Understanding IOSS and OSS: simplifying EU VAT compliance for cross-border sales

The Import One-Stop Shop (IOSS) and One-Stop Shop (OSS) schemes were introduced by the EU to streamline VAT compliance for businesses engaged in cross-border sales of goods and services. These mechanisms are part of the EU’s broader VAT e-commerce package that came into effect on 1 July 2021, aiming to reduce administrative burdens and improve VAT collection across member states.

Import One-Stop Shop (IOSS)

The IOSS is designed for distance sales of low-value goods (up to €150) imported into the EU from non-EU countries. Key features include:

• Single VAT registration: Businesses can register in one EU member state and report all eligible sales across the EU.
• Simplified VAT collection: VAT is charged at the point of sale, making the import process smoother for customers.
• Improved customer experience: No surprise import VAT or handling fees upon delivery.

IOSS is particularly beneficial for online marketplaces and direct-to-consumer sellers shipping goods from outside the EU.

One-Stop Shop (OSS)

The OSS scheme extends the concept of simplified VAT reporting to intra-EU B2C supplies, including:

• Cross-border sales of goods within the EU
• Telecommunications, broadcasting, and electronic services
• Certain domestic supplies by deemed suppliers (e.g., marketplaces)

With OSS, businesses can:

• File a single quarterly VAT return for all eligible EU sales.
• Avoid the need for multiple VAT registrations across member states.
• Ensure compliance with local VAT rates while reducing administrative overhead.

Conclusion

If your business sells across borders, these schemes offer a more efficient way to manage your VAT obligations, reduce costs, and enhance customer satisfaction.

To discuss this in further detail, please get in touch with one of our Indirect Tax Services team members.