ANSWERS TO SOME COMMON QUESTIONS
Who is IOSS for?
IOSS is designed to simplify VAT registration and reporting requirements for non-EU businesses selling into the EU. It is designed for merchants shipping consignments under the value of €150 direct to consumers in the EU (B2C).
How does IOSS work?
IOSS allows you to sell to the whole of the EU with a single IOSS VAT Registration. Once registered through an approved intermediary you receive your own unique IOSS number, and you only need to file one VAT return a month and make one VAT payment for all your EU sales.
What are the benefits of IOSS?
IOSS replaces Low Value Consignment relief across the EU and, from 1st July 2021, makes VAT apply to all such B2C movements under a simplified regime whereby;
- No VAT or duty is due on import
- VAT is due only on sale according to the nature of the goods (at standard or reduced rates)
- Merchants appoint a IOSS Intermediary to represent them before the tax authorities, submit VAT Returns and process VAT payments
- Merchants obtain their own unique IOSS number (which is linked to their chosen intermediary)
- Merchants can trade freely across all EU member states with a single registration and a single monthly VAT return
How is the consignment value of €150 defined and calculated?
A consignment is the price of the goods themselves when they are purchased by an EU customer. This value excludes transport and insurance costs unless these are included in the price of the goods, rather than being displayed separately. Any other charges and taxes are also excluded from the value calculation. Should this intrinsic value of goods ordered by an EU consumer go over EUR150, this consignment will no longer be eligible for IOSS and instead, VAT will be due upon importation.
How do I register for IOSS with Desucla?
You can sign up directly from our website. Just select the IOSS product that is most suitable for you and enter the information requested. You will then need to download and sign one or two forms (depending on country of registration) and re-upload them to our platform. Once received we will process your IOSS application and will share your Merchant IOSS number when we receive it back from the authorities.
How long does IOSS registration take?
The Desucla application takes just 10 minutes but the time for tax authorities to process your application can vary and depends on their workload. We aim to get IOSS numbers back to merchants within 4 working days but it can take up to 3 weeks at busy times for certain tax authorities. We keep you informed and update you by e-mail at every step.
What are the alternatives to IOSS?
IOSS is not mandatory but is designed to simplify selling to Europe and make things as efficient as possible. If you do not register for IOSS you can either:
- Have your customers pay the VAT due themselves when they take delivery of your item(s). This often comes with additional courier costs for the seller and significantly impacts client experience and repeat business.
- Register for VAT locally in Europe and obtain a VAT number in each country you sell into, paying duty and VAT on import and charging VAT to the customer subject to the normal rules. This approach creates significantly increased cost, compliance and reporting responsibilities across multiple countries.
The EU hopes IOSS is an attractive alternative to the above options and will streamline trade with the bloc. With your IOSS registration you can access the whole of the EU and you only need to submit one VAT return each month together with a single VAT payment. Your IOSS return and associated payment must be submitted to and processed by your chosen IOSS Intermediary.
In what country does Desucla register me for IOSS and can I choose?
The primary IOSS registration country for Desucla is Ireland as they process applications quickly for our clients. We are also registered in The Netherlands and you could specifically request IOSS registration here if preferred. Our primary country is always under review, and we will generally promote the most efficient location at a given time. It makes no different to the merchant where they are ultimately registered for IOSS as all countries follow the same EU-wide process, but some countries have better systems to process high volumes of clients.
What are the ongoing reporting and payment requirements for IOSS?
You or your compliance provider will need to upload your IOSS VAT Returns to the Desucla Platform by the 15th or the month following the VAT Return period. You will then need to make payment of the VAT owed to Desucla and cleared EUR funds need to be with Desucla at least 3 working days before month end.
Can I register for IOSS directly myself without an intermediary?
No. You have to use a registered and authorised IOSS intermediary like Desucla to register for IOSS and get your unique IOSS number. Your IOSS number is linked to the intermediary so if you change intermediary you will need to apply for a new IOSS number.
Can I change IOSS Intermediary?
Yes. You can change IOSS intermediary, but it will mean you need to re-apply to the IOSS scheme and obtain a new IOSS number linked to your new intermediary. If you cease to work with a particular intermediary, then your IOSS number with them will be cancelled.
How often are IOSS VAT Returns due?
IOSS VAT Returns are due monthly. Desucla requires your final IOSS VAT Return data to be uploaded to our system by the 15th of the month following the VAT period. Payment is then due and must arrive in cleared EUR funds with Desucla no later than three working days before month end.
When are IOSS Payments due?
Payments need to be received by Desucla in cleared EUR funds at least 3 working days before the end of the month following the VAT Return period.
What currency can I pay my IOSS VAT in?
Your IOSS VAT Return is calculated in Euros but when you come to make payment with Desucla you can chose to pay in either EUR, GBP, USD, AUD, CAD, JPY, CNH, SGD or HKD. Desucla offers far better exchange rates than the banks and will save you money if you need to exchange currency to pay your VAT.
What if I’m late paying my VAT?
Cleared EUR funds need to be with Desucla at least 3 working days before the end of the month following the VAT Return period. Funds received after this date risk being paid late and penalties and fees will apply from the relevant EU member states. Desucla has a zero tolerance to late or non-payment and your IOSS number risks being cancelled if you do not pay your VAT on time.
What if I’m late reporting my VAT?
IOSS VAT Returns are due monthly. Desucla requires your final IOSS VAT Return data to be entered into our system by the 15th of the month following the VAT period. We will make every effort to submit any returns provided to us after that date as quickly as we can but we cannot guarantee timely submission if you are late to pass us the data and penalties may be incurred from tax authorities.
Can I make my IOSS VAT payment myself direct to the tax authority?
No. As your IOSS intermediary your VAT Payments under the IOSS scheme must come through Desucla. Once your IOSS VAT Return has been uploaded to the Desucla portal you will be given instructions on how to make payment.
Can I submit my own IOSS VAT return to the tax authority directly?
No. As your IOSS intermediary your VAT return submissions under the IOSS scheme have to come through Desucla. These can be uploaded to our online portal each month by the merchant themselves or their chosen compliance provider.