The IOSS scheme was designed for the sale of “low value” goods (not exceeding 150 EUROS) from outside the EU to EU buyers.
Normally, shipments from non-EU countries with a value of less than 22 EUROS are exempt from VAT.
The new VAT e-commerce rules will remove this provision as of July 1, 2021. Therefore all shipments to the EU from a third country will be subject to VAT.
This VAT change affects imported goods, so it directly affects businesses based outside the EU.
Companies outside the EU may choose to seek an IOSS representative, or follow the more traditional route of using customs.
The IOSS process is to charge and collect VAT at the point of sale on products under 150 euros, when selling to EU customers.
Is IOSS advantageous for my ecommerce?
IOSS is advantageous for both online businesses and their customers. Your products will be treated with “VAT exemption” upon arrival at customs, which means that they will pass through customers very quickly and reach your customer sooner. No withholding tax!
In case you do not register with IOSS you should be aware that for any goods you sell in the EU with a value of less than 150 euros, the customs broker will collect the VAT from the buyer and pay it to the government. This means that your customer must take responsibility and will have to pay a fee to accept the shipment.
This creates an annoyance on the part of the customers who have to pay extra costs for a product that they have already paid for in advance. Subsequently the customer will complain directly to your company and in the worst case scenario will not buy from you again.
Crossborderit (CBIT) can be your IOSS representative to change that and in addition to that CBIT offers DDP solutions that can help you show your customers the destination cost, collect the money and pay it on their behalf.
Find out how Crossborderit can help you with IOSS by visiting the link below: Crossborderit.com