Important changes to EU VAT rules for B2C Online Sellers from 1 July 2021

From 1 July the European Union will be introducing a number of wide-ranging VAT reforms and changes covering both the distance sales of goods and B2C services.

When shipping to the EU from the United Kingdom after 1 July, you will need to be aware of how they may affect you:

What are these changes?

  • The €22 value added tax ( VAT) exemption on goods imported to the EU will be removed. This means that all goods regardless of value will now be subject to VAT
  • The introduction of the Import One Stop Shop (IOSS) to facilitate and simplify the declaration and payment of VAT for distance sales of imported goods with a value not exceeding €150


What is the Import One Stop Shop?

The Import One Stop Shop (IOSS) is the electronic portal businesses can use from 1 July 2021 to comply with their VAT e-commerce obligations on distance sales of imported goods. By registering for IOSS, no VAT will be applied and charged when the parcels arrive at the EU customs facility, speeding up the release into free circulation of the goods to your customer.

What are the benefits of registering for the Import One Stop Shop (IOSS) for my online sales?

The IOSS facilitates and simplifies the collection, declaration, and payment of VAT for your online sales to your EU customers. It covers the purchase of goods made by a buyer within the EU and for goods valued at less than €150.

What does having an IOSS registration involve?

You will need to:

– Provide your IOSS registration number to Adstral so that this can be included in the electronic customs data file we submit to courier and postal services

– Charge and collect the correct amount of VAT at the time of purchase to the buyer (i.e. the correct VAT amount for the Member State in which your customer is located)

– Apply this only to goods with a purchase value up to €150

– Ensure you comply with the accounting obligations of the scheme.

Where can I find out more about these changes?

The European Commission has published some useful guidance regarding the new VAT rules here.