What is the IOSS Registration?
IOSS stands for Import One Stop Shop, which is a new VAT (value-added tax) scheme that was introduced in the European Union (EU) in July 2021. The IOSS is designed to simplify the collection and payment of VAT on cross-border sales of low-value goods, which are goods with a value of up to €150.
Under the IOSS, businesses that sell low-value goods to customers in the EU for products that are coming from outside of the EU can register for VAT in a single EU member state and then collect and pay VAT on their sales to customers in other EU member states through a single online portal. This simplifies the VAT compliance process for businesses, as they no longer need to register for VAT in each individual member state where they have customers.
The IOSS is available to businesses that are established either within or outside of the EU, and it applies to a wide range of low-value goods, including goods sold through online marketplaces. However, there are certain exceptions, such as goods subject to excise duties or goods that are not intended for private consumers.
What is the OSS Registration?
The One Stop Shop (OSS) is a simplified VAT (value-added tax) scheme for businesses that sell goods or services to customers in multiple member states of the European Union (EU). The OSS allows businesses to report and pay VAT on their cross-border sales for products that are coming from of the EU through a single online portal, rather than having to register for VAT in each individual member state where they have customers.
Under the OSS, businesses can register for VAT in a single EU member state, and then report and pay VAT on their cross-border sales to customers in other member states through the same portal. This makes it easier and more cost-effective for businesses to comply with their VAT obligations in multiple member states.
There are two types of One Stop Shop schemes available under the EU VAT rules:
The Union OSS: This scheme is for businesses that are established in the EU and sell goods or services to customers in other EU member states. It allows businesses to report and pay VAT on their cross-border sales of goods or services to customers in other member states through a single VAT return.
The Non-Union OSS: This scheme is for businesses that are established outside of the EU and sell goods to customers in the EU. It allows businesses to report and pay VAT on their cross-border sales of goods to customers in the EU through a single VAT return.
The One Stop Shop is designed to simplify VAT compliance for businesses operating cross-border within the EU, while also making it easier for tax authorities to collect VAT owed on cross-border sales. However, it is important for businesses to understand the specific rules and requirements of the scheme, and to ensure they comply with all relevant VAT regulations in the member states where they are doing business.
What are the benefits of using the IOSS or OSS for businesses?
✓ Simplified VAT Compliance: Streamlined process for VAT collection, reporting, and payment.
✓ Centralized Reporting and Payment: Single VAT return for multiple EU member states, reducing administrative complexity.
✓ Faster Customs Clearance: Expedited customs process for quicker delivery to customers.
✓ Improved Customer Experience: Transparent pricing with VAT included, avoiding surprise charges.
✓ Compliance with VAT Regulations: Ensures adherence to EU VAT rules for cross-border e-commerce.
✓ Competitive Advantage: Attracts EU customers, expands market reach, and enhances competitiveness.
What are the benefits of using the IOSS and OSS for EU customers?
✓ Transparent Pricing: Displays the total price, including VAT, upfront for clarity.
✓ Faster Delivery: Expedited customs clearance leads to quicker order fulfillment.
✓ VAT Compliance: Demonstrates adherence to EU tax regulations, building trust.
✓ Enhanced Shopping Experience: Provides a smoother and more convenient buying journey.
Before having the IOSS number
A business located outside the EU sells products to customers in various EU member states.
Each time a sale is made, the business needs to register for VAT in each individual member state, file separate VAT returns, and comply with different VAT regulations and thresholds.
This process is time-consuming, complex, and involves significant administrative burdens. The business may also face delays in customs clearance, potentially leading to longer delivery times for customers.
After having the IOSS number
The same business registers for the IOSS and obtains a single IOSS number.
They can now collect and remit VAT at the point of sale based on the customer's location. With the IOSS number, the business can file a single VAT return for all EU member states, simplifying the reporting process. Customs clearance is expedited, ensuring faster delivery of goods to customers.
The business benefits from streamlined VAT compliance, reduced administrative work, and improved customer experience.
Expand your business to all EU member states with just one VAT return.
Global Trade Business is here to help with the IOSS solution.
IOSS and OSS registration and returns process
Understand your business operation and needs
Have a free consultation call with us.
One of our VAT experts will review your business activities and understand your needs to identify the IOSS / OSS obligations.
Our team will ensure to have all the right data and documents. After checking all information, our local team will proceed to IOSS / OSS registration. The duration of registration process depends on the country.
Collect required data and documents
When you have the IOSS/OSS number, you need to provide us all the declaration materials to file the return on time.
Receive the IOSS/OSS number and submit returns
What are the differences between the 13th Directive and the EU VAT Refund Directive?The 13th Directive and the EU VAT Refund Directive (Directive 2008/9/EC) are both mechanisms that allow businesses to claim Value Added Tax (VAT) refunds in European Union (EU) member states. However, there are some key differences between these two directives. Here are the main distinctions: Scope and Applicability: 13th Directive: The 13th Directive specifically applies to businesses located outside the EU that do not have a VAT registration within the EU. It is designed for non-EU businesses to claim VAT refunds on eligible expenses incurred in EU member states. EU VAT Refund Directive: The EU VAT Refund Directive applies to businesses established within the EU, allowing them to claim VAT refunds on expenses incurred in other EU member states. It is applicable to VAT-registered businesses within the EU seeking cross-border VAT refunds. Application Process: 13th Directive: Under the 13th Directive, non-EU businesses need to submit a VAT refund application to the tax authorities of the EU member state where the VAT was paid. The application is typically made using a specific form provided by the tax authority. EU VAT Refund Directive: The EU VAT Refund Directive introduces a simplified and streamlined process for VAT refund claims within the EU. Businesses can apply for refunds electronically through their home country's tax authority, rather than submitting applications directly to each member state.
What VAT can be refunded under 13th Directive?Under the 13th Directive, non-EU businesses can claim VAT refunds on directly related business expenses incurred in European Union (EU) member states. While the specific eligibility criteria may vary between countries, here are some examples of expenses that are commonly considered directly related to business activities: Accommodation Expenses: VAT paid on hotel stays or rental accommodations for business purposes, such as attending conferences, trade shows, or client meetings, can typically be claimed under the 13th Directive. Meal Expenses: VAT paid on meals or restaurant bills incurred during business-related activities, such as client meals, team meetings, or business travel, may be eligible for a VAT refund. Transportation Costs: VAT paid on transportation expenses directly related to business activities, such as airfare, train tickets, taxi fares, or car rentals, can often be claimed under the 13th Directive. Trade Show or Exhibition Expenses: VAT paid on expenses related to participating in trade shows, exhibitions, or conferences, including booth rentals, registration fees, promotional materials, and related services, may be eligible for VAT recovery. Professional Services: VAT paid on professional services directly related to your business activities, such as legal fees, consulting fees, or marketing services, may be eligible for a VAT refund. Business Entertainment: VAT paid on entertainment expenses incurred for bona fide business purposes, such as client entertainment events, team-building activities, or business-related social functions, might be eligible for VAT recovery.
What documents are required for claiming the VAT refund?The documentation requirements for claiming VAT refunds can vary between countries and depend on the specific rules and regulations of the tax authority where you are submitting your VAT refund application. However, here are some common types of documentation that are often required: Valid VAT Invoices: You will typically need to provide original VAT invoices or receipts for the expenses on which you paid VAT. The invoices should include the necessary details, such as the supplier's name and address, your business's name and address, the invoice date, a unique invoice number, a description of the goods or services, the VAT rate applied, and the amount of VAT paid. Proof of Payment: You may be required to provide evidence of payment for the expenses on which VAT was paid. This can include bank statements, credit card statements, or other forms of payment documentation that demonstrate the payment was made. Import/Export Documentation: If you are claiming VAT refunds on import or export transactions, you may need to provide additional documentation such as customs declarations, shipping documents, import/export licenses, or proof of export. Proof of Business Purpose: Some tax authorities may require you to provide evidence that the expenses for which you are claiming VAT refunds were incurred for business purposes. This can include supporting documents like travel itineraries, conference agendas, or contracts that demonstrate the business nature of the expenses. VAT Refund Application Form: You will likely need to complete a VAT refund application form provided by the tax authority. The form will require you to provide information about your business, VAT registration details, the reporting period for which you are claiming the refund, and details of the eligible expenses. Please note that the specific documentation requirements can vary significantly between countries. Some countries may have more stringent requirements, while others may have simplified procedures for VAT refund applications.
What is the difference between IOSS and OSS?IOSS (Import One-Stop Shop): It is a mechanism for declaring and paying VAT on goods imported from non-European Union (EU) countries. It allows businesses to collect and declare VAT at the time of purchase, simplifying the customs clearance and delivery process for buyers. OSS (One-Stop Shop): This is a regime that enables EU businesses to collect, declare, and pay VAT on sales of goods and services made within the EU. It simplifies tax obligations by allowing businesses to make a single VAT declaration in their Member State of identification, covering all transactions made in other EU Member States.
When can IOSS be used?If the good is imported to the EU from a non-EU country and the value of the good is less than 150EUR, IOSS can be used. VAT due will be included in the price paid by the customer and VAT on importation will be exempted. However, if the value of the goods is more than 150EUR, traditional VAT will be applied.
Where should I register for the OSS?To register for your OSS (One-Stop Shop) number, you typically need to go through the tax authority or portal of the European Union (EU) member state in which you are established or have a fixed establishment.
Do I need an IOSS if I sell on a marketplace?If you sell goods on a marketplace as a non-EU business and the marketplace is considered the deemed supplier for VAT purposes, you may not need to obtain an Import One-Stop Shop (IOSS) number yourself. Instead, the marketplace may handle the IOSS registration and VAT obligations on your behalf. The IOSS allows marketplaces to collect and remit VAT on behalf of sellers for low-value consignments (goods valued at or below €150) imported into the European Union (EU). This simplifies the VAT compliance process for sellers and ensures that the VAT obligations are fulfilled. Generally, if you sell through a marketplace that is registered for IOSS, they may take responsibility for collecting and remitting VAT on the low-value consignments you sell. The marketplace will provide you with the necessary information and documentation to ensure compliance with VAT regulations. It's important to note that the specific arrangements and requirements can vary between marketplaces. Some marketplaces may handle IOSS registration and VAT obligations for sellers, while others may require sellers to handle their own VAT compliance. Therefore, it is advisable to review the terms and conditions or contact the marketplace directly to understand their policies and procedures regarding IOSS and VAT compliance.
What is an IOSS intermediary?An IOSS (Import One-Stop Shop) intermediary refers to a third-party service provider or agent that assists businesses in fulfilling their IOSS registration and VAT compliance obligations. These intermediaries specialise in helping businesses navigate the IOSS system and ensure compliance with VAT regulations. A business which is established outside of the EU must appoint an intermediary to deal with IOSS.
Do i have to get both IOSS and OSS at the same time?No, you do not have to get both IOSS (Import One-Stop Shop) and OSS (One-Stop Shop) registrations at the same time. These are separate registration schemes that serve different purposes within the European Union's VAT system. The choice of which registration to pursue depends on your specific business activities and requirements. IOSS Registration: IOSS is primarily used for the distance selling of goods valued at or below €150 to customers in the EU. It simplifies the VAT collection and remittance process by allowing businesses to charge and collect VAT at the point of sale, rather than at the point of importation. IOSS registration is mandatory for businesses outside the EU when they opt to use this system. OSS Registration: OSS, on the other hand, is used for various cross-border B2C (business-to-consumer) supplies of services, as well as for distance sales of goods valued above €150 within the EU. It allows businesses to handle their VAT obligations in a streamlined manner, making a single VAT return and payment in their home member state, rather than registering for VAT in multiple EU member states. Depending on your business model and the nature of your sales, you may need to register for either IOSS or OSS, or both, depending on your specific circumstances.
How many VAT number do you need?Every country has their own VAT systems and hence to have its own national VAT number. When you sell from one EU country to another, if you hit the threshold of the local country, it is expected that you need to register the local VAT number.
How to check if your VAT number is valid?Each country has his own official website to check the validity of your VAT number. Of course you can still go to the VIES VAT number validation - European Commission
What to do next when you have a VAT number?Once the company has the VAT number, it can start doing business in the target country and charge VAT on every sales. VAT returns or declaration for intra-community trade have to be done regularly.
How we could help with VAT- Provide the best advice on supply and purchase which suits your business needs and growth - warehouse locations / standard of invoices / reverse charge - manage your VAT and customs issues such as VAT returns and intrastat - ensure compliance of regulations - provide training sections to your employees to ensure they are familiar with VAT process within the company - to save time and costs in business expansion on complex international tax rules
Difference with EC sales list (ESL) ?ESL is usually filled monthly or quarterly and it contains the record of sales and transfer of both goods and services of one VAT registered company in another EU country.
What's the VAT credit and VAT debit?VAT credit: VAT credit, also known as input VAT credit or input tax credit, is a mechanism that allows businesses to offset the VAT they have paid on purchases or expenses against the VAT they have collected on sales. It helps businesses avoid double taxation and reduces the overall VAT liability. VAT debit: VAT debit, also known as output VAT, is the VAT amount that businesses charge on their sales of goods or services. It represents the VAT liability of the business and is collected from customers on behalf of the tax authorities.
What is introduction and Expédition?Introduction: In the context of VAT, introduction refers to the movement of goods from one European Union (EU) member state to another. It involves the transfer of goods between EU countries and is subject to VAT regulations specific to intra-EU trade. Introductions typically occur when goods change their location within the EU, such as when they are transported from one EU member state to another. Expédition (Shipment): In the context of VAT, expédition (shipment) refers to the movement of goods from an EU member state to a destination outside the European Union. It involves the exportation of goods from the EU to a non-EU country. Shipment transactions are subject to VAT rules governing exports and may involve customs procedures and documentation to ensure compliance with both VAT and international trade regulations.
Does Global Trade Business provide GST services?We do! We also offer GST registration and GST return services in Australia and Singapore. The specific requirements for obtaining a GST number can vary depending on the country or region where you are conducting business. Here are some common scenarios where you may need a GST number: Business Registration: When starting a business that is required to collect and remit GST, you typically need to register for a GST number. This applies to businesses that meet the turnover threshold specified by the tax authorities. Threshold Exceedance: Once your business reaches or exceeds the turnover threshold set by the tax authorities, you are required to register for a GST number and start collecting and remitting GST on your taxable supplies. Interstate Trade: If you engage in trade or supply goods or services across different states or regions within a country with a GST system, you may need to obtain a GST number. E-commerce and Online Selling: Many countries have introduced specific rules and regulations for e-commerce businesses. If you sell goods or services online, you may be required to register for a GST number, regardless of your turnover. Import and Export: Some countries require businesses engaged in importing or exporting goods to obtain a GST number for customs and tax purposes. Voluntary Registration: Even if your business does not meet the mandatory registration requirements, you may choose to voluntarily register for a GST number. This can allow you to claim input tax credits on your purchases and avail other benefits provided by the tax system.