{"id":30299,"date":"2021-06-16T15:31:24","date_gmt":"2021-06-16T20:31:24","guid":{"rendered":"https:\/\/www.shipstation.com\/?p=30299"},"modified":"2025-02-10T06:52:44","modified_gmt":"2025-02-10T12:52:44","slug":"ioss-vat-taxes","status":"publish","type":"post","link":"https:\/\/www.shipstation.com\/blog\/ioss-vat-taxes\/","title":{"rendered":"How the IOSS and Recent Changes to VAT Costs Impact Shipments to the EU"},"content":{"rendered":"\n

Effective July 1st, 2021, value-added taxes (VAT) will apply to orders valued at under \u20ac22. Because this additional fee can become a make-or-break deciding factor for customers placing orders with international merchants, the Import One-Stop Shop (IOSS) is now available. The IOSS allows merchants to pay the value-added taxes on orders valued at up to \u20ac150, not just those valued at under \u20ac22. <\/span><\/p>\n

What is a Value-Added Tax (VAT)? <\/span><\/h2>\n

A value-added tax (VAT) is a tax applied to a product whenever value is added at any stage in the supply chain\u2014from production to the point of sale. So, a VAT can be applied if raw material imports to be turned into another product that is then sold internationally. One way to look at it is an import country charges the exporter or customer for any manufacturing or commerce that could have hypothetically been done domestically. The cost of the VAT that is paid is based on the cost of the product, minus any of the costs of materials used in the product that has already been taxed. <\/span><\/p>\n

What is the IOSS?<\/span><\/h2>\n

The IOSS (Import One-Stop Shop) allows suppliers and merchants selling imported goods to customers 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 as it was previously the case (for products over 22 EUR). You can use the IOSS to cover VAT fees for consignments of up to \u20ac150.<\/span><\/p>\n

If you do not use the IOSS, your customers WILL pay the VAT upon delivery. <\/span><\/p>\n

What are the advantages of the IOSS?<\/span><\/h2>\n

The IOSS<\/a> simplifies the collection, declaration, and payment of VAT (value-added taxes) for orders originating outside of the EU imported to buyers residing within the EU. The IOSS also makes the shipping process easier for the buyer. Now, they are only charged at the time of purchase, and therefore does not have to face any surprise fees when the goods are delivered. <\/span><\/p>\n

If the seller is not registered in the IOSS portal, the buyer WILL pay the VAT and, usually, a customs clearance fee charged by the transporter.<\/span><\/p>\n

What is Covered by the IOSS? <\/span><\/h2>\n

The IOSS covers the sale of goods from a distance that are:<\/span><\/p>\n