Changes in EU VAT legislation as of July 2021
The Import One Stop Shop system for consumer sales of imported goods from outside the EU with an intrinsic value of up to 150 euros
There will be a new system for entrepreneurs who import goods from outside the EU. If, as an online trader, you import goods from outside the EU with an intrinsic value of up to 150 euros, you can use the IOSS ("Import One Stop Shop") system. This ensures that you only have to file a sales tax declaration in the country of arrival (usually the country where your business is based). The import itself is exempt from sales tax.
Like the OSS, the IOSS is not mandatory, but if you do not apply it, the import will be subject to sales tax. The online seller can then collect the import sales tax from the person for whom the goods are destined, often this will be done by the parcel delivery person.
As a company based outside the EU you need an Agent who will register and file the IOSS returns on your behalf. The Agent is not a Fiscal Representative.
Kennispunt can take care of your IOSS registration and returns so you can be able to sell in the EU without physical presence.
Contact us for more information
Distance sales in Europe
The distance selling arrangement explained:
The main rule is that for B2C sales the destination country principle applies. In order to make things a little simpler for small entrepreneurs and start-ups, the distance selling scheme has been introduced. Up to the threshold, you may declare sales in your own country. If you exceed the threshold of €35,000 or €100,000 (GBP70,000) in Germany, the Netherlands, Luxembourg and the UK, you must register for sales tax in that country and from that moment on submit sales tax returns.
If you do not comply with this obligation, you can be prosecuted for tax evasion, both in the country where you should have registered and in the country of residence, this is a legal requirement in all EU countries. All Member States also work closely together in these countries.
Do you have a sales tax registration in multiple countries then it may be interesting to opt out of the threshold. For example, if you use the Amazon warehouse in Poland, because you get a discount of € 0.50 per delivery; if you deliver a lot to German customers from this warehouse and you have a German registration number anyway, then opt out, you will have an extra margin of 4% on the first € 100,000 turnover (difference in tax rate between Poland and Germany).
Kennispunt VAT solutions will be happy to advise and guide you on these challenging issues. If you have any questions about the above or if you would like to know more, please contact us.
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