Navigating the EU's IOSS: When to Use Your Own Number or an Intermediary's

The Import One-Stop Shop (IOSS), introduced by the EU in 2021, streamlines VAT declaration and payment for goods imported into the EU valued at €150 or less.

An IOSS number is a unique identifier for businesses registered under the scheme. It enables sellers to collect, declare, and remit VAT on eligible low-value goods sold to EU customers, simplifying imports and preventing unexpected VAT charges at delivery.

Do I need my own?

There are scenarios where a business might choose to use an intermediary’s IOSS number instead of obtaining its own:

1. When to Use Someone Else’s IOSS Number:
   1. For small businesses or occasional sales to EU customers, using an intermediary’s IOSS number can be a cost-effective option. It eliminates the administrative effort and expenses of obtaining and managing your own IOSS registration.
   2. Benefits: Reduced administrative workload, lower compliance costs, and immediate access to the IOSS scheme without the need to establish an EU entity or appoint an intermediary yourself.
2. When to Get Your Own IOSS Number:
   1. If your business frequently imports goods into the EU or has significant sales volume, obtaining your own IOSS number might be more beneficial. This allows you greater control over your VAT reporting and compliance processes.
   2. Benefits: Directly managing VAT obligations can reduce long-term costs compared to intermediary fees and provide greater transparency in your tax affairs.

Do You Need a Legal Entity to Obtain an IOSS Number?

Yes, to obtain your own IOSS number, your business generally needs to be established within the EU.

If your business is not based in the EU, you must appoint an EU-established intermediary (often a tax representative or fiscal agent) who will act on your behalf for VAT obligations under the IOSS scheme.

This intermediary will be responsible for registering for the IOSS, submitting monthly VAT returns, and ensuring compliance with EU VAT laws.

Biggest Factors Influencing the Decision:

• Company Size: Larger companies with more resources may prefer to handle VAT compliance internally, while smaller companies might opt for external assistance.
• Frequency of Import: Regular importers benefit from having their own IOSS number to streamline ongoing operations.
• Administrative Capacity: Businesses with dedicated tax or compliance teams are better equipped to manage their own IOSS registration.
• Cost Considerations: Using an intermediary might involve service fees, but it can save costs related to establishing an EU entity or appointing an intermediary for your own registration.
• Risk Management: Handling VAT obligations through an intermediary can mitigate the risk of non-compliance penalties, as the intermediary assumes responsibility for accurate reporting and payment.

When deciding which route is best for you to take, make sure you:

• Assess your business needs. Evaluate your sales volume to EU customers and determine the frequency and value of your imports.
• Consult a tax professional. Seek advice from a tax advisor or intermediary experienced in EU VAT laws to understand the implications fully.
• Consider compliance responsibilities. Ensure you are prepared to meet all reporting and payment obligations if you decide to register for your own IOSS number.

Deciding whether to use someone else’s IOSS number or obtain your own depends on various factors, including your business size, import frequency, administrative capabilities, and cost considerations.

Small or infrequent sellers may find it advantageous to use an intermediary’s IOSS number to minimize costs and administrative tasks.

In contrast, larger or frequent importers might benefit from the control and potential cost savings associated with having their own IOSS registration.

By carefully weighing these factors, you can make an informed decision that best suits your business operations and compliance requirements.

For insight on an intermediary offering IOSS services, check out our piece on Duty Refunds.

To learn more about staying compliant when shipping to the EU, talk to a member of our team.

This content is provided for informational purposes only and does not constitute legal advice. For advice specific to your unique situation, please consult a qualified legal professional.