The Importance of IOSS Registration and Guidelines for Applicable Sellers

Since the EU tax reform, “IOSS” (Import One-Stop Shop) and “OSS” (One-Stop Shop) have become important terms in the field of cross-border e-commerce. Although there is only one letter difference between the two, their applicable objects and scope are significantly different. IOSS is mainly used to import goods from non-EU countries, while OSS targets merchants selling products in countries within the EU.

Who needs to register for IOSS?

According to the latest tax reform regulations, the following types of sellers need to register for IOSS:

1. E-commerce platform sellers: Such platforms, such as Amazon and eBay, need to withhold and pay value-added tax (VAT) for their merchants.
2. Independent website sellers: Merchants who do not rely on e-commerce platforms and do not register companies in the EU, ship goods by themselves or operate independent websites also need to register for IOSS. Such sellers must manage their own VAT returns.

In addition, although IOSS and VAT are both value-added tax services, sellers can only register for IOSS without VAT in some cases. For example, this rule applies when the net value of the goods does not exceed 150 euros and the sale is from a business to an individual.

Registration requirements for independent website and overseas warehouse sellers

For independent sellers who do not rely on platforms, VAT compliance becomes particularly important. The implementation of tax reform means that goods that were not subject to tax in the past must also pay value-added tax in accordance with regulations, so registering for IOSS has become an urgent task.

• Independent sellers using overseas warehouses: Regardless of the value of the goods, it is recommended to register for VAT in the country where the EU inventory is located. During the customs clearance process, sellers need to use their own VAT number to pay import VAT. If subsequent sales exceed the unified threshold of 10,000 euros, in addition to registering the necessary VAT, you can also choose to register for OSS to simplify tax declarations in various countries.

• Independent sellers who ship by themselves:

  • If the value of the goods does not exceed 150 euros, registering with IOSS can ensure fast customs clearance.
  • If the value of the goods exceeds 150 euros, it is recommended that the seller register for VAT and follow the corresponding customs clearance process.

Advantages of using IOSS

By registering for IOSS, sellers can enjoy the following advantages:

1. Simplified logistics process: Using IOSS can effectively simplify VAT declaration, allowing goods from non-EU countries to circulate freely in EU member states, abandoning the traditional customs clearance process.

2. Quick Settlement: IOSS allows goods worth less than 150 euros to enjoy faster customs clearance when imported, improving customers’ product arrival experience.

3. Reduce return rates: Buyers do not need to pay additional VAT and customs clearance fees after importing goods for which they pay a tax-inclusive price, thereby improving the customer’s shopping experience and reducing the occurrence of returns.

To sum up, registering with IOSS is an important and necessary compliance measure for all types of sellers, especially enterprises engaged in cross-border e-commerce, to ensure smooth business operations and improve customer satisfaction.