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IOSS 101: One way payment to all EU’s VAT

IOSS stands for import one-stop shop; it is an e-commerce-related obligation on imported goods and foreign sales. It has been regulated under the European Union since 1st July 2021. Before establishing the IOSS, Import value-added taxes were only payable if the imported goods had a value of 22 Euros. But since 1st July 2021, this rule gets superseded by the new IOSS procedure, where it is necessary to pay VAT for all commercial goods imported into the European Union territory from any other outside country. This new procedure lets the foreign exporting suppliers pay the vat through an online interface before exporting any of their goods on consignment to the European territory. Now let’s move forward and learn more about the implications of this new activity.

Advantages of IOSS

The implication of IOSS has been very helpful to both buyers and long-distance sellers. Buyers do not face any surprise fees when they receive the imported product because the seller has already paid the taxes to the European authorities before sending the goods overseas. But if the seller decides not to be a part of IOSS, then the buyer may, upon receiving the imported product have to pay customs. IOSS also made the earlier process of paying taxes less complicated for sellers as they now only need to pay a VAT for all European exports, instead of paying loads of taxes. Though, if the imported product is worth more than 150 Euros, then IOSS will not apply.

How to register for it?

Since April 2021, the official IOSS site of each EU state let sellers register their identification and pay vat taxes directly on the platform. But if the seller does not hail from the EU, then he will need to appoint an intermediary to complete their vat obligations under IOSS. Similar to sellers, electrical interfaces can also opt for an IOSS registration on any other EU state IOSS sites. The IOSS registration will only be counted as valid if the seller started exporting goods to the EU territory on 1 July 2021.

How does it work?

Sellers who are registered in the IOSS need to pay VAT, on products that they are exporting to the EU area. Different EU states have different regulations for exportation VAT rates. All the information about different VAT rates is available on the official EU site. On the other hand, electronic interfaces need to pay the VAT due on sale by the buyer’s end. After paying the VAT and providing the tax authorities with details regarding custom clearance, then the government sends an authorized notice for sellers and electronic interfaces to continue their business in the EU.


European unions are a large and growing economy. Sellers establishing business relations with EU buyers are taking a great initiative towards mutual profits. But the government keeps an eye out for all the current trends and business affairs. Now, the first step towards the new taxation policy is IOSS, which is very efficiently designed to charge taxes on every good imported into the EU. It is said to be the next-level taxation policy in the whole EU territory.

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