Business Sender
What is Changing for Business Senders?
From July 1st 2021, all goods exported from the UK to the EU with the exception of a gift under €45 (£40) in value sent from one individual to another, will now be subject to Local VAT
- Gifts under €45 (£40) in value are the only exception for consumers (private individuals), this exception does not apply to businesses
- Import-One-Stop-Shop (IOSS) is being introduced on 1/7/21 to allow businesses to collect Local VAT at the point of sale and settle with EU tax authorities efficiently
- Participating Online Marketplaces are now responsible for EU VAT collection on goods sold to EU customers by UK sellers up to a value of €150 (£135)
How is the amount of Local VAT on Goods Exported to the EU Calculated?
VAT is calculated by adding the value of the goods and the shipping cost then multiplying by the Local VAT rate(specific to the destination country)
What is IOSS & Why Should I Use it?
Import-One-Stop-Shop (IOSS) is an electronic portal for businesses to comply with Local (EU) VAT obligations on goods sold to EU customers by UK sellers up to a value of €150 (£135)
- The system allows businesses to charge VAT up front and remit online on a monthly basis
- IOSS will save UK businesses, online sellers and their EU customers time and effort by dealing with Local VAT at the point of sale rather than the point of import / prior to delivery.
Who Should Use IOSS?
Business
Any UK business selling goods to EU consumers with values under €150 (£135) should consider using IOSS. Unless you only sell on participating marketplaces (eBay / Amazon / etc.)
Marketplaces
If your business only sells on participating marketplaces (eBay / Amazon / etc.), it is the responsibility of that marketplace to collect applicable EU VAT charges on goods and pay them to the relevant EU Tax authority via the IOSS system.
In this scenario, you will be given an IOSS number by the marketplace to enter when booking your parcel.
What About UK Sellers who Do Not Sign Up to IOSS?
If your business chooses not to use IOSS, the purchaser / recipient of your goods must pay any Local VAT prior to delivery. They will be contacted by the carrier to arrange payment.
What About Goods Worth Over £135 / €150?
IOSS does not apply to goods worth over €150 (£135)
If the value of goods is greater than €150 (£135), the purchaser / recipient of your goods must pay any Local VAT prior to delivery. They will be contacted by the carrier to arrange payment.
How Do I Register for IOSS?
To register for IOSS, you will need to appoint an intermediary, who will perform the following actions on your behalf:
- Submit monthly IOSS VAT returns that contain the total value of the goods sold, their VAT rate and the total VAT amount to be paid, broken down by standard and reduced rate and for each EU country where the goods are transported to.
- Make a monthly payment of any Local VAT due as declared in the IOSS VAT return.
How is IOSS VAT Calculated?
IOSS VATis calculated using the following formula:
Value of Item + Shipping Cost x VAT Rate of Destination Country
Sellers can use customers’ delivery addresses to determine the country VAT rate.
| Member States | Standard VAT Rate % |
|---|---|
| Austria | 20 |
| Belgium | 21 |
| Bulgaria | 20 |
| Croatia | 25 |
| Cyprus | 19 |
| Czech Republic | 21 |
| Denmark | 25 |
| Estonia | 20 |
| Finland | 24 |
| France | 20 |
| Germany | 19 |
| Greece | 24 |
| Hungary | 27 |
| Ireland | 23 |
| Italy | 22 |
| Latvia | 21 |
| Lithuania | 21 |
| Luxembourg | 17 |
| Malta | 18 |
| Netherlands | 21 |
| Poland | 23 |
| Portugal | 23 |
| Romania | 19 |
| Slovakia | 20 |
| Slovenia | 22 |
| Spain | 21 |
| Sweden | 25 |
Consumer Sender
What is Changing for Consumer Senders?
From July 1st 2021, all goods exported from the UK to the EU with the exception of a gift under €45 (£40) in value sent form one individual to another, will now be subject to Local VAT
- Gifts under €45 (£40) in value are the only exception for consumers (private individuals), this exception does not apply to businesses. No Local VAT or customs charges will apply to gifts under the value of £40 / €45
What Qualifies as a Gift?
- A gift is an item given by one individual to another where no payment is exchanged
**Please Note: Items purchased from an online marketplace - such as eBay or Amazon - and marked as a gift will not be classified as a gift under the new regulations.
How do VAT Charges Get Paid?
The recipient of your goods must pay any Local VAT prior to delivery. They will be contacted by the carrier to arrange payment. Once the recipient has paid these charges, the parcel will be released and delivered.