Latest changes to VAT rules from 1st of July 2021

Published 10th Aug 2021 by MY Export Hub

The EU is implementing new rules to create an import scheme for distance sales made to EU consumers from third countries (that is countries from outside the EU, which will include the UK from 1 January 2021). This scheme has been delayed to 1 July 2021 due to the pandemic, but when implemented is designed to prevent the need for non-EU businesses registering all over the EU. The scheme will be called the Import One Stop Shop (IOSS) and will work similarly to the current Mini One Stop Shop (MOSS) for digital services.

As a non-EU business selling to EU consumers in consignments of less than 150 euros, import VAT will not be due, instead supply VAT will be due and accounted for by you. You will have to register for an IOSS VAT registration and account for the VAT in the member state of destination. The purpose of the scheme is to speed up and simplify customs processes and avoid the need for multiple EU VAT registrations.

As an alternative to registering for the IOSS you could elect to shift responsibility for the payment of Import VAT to the end customer, which will be collected via the “customs declarant” (postal operator, courier firm, customs agents). This is a commercial decision and you would need to weigh up the cost for both options, as the customs declarant would presumably charge you for this service.

For sales of goods between 1 January 2021 and 30 June 2021, you will need to consider who will be responsible for importing the goods into each destination EU state — if it is you then you will need to take local advice regarding a likely VAT registration in that country until the IOSS system in introduced from 1 July 2021.


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