New VAT Rules for E-Commerce in the EU
As of July 1, 2021, the European Union (EU) has implemented significant changes to its Value Added Tax (VAT) regulations. All businesses doing distance selling across borders to EU countries and those exporting directly to EU consumers will be affected.
Because low-value goods up to €22 were exempt from VAT, there were abuses, and some states lost tax revenue as a result. From July 1, 2021, the exemptions are no longer in effect.
As a result, from now onwards, companies should be able to conduct business in the EU with fewer procedures and less paperwork.
All businesses selling goods in the EU are subject to the IOSS regime if the consignment value of the goods is less than €150. For Example:
The gadget cover costs €60 and is ordered by John from France from a company based in the UK. John will be charged (60 euros + 19 percent) by the UK company because the German VAT rate is 19 percent. It costs €71.4 to pay the invoice. John will receive the product without any delays after it is shipped from the UK. As the consignment value is less than €150, there will be no customs duty on this transaction.
In Ireland, UK is a member of IOSS. As a result, that company of UK will file its IOSS report at the end of the month and will pay the VAT owed to the Irish tax authorities (Revenue).
Hence, German tax authorities will receive VAT from revenue.
This process should take no more than four weeks, but depending on authorities, it could take up to six weeks. When working with government agencies, it is expected that it will take a bit of longer time as we also inform our clients in the beginning.
The IOSS applies to sales with a consignment value of less than €150, but they are exempted from Custom Duty.
After Brexit, UK companies are no longer included in the EU’s goods VAT zone. IOSS registration will be required for UK companies that supply customers in the EU.
It is mandatory for UK-based companies to designate a Tax Intermediary/Fiscal Representative, and this service is provided by TAS Consulting.
It is necessary to appoint an intermediary in order for companies that are not based in the EU to be able to use the import One Stop Shop. Intermediaries will also be required for companies that are located in a third country with which the EU has not signed a VAT mutual assistance agreement.
The EU has already entered into VAT Mutual Assistance Agreements with Norway. It is unnecessary to appoint a tax intermediary in Ireland if Norway is your country.
Later on, more countries might be included in this list by the relevant authorities.
UK companies need to appoint a Tax Intermediary/Fiscal Representative. Nathan Trust provides this service.
In Ireland, TAS Consulting can serve as your fiscal representative.
In any EU country, companies registered under the IOSS are not allowed to deduct VAT expenses. The IOSS is designed to make the payment of VAT easier, not to allow for retrieving of VAT expenses.
All transactions must be documented in detail by the company’s representative. For a period of 10 years, this information must be kept in the record by the company:
Companies from the United Kingdom can register with the IOSS in Ireland if your company is based in the United Kingdom and needs to register for IOSS.
You should choose Ireland as your IOSS registration location because of these reasons:
These services are provided by us as a registered tax agent in Ireland:
To meet all of your IOSS needs, we offer a full-service solution.
If you need assistance registering for IOSS, feel free to contact TAS Consulting
Call us on +353 (0)1 442 8230, 00353 851477625 or email email@example.com
We offer a wide range of accounting-related services of unrivalled quality and dependability. We believe that each customer should be treated as an individual with distinct needs and requirements. TAS provides each customer with customized and tailored solutions in the following areas:
Nov 2, 2023
Nov 9, 2023
Oct 21, 2023