All About IOSS – Import One Stop Shop Regime: Registration, Information, and Benefits

What is Import One Stop Shop (IOSS) Regime?

As of July 1, 2021, the VAT rules for cross-border B2C e-commerce activities underwent significant changes, addressing the challenges of cross-border online sales of goods by optimizing the application of VAT regimes across all EU member states and imports of low-value shipments. This article focuses on the import aspect, highlighting the new special regime for distance sales of low-value goods imported from third territories or countries, known as the Import One Stop Shop (IOSS). We will discuss the obligations of online retailers and the requirements for applying this regime.

Supplies and Goods Covered Under the Special Import Regime (IOSS)

To benefit from this regime, the goods sold within the EU must cumulatively meet the following criteria:

• Distance sales of goods imported from third countries or territories, with the place of supply within an EU member state, including Bulgaria.
• The goods are dispatched/transported from a third territory or country at the time of supply.
• These goods are shipped in consignments with a total intrinsic value not exceeding 150 EUR.
• The goods are transported or dispatched by the supplier or on their behalf, including indirect involvement of the supplier in the transport or dispatch of the goods, from a third country or territory to the recipient in an EU member state.
• The goods are not new vehicles, goods that require installation or assembly by or on behalf of the supplier, or goods subject to the special margin scheme for second-hand goods, artworks, collectors’ items, and antiques.
• The goods are not subject to harmonized excise duties within the European Union (typically alcohol or tobacco products as per Article 2, paragraph 3 of the VAT Directive).

It’s important to note that the special import regime cannot be used when low-value goods are purchased and/or dispatched together with excise goods, regardless of whether the consignment value exceeds 150 EUR or not.

Distance sales of goods imported from Third Countries or Territories must be made to a Client in an EU Member State who Is:

•  A taxable person or a non-taxable legal entity not obligated to account for VAT on the intra-community acquisition of goods in the member state where the transport ends, or
• Any other non-taxable person.

IOSS Registration

Merchants can register online through the IOSS portal in any EU member state. If the merchant is not established in the EU, they must appoint an EU-established intermediary to fulfill their VAT obligations under the IOSS.

Registration for the special import regime is possible for all distance sales of goods imported from third countries or territories to buyers/end consumers in the EU. For Bulgaria, registration for the special import regime and intermediary registrations are integrated into the Bulgarian National Revenue Agency’s electronic services portal.

To register for the distance sales regime of goods imported from third countries or territories, a taxable person registered under Article 96 or Article 100, paragraph 1 of the VAT Act must meet the following conditions simultaneously:

1. Imports goods from third countries or territories in consignments with a total intrinsic value not exceeding the equivalent of 150 EUR, excluding excise goods, for non-taxable persons established, with a permanent address or usual residence in a member state, including Bulgaria. Note that all goods sent in one consignment should not exceed the equivalent of 150 EUR. If you send two items, each costing 80 EUR, but in one consignment, you will be in violation of this condition and unable to apply the regime. In such a case, the goods will be taxed upon importation into the EU member state, and you will not be obligated to account for VAT at dispatch.

2. The taxable person:
3. a) Is established with its registered office and address of management within Bulgaria, or
4. b) Is not established with its registered office and address of management within the EU but has a permanent establishment within Bulgaria, or
5. c) Is not established with its registered office and address of management within the EU but has a permanent establishment both within Bulgaria and another member state, and is not registered for this regime in another member state, or
6. d) Is not established with its registered office and address of management or permanent establishment within the EU and is not registered for this regime in another member state, if established in a third country with which the EU has a mutual assistance agreement comparable in scope to Directive 2010/24/EU and Regulation (EU) No 904/2010, and imports goods from this third country;

3. There is no restriction on registration under paragraph 18 of the VAT Act.

Intermediary for registration purposes when the Merchant is not established in the EU

To register as an intermediary and fulfill the obligations under the regime, the person must meet the following conditions simultaneously:

1. Acts as an intermediary on behalf of and for the account of the taxable person under paragraph 1, including managing an electronic interface, fulfilling the obligations set forth in the regime;

2. The person:
3. a) Is established with its registered office and address of management within Bulgaria, or
4. b) Is not established with its registered office and address of management within the EU but has a permanent establishment within Bulgaria, or
5. c) Is not established with its registered office and address of management within the EU but has a permanent establishment both within Bulgaria and another member state, and is not registered for this regime in another member state;

3. There is no restriction on the registration of an intermediary acting on behalf of and for the account of a taxable person due to systematic non-compliance with the intermediary’s obligations related to the application of the regime for distance sales of goods imported from third countries or territories, valid for 24 months after the month in which the registration under the regime was terminated;

4. Is not in liquidation or declared bankrupt and has no due and unpaid tax obligations and social security contributions collected by the National Revenue Agency.

After successful registration, the intermediary receives a VAT identification number for IOSS for each taxable person they represent.

Information and deadlines for submitting sales under the special import regime (IOSS)

• Provide the necessary information for customs clearance in the EU, including the VAT identification number under the import regime to the person declaring the goods at the EU border.
• Specify the amount of VAT payable by the customer in the EU at the latest by the time of order completion.
• Ensure the collection of VAT from the buyer upon delivery of all eligible goods destined for an EU member state.
• Ensure that eligible goods are dispatched in consignments not exceeding the 150 EUR threshold.
• Indicate the price (tax base and VAT due for the delivery) paid by the buyer in euros on the invoice.
• Submit an electronic monthly VAT return via the import regime portal of the member state where you are identified for the import regime.
• Make monthly VAT payments declared in the VAT return for the import regime to the member state where you are identified for the import regime.
• Keep records of all eligible sales and/or facilitated sales for 10 years.

Need Assistance with IOSS?

We at AccountingV.com have extensive experience in servicing clients under the IOSS regime. We offer a full range of services for registration, subsequent changes, and processing. Contact us to discuss your case at the provided contacts.