What is an IOSS Number?
The IOSS number, also known as the Import One-Stop Shop, is designed to make business and VAT transactions easier. To facilitate international trade, all products providers may be required to register for an IOSS number.
This site is for dealers looking to trade abroad to European countries, or those who are currently doing so. You should be aware that in order to do trade in a more streamlined manner on the European continent, you must now pay VAT and other taxes.
The IOSS number is used to pay and declare VAT, and it can be used by sellers from inside or outside of Europe. Now you’re probably wondering why you should get an IOSS number and join the IOSS scheme. In this blogpost, we will go over the IOSS figures and the different benefits they provide to your firm.
How Does IOSS work?
- Sellers in European nations who are registered for an IOSS are charged VAT and must pay VAT at the rates applicable by the country to which the products are transported. The rates may be validated on the European Commission’s website.
- In the case of e-sellers, VAT is charged on the customer rather than the sellers, and VAT rates are to be applied based on where the items are delivered. The information may be obtained at the EUROPEAN COMMISSION’s website.
Example Of IOSS Number
The digital storefront has an IOSS identifier, so when you buy a product, you contribute VAT to Sweden at the very same time. The shipping provider will send you a departure notification, and your transaction must be acknowledged.
The shipping firm hasn’t immediately identified your package on your account or hasn’t gotten all of the information required for passport control from the web retailer, for instance.
Example: FR 275815987
Let us explain the example properly now, the initial letters that you see in the above example, specify the nation whereby the package is being sent, as well as the percentage of VAT that must be charged. The accompanying numbers suggest the product’s destination as well as other transportation details.
Further letters will most probably be included in the IOSS numeric format to distinguish it from goods refers to sending through DDP payment systems. It will be able to get it through formalities quickly as a result of this.
How To Register For An IOSS Number?
To register an IOSS number, there are two categories:
- If you are within the European countries, then you can directly apply for it, or you can choose an intermediary to help you with that. The intermediary will keep a check on you and see if you are sticking to the rules related to IOSS.
- If you are not within the European countries, you are left with only one option that is to opt for an intermediary and file the necessary information. And the intermediary will keep a check on you.
In both cases, the country will appoint you with an IOSS number, and if you are applying through an intermediary, then the IOSS number will be given to the intermediary that is representing you.
If an intermediary is representing multiple people, then he will be appointed multiple IOSS numbers, i.e., one IOSS number per person. The authorities in Pescara will review your application and, once satisfied, will mail you the further details.
In both cases, for an individual to go and register, it gets extremely tricky and technical as it involves lots of technicalities and procedures. And if you do not apply for an IOSS number, then you have to pay extra costs (customs duty) every time you import/export something.
So, to avoid both of these situations, it is better to opt for companies who offer you the service of registration for an IOSS number to streamline the process and save your time and money.
How should you utilize your IOSS Number?
You must complete a variety of tasks after registering for the IOSS in order to benefit from the system.
- Get VAT on all products that qualify.
- Give customs officials your IOSS number.
- Regularly send IOSS VAT receipts and settle any owed VAT to the appropriate European nation.
- Maintain proper documentation for a minimum of ten years.
- Show the buyer’s owing VAT sum in a straightforward manner.
Benefits Of The IOSS Number
- It provides dealers multiple benefits that will not only help them conduct trade seamlessly but will also help them cater to more people.
- It helps you to pay VAT which in turn gives you many benefits from the companies and government itself.
- IOSS is a 12-digit alphanumeric code that benefits you and your customers as well.
- It will charge VAT based on the customer’s state at the time of sale. Thus, leaving them with fewer formalities and fewer taxes. They would just have to pay VAT at a single time, protecting them from any further import taxes or duties.
However, if the seller isn’t registered in the IOSS scheme, then the customer will not just have to pay the VAT, but other taxes and duties as well such as customs clearance and thus will make the importing process costly and time-consuming.
Read More: Benefits Of IOSS Number
Thus, getting yourself registered in the IOSS scheme as a seller is a huge benefit that one should not let go of. For registering, if you are from within the European country, then you can register directly for it or go with an intermediary for the same.
If you are someone from outside the European countries, then the only option you have is to go with an IOSS intermediary for the registrations. Whatever you wish to choose, members of ODINT Consulting are here to make the process easier for you.
Considerations To Make For An IOSS Number
While IOSS numbers are attempted to make Customs duties VAT costs and reimbursements smoother, there are a few points to keep in mind before enrolling, they are as follows:
- Placement: Companies must apply with an IOSS intermediate if they are located beyond the EU and do not have the extensive infrastructure in any EU nation. The EU requires that you select an administrator to handle your IOSS contributions and ensure that you comply with your IOSS responsibilities.
- Enrolment: IOSS is primarily developed for e-commerce and trading platform transactions, therefore you’ll evaluate what it has to provide your company based on your requirements.
- IOSS number for the consumer market: Information-based transactions, such as amazon, will have varying paperwork about how the restrictions would influence your company. Verify with any electronic medium connection you use to offer commodities to determine if they provide an IOSS number to businesses on their network or if you must register separately.
- Differences in VAT: When you distribute to EU clients in numerous nations, you might have to explain variation in VAT income taxes. This is occasionally offered by the community, including Online stores, although vendors are encouraged to double-check.
What is the format of the IOSS VAT Identification Number?
Twelve (12) alphanumeric letters overall, in the structure of IMxxxyyyyyyz, make up the IOSS VAT Identification Number.
Here,
- The member country’s identifying code, which is a 3-digit ISO number, is xxx.
- yyyyy is the six-digit number that has been allocated by the member country .
- z is a check digit.
Exceptions To VAT
There are a few exceptions to the VAT to be levied:
- You are exempted from collecting VAT in the cases where you have been delivering multiple goods to the same buyer, and the value of such a package costs more than 150 Euros. But these goods will be subject to taxation in the state where it is received.
- You sell goods under a marketplace or electronic platform. In this case, the electronic interface is subjected to collect VAT and not the marketplace.
What if I fail to get an IOSS number?
Failing to register for an Import One-Stop-Shop (IOSS) number or utilizing an IOSS intermediary will result in the absence of an allocated IOSS number. Consequently, your package is likely to be dispatched using a delivery duty unpaid (DDU) shipping method. In this scenario, the courier bears the responsibility of paying the import Value Added Tax (VAT) on behalf of either the seller or the buyer, facilitating the shipment process. Alternatively, there’s an option for delivery duty paid (DDP) shipping, but this necessitates a specialized agreement involving the buyer, seller, and the logistics company or courier acting as a customs declarant.
Nevertheless, the VAT invoice will be directed to the recipient, often accompanied by an additional administrative charge, which can manifest as either a prepayment fee or a disbursement fee. Consequently, there’s an increased likelihood of customs delays as pending VAT payments or fees are being managed. Optimal post-purchase satisfaction for customers is achieved through IOSS implementation due to its provision of expedited delivery times. Furthermore, in contrast to handling multiple VAT payments when dispatching goods to various European Union (EU) customers, the IOSS streamlines this process by consolidating EU-wide payments into a solitary monthly statement submitted to a singular tax authority or intermediary.
Conclusion
The IOSS number is termed as an import one-stop-shop. It is formed to make trading effortless and provide benefits in terms of lower customs taxes and costs. Not just this, an IOSS number helps in uniform trade practice in the European Continent.
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FAQ’s
You can look for it in the order confirmation email or the invoice the items’ seller issued you, or you can ask the vendor for it directly.
It is to be noted that having an IOSS number is not mandatory. It is there to make the trade easier for you and to cost you less. However, if you still want to go with the old rules, you can do that. But then you have to pay for the customs as well. Having an IOSS number helps you to trade easily in all the 27 countries of the EUROPEAN CONTINENT with just one number.
There are a few changes, such as now the IOSS number is a 12-digit alphanumeric number, unlike the old VAT number, which is a nine-digit alphanumeric number.
Yes, it is very much true. No IOSS number can be used for any other business or by any other unofficial person.
IF you work at a marketplace such as Shopify, Flipkart, or amazon, then most probably your marketplace will give you your IOSS number. It is not your responsibility to have your IOSS number. It is the marketplace’s responsibility.
it depends on three things,
- If you are delivering the goods through IOSS, then yes, you have to collect VAT and show it as well.
- If you are delivering goods directly to the place, then no, you do not have to charge VAT as the customer has to pay the VAT before collecting the goods.
