EU VAT collection

Learn about how the Shipping API supports European Union (EU) VAT collection.

EU Import One-Stop Shop (IOSS)

From 1 July 2021 onwards, all commercial goods imported into the EU from a third country or third territory will be subject to VAT irrespective of their value.

info

Information about the VAT rates in the EU is available on the European Commission website and on the websites of EU national customs/tax authorities.

The IOSS is the electronic portal that online sellers outside the EU can use to calculate and collect VAT from their customers at an online checkout and declare and pay it directly to EU tax authorities. Although using the IOSS is not mandatory, it might be the most convenient way to manage this new VAT obligation.

Note

If your business is not located in the EU, you will normally need to appoint an EU-established intermediary to fulfil your VAT obligations under the IOSS.

IOSS scope

The IOSS covers business to consumer (B2C) distance sales of goods that are

Dispatched or transported from outside of the EU at the time they are sold.
Dispatched or transported in consignments with a value not exceeding EUR 150.
Not subject to excise duties, so the IOSS does not apply to alcohol or tobacco products.

However, you do not need to charge VAT on distance sales of goods to EU consumers if:

You sell several goods to the same buyer and these goods are shipped in a package amounting to more than EUR 150. These goods will be taxed at importation into the relevant EU member state.
Your distance sales of goods are facilitated by an electronic interface, such as a marketplace or platform. In this situation, the electronic interface is responsible for the VAT due.

IOSS numbers

If you want to make use of the IOSS, you will have to do one of the following:

Get your own IOSS number if your business makes only direct sales to EU consumers.
Or use the IOSS number of any electronic interfaces that you use if your business makes only marketplace or platform sales to EU consumers.
Or do both of the above if your business makes both direct and marketplace/platform sales to EU consumers.

Before getting an IOSS number

Before you can get your own IOSS number, you must first determine whether you can register for an IOSS number directly or indirectly. The method that you can use will depend on whether your business has any physical operations in any EU member state.

IOSS registration method	EU-established online sellers	Non-EU-established online sellers
Direct	You can register for the IOSS in the EU member state where your business is established. An EU-established online seller can also choose to appoint an intermediary to represent it for the purpose of the IOSS, but this is not mandatory.	You can register directly only if: Your business is established in a country with which the EU has a VAT mutual assistance agreement. The goods are supplied from that country to the EU. If you meet both of these conditions, you can register directly in the EU member state of your choosing.
Indirect	(Not applicable)	In most cases, you must register for the IOSS indirectly through the appointment of an intermediary that you have appointed to represent you, and the EU member state of the registration will be the member state where the intermediary has established its business.

Each online seller that wants to make use of the IOSS needs to have only one IOSS number.

If an online seller sells goods through marketplaces or platforms that are also IOSS-registered, the IOSS number of the electronic interface used for a transaction should be used for any shipments relating to that transaction.

Getting an IOSS number

To get an IOSS number for your business:

Go to the website of the tax authority of an EU member state and find the IOSS/VAT OSS registration section (example: Ireland ). The tax authority website that you select depends on whether you must register for IOSS indirectly or you have the option to register directly.
Select direct or indirect registration, as applicable.
Provide details about your business.
Provide details about any previous VAT OSS tax reference numbers assigned to your business.

After registration, you will be issued an IOSS identification number, which is valid for all distance sales of imported goods made to buyers in the EU.

warning

You should keep your IOSS number confidential.

IOSS-related API parameters

For the IOSS, the Shipping API supports capturing the following values (all at consignment level).

Parameter	Description
`IOSSNumber`	The IOSS number of a consignment. For direct sales to EU consumers, this number will be the IOSS number of your business. For sales to EU consumers that involve a marketplace or platform, this number will be the IOSS number of the relevant electronic interface.
`shippingCharge`	The cost of shipping a consignment to the recipient.
`insuranceCharge`	The insurance charge applied to a consignment.
`otherCharge`	The handling or related charge applied to a consignment.

The charge parameters are included because the new EU VAT e-commerce obligations require online sellers to break down shipping costs.

An IOSS number should be supplied only for applicable shipments. It must be provided at consignment level, not at account level. If carriers require IOSS information at parcel level, the IOSS number of a consignment will be applied to each parcel in that consignment.

From 1 July 2021 onwards, the absence or presence of an IOSS number in the details of a shipment will probably be significant for most carriers:

The presence of a valid IOSS number will generally be regarded as a declaration that VAT has been collected and that the IOSS will be used to pay VAT to the relevant tax authority.
The absence of an IOSS number might be regarded as an indicator that VAT should be collected at the point of import into the EU.

warning

Metapack will not validate any IOSS numbers or check the EUR 150 IOSS threshold. If a carrier validates an IOSS number, it might check only the minimum length of the number.