The Import One-Stop Shop (IOSS) is the electronic portal businesses can use since 1st July 2021 to comply with their VAT e-commerce obligations on distance sales of imported goods.
When this scheme is used, the seller will charge and collect the VAT at the point of sale to EU customers and declare and pay that VAT globally to the Member State of identification in the Importers One-Stop Shop (IOSS).
It facilitates collection, declaration, and payment of VAT for sellers that are making distance sales of imported goods to the buyers in the EU.
Therefore, in this case the Seller will be treated as Importer of Record.
IOSS covers the following types of transactions for sale of goods from distance:
1) Goods dispatched or transported from outside of the EU at the time they are sold.
2) Consignment’s value is not exceeding 150 Euros even if Item contains more than 1 Item.
1) Sellers registered in the IOSS need to apply VAT when selling goods destined for a buyer in an EU Member State.
2) The VAT rate is the one applicable in the EU Member State where the goods are to be delivered.
3) Under this scheme, consignment value of goods not exceeding 150 Euros will no longer incur Import VAT or Import Duty at the time of goods entering EU Member State from Non-EU Member State (E.g., GB).
- Seller sells several goods to the same buyer, and these goods are shipped in a package amounting to more than 150 Euros. These goods will be taxed at importation in the EU Member State.
1) In Business Central, orders which are shipped with ‘Goods Value’ of more than 150 Euros should not charge VAT for sales made to B2C Customer present in EU Member State.
2) In Shipping Method Code, new shipping method DDP should be added and should be selected on Sales Orders.