New Arrangements for EU Value-added Tax (VAT) and Import One-Stop Shop (IOSS) (Effective from 1 July 2021)

2021.07.05

According to the European Union (EU), for sending (including through postal channel) commercial goods (including merchandise sold online) to the business users (B2B) or consumers (B2C) in the EU, value-added tax (VAT) will be levied, irrespective of what the value is, from 1 July 2021 onwards. Major changes include:

  1. The existing VAT exemption for the importation of goods to EU countries with a value not exceeding €22 is removed.
  2. The sellers (senders) instead of the buyers (addressees) will be responsible for VAT payment.
  3. The EU has launched the Import One-Stop Shop (IOSS) to facilitate the declaration and payment of VAT by senders for the imported goods with a value not exceeding €150.

If a seller has not registered with the IOSS, the buyer has to pay the VAT at the time of import for customs clearance before they could receive the goods according to the current procedures. Furthermore, additional surcharges incurred may be charged to the buyer. The delivery may also be subject to delay.

For further information, please refer to website of the European Union https://ec.europa.eu/taxation_customs/business/vat/ioss_en.

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