The EU has removed small consignment relief, meaning items coming from outside the EU are subject to VAT.
The EU Import One-Stop Shop (IOSS) scheme has been designed for e-commerce sellers who don’t have a registered office in the European Union (EU). The IOSS programme allows sellers to collect, declare and pay the relevant VAT to the tax authorities. This negates the need for the customer to have to pay VAT charges by the VAT border authorities.
There’s good news, the IOSS scheme determines marketplaces like Amazon, eBay, etc. as ‘suppliers; and it is their responsibility to charge and collect VAT at the point of sale.
In essence, when a buyer on Amazon or eBay go to buy your product in the EU, your list price will remain the same, but the EU VAT will be added at checkout by Amazon, eBay, etc. Unlike the old scheme where you collected the VAT as part of your selling price, Amazon will now withhold the VAT added at checkout and pay the tax authority the correct VAT fees, making things much simpler as the seller.
This new IOSS scheme ensures your customers won’t get stuck with unexpected VAT charges on items shipped from outside the EU.
Remember the IOSS programme is designed for sellers who don’t have a registered office in the EU, don’t store products in the EU and don’t use Amazon FBA in the EU.
If you have additional questions about IOSS, please feel free to call our VAT compliance team on +44 (0) 208-004-1160 in the UK, ++1 (714) 782-7000 in the USA or simply email us at query@MyVATdirect.com.
About My VAT Direct Ltd
My VAT Direct is a bespoke VAT registration, fiscal representation, calculation and filing service specifically designed to assist Amazon Sellers and e-commerce merchants who desire the benefits of cross-market selling without the worry of tax compliance in foreign markets.
My VAT Direct is comprised of knowledgeable and experienced tax experts, who for 10+ years have helped e-commerce sellers enjoy the selling opportunities a mass market can provide.
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