Hamburg; Germany

Long-distance sales from third countries into the European Union (IOSS)

By Ingo Prang, KPP Steuerberatungsgesellschaft mbH

On 01 July 2021, the new EUwide distance selling regulations came into force, which primarily affect online traders who deliver to private customers.

In the case of deliveries of goods from a country outside of the EU (third country) into the EU, and a consumption of the goods by private customers, the place of delivery for VAT purposes shifts to the place of consumption. This means that the VAT of the country of destination will be applicable.

However, this shift of place only occurs if the goods are transported or dispatched by the supplier from the territory of a third-country and the route of the goods will end in an EU member state. In addition, the tangible value per consignment must not exceed EUR 150 (each package must be valued separately), and the supplier must make use of the new Import-One-Stop Shop (IOSS) for all deliveries into the EU (the all or nothing principle).

This new procedure has some significant advantages. The IOSS exempts one from import VAT. Furthermore, corresponding consignments can be declared to Customs under the IOSS number (an EORI number is not necessary anymore) and thus are also exempt from customs duties. The most significant advantage, however, is that it is no longer necessary to register for VAT in each individual EU member state in which deliveries take place. As a result, only periodic IOSS VAT return declarations will be necessary in one EU member state in the future and VAT will have to be paid centrally in only one amount. In addition, the administration effort will be further reduced as VAT declarations will be required only monthly (independently from the amount of the VAT payment).

In summary, even though participation in the IOSS is voluntary, it is advisable to take advantage of this opportunity because of the not insubstantial benefits described above.

Ingo Prang

Ingo Prang

GGI member firm
KPP Steuerberatungsgesellschaft mbH
Kleve, Emmerich, Weeze, Germany
T: +49 2821 72 04 0
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In the past 20 years, KPP Steuerberatungsgesellschaft mbH has become one of the leading tax consultancy offices in the Lower Rhine region of Germany. The company offers taxation, legal and consulting services. As KPP is close to the Netherlands, the company has acquired considerable expertise in advising on cross-border matters, especially for foreign companies investing in Germany, e.g. real estate.

Ingo Prang is a German-certified Tax Advisor and Partner of KPP. In addition, he lectures on Comparative Business Taxation at the Rhine-Waal University of Applied Sciences

Published: Indirect Taxes Newsletter, No. 12 Autumn 2021 l Photo: m.mphoto -

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