150 EUR to consumers in the EU to collect, declare and pay the VAT to EU tax authorities, instead of making the buyer/receiver pay the VAT when the goods are imported into the EU as was previously the case.
How does it work?
If a customer opts for using IOSS, they must provide the IOSS identification number so the carrier can use it in the Clearance Process.
- We are adding an IOSS box within our booking platform for B2C or B2B customer who ship goods entered as under the value of 150 EUR
- Customers will be able to add an optional IOSS registration number to their booking
- If no IOSS is added, VAT will be charged upon the import of goods
The IOSS facilitates the collection, declaration and payment of VAT for sellers/shippers who are making distance sales of imported goods to buyers in the EU.
The IOSS also makes the process easier for the buyer/receiver, who is only charged at the time of purchase of the item, and therefore does not face any surprise fees when the goods are delivered.
If the seller/shipper is not registered in the IOSS, the buyer/receiver has to pay the VAT and usually a customs clearance fee is charged by the carrier.
Who does it affect?
These reforms will primarily target B2C e-commerce imports, affecting both businesses and consumers. However, they also impact B2B imports.
What are the changes?
For all goods imported into the EU with an intrinsic value up to 22 EUR:
- The VAT exemption will be abolished from 1 July 2021
- So in short, all imports to the EU will now be subject to VAT
What are the changes?
For B2C businesses sending goods valued up to EUR 150 directly to consumers in the EU:
An Import One Stop Shop (IOSS) platform is being launched to allow them to settle VAT in the EU (no longer country-specific).
For goods valued up to 150 EUR sold to EU consumers via an online marketplace
The online marketplace will now be responsible for EU VAT compliance.
An Import One Stop Shop (IOSS) platform is being launched to allow them to settle VAT in the EU
Are there any changes to Customs duty?
No, there are no changes to customs rules planned for 1 July 2021.
Duty rates and non-tariff rules will remain as today.
Shipments up to a value of EUR 150 are exempt from duty.
Does a customer need to have an IOSS registration number?
No, it is optional
Where can I find further information?
European Commission / Business / IOSS
Carrier Specific detail
There are now only 7 countries that we can offer DPD services to, if the value is under 150 EURO: These are the only countries DPD can offer IOSS for.
For any shipment under EURO 150, going to any other country, you will need to advise customers to cancel the shipment online and that they will be offered the option to change to another carrier.
For all shipments going to one of the above countries OR shipments over 150 EUR can offer this service