What Is an IOSS Number and Who Needs One?

The Import One-Stop Shop (IOSS) is an electronic system introduced by the European Union (EU) on July 1, 2021, as part of broader e-commerce Value Added Tax (VAT) reforms, established to streamline VAT collection on goods imported into the EU. Its general purpose is to simplify compliance for businesses selling to consumers in EU Member States, ensuring that VAT is collected at the point of sale rather than at customs. The IOSS aims to make cross-border e-commerce more efficient and transparent for both sellers and buyers.

Core Concept of the IOSS

The IOSS functions as an electronic portal that enables businesses to fulfill their VAT obligations for distance sales of imported goods to buyers located within the EU. Its primary goal is to simplify the declaration and payment of VAT for consignments with an intrinsic value of €150 or less. All goods imported into the EU are now subject to VAT.

This system allows VAT collection directly by the seller at the point of sale, eliminating the need for the buyer to pay VAT upon delivery. The intrinsic value of the goods, the selling price excluding transport and insurance costs, is used to determine if the €150 threshold is met. By centralizing VAT reporting, the IOSS significantly reduces administrative burden, as they can register in one EU Member State to manage VAT for sales across all 27 EU countries.

Applicability and Responsibilities

The IOSS scheme applies to business-to-consumer (B2C) sales of goods imported into the EU, where the intrinsic value of the consignment does not exceed €150. This includes online mail-order sellers and electronic interfaces like online marketplaces that facilitate these sales. The responsibility for collecting the VAT at the point of sale and declaring it via IOSS typically rests with the seller or the online marketplace facilitating the transaction.

If an online marketplace is involved, they are often considered the “deemed supplier” for VAT purposes, responsible for collecting and remitting the VAT. This rule applies if the marketplace directly or indirectly sets the terms of supply, is involved in authorizing payments, or participates in product delivery. Consequently, sellers who exclusively use such marketplaces may not need their own IOSS registration, as the marketplace assumes the VAT reporting obligation.

The IOSS Process in Practice

Once a seller or marketplace has registered for the IOSS, the system applies at checkout. The Value Added Tax (VAT) is added to the purchase price, and the total amount, including VAT, is displayed to the buyer. The specific VAT rate applied is determined by the EU country where the goods will be delivered.

Following the collection of VAT, the IOSS identification number plays a role in the shipping and customs declaration process. This number must be provided to the delivery service and included on the package or transmitted electronically to customs authorities. By presenting the IOSS number, the goods are expected to clear customs without the buyer incurring additional VAT charges upon delivery. This streamlined process ensures faster customs clearance and a more transparent experience for the consumer.

Registering for an IOSS Number

Businesses seeking an IOSS number must register in an EU Member State. Non-EU businesses need to appoint an EU-established VAT intermediary. This intermediary is responsible for fulfilling the business’s VAT obligations, including filing IOSS returns and making VAT payments. While the VAT liability remains with the seller, the intermediary ensures compliance with EU tax laws.

The registration process requires providing business identification details such as the company name, registration number, address, and a valid tax identification number (TIN). Information regarding the types of goods sold and sales channels may also be requested. Upon successful registration through the chosen Member State’s IOSS portal, the business receives an IOSS identification number.