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EU IOSS – teething problems

Over 4,600 sellers had registered for IOSS at the start of October 2021

Update: the EU is proposing the €150 threshold for use of IOSS be withdrawn from 1 March 2028.

We’re now a few months into the new IOSS pan-EU return regime, which enables sellers of imported consignments not exceeding €150 to EU consumers to report sales VAT which most now be collected in the checkout – EU e-commerce package.   On top of this, deemed supplier marketplaces and Special Arrangements parcel operators will be reporting in their own IOSS seller shipments.

Two monthly filing deadlines  have now passed. But how is it working out on the ground? There are plenty of stories emerging of local problems. Whilst to be expected, the long lead time, including a 6-month postponement for COVID-19 for the whole e-commerce VAT package, should have mean a lot was avoidable. German IOSS issues in particular have been challenging.

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IOSS implementation issues

Tax authorities IT and liability issues

  • The Dutch authorities have incorrectly issued Q3 tax assessments (July to September 2021) against businesses which had correctly filed their OSS returns.
  • A number of tax authorities have begun to issues audit data requests by are not following the EU SAF OSS suggested schema.
  • Germany delays in issuing OSS Union Scheme numbers, which have amounted to a trickle in largest e-commerce country in the EU
  • Netherlands’ warnings of not being ready for IOSS came to fruition as an IT error meant any importer using deferred VAT Article 23 licenses where wiped. This is now fixed.
  • Ireland failed to activate their IOSS system until 15 July, causing a backlog of VAT double charges
  • Germany’s DATEV accounting software is also unable to automatically upload Amazon AVTR’s, requiring manual intervention for BZSt tax authorities
  • Some member states are calling out the European Commission on confusion on issuing IOSS and OSS numbers – the EC controls the numbering.
  • Member states’ data upload schemes are still not harmonised – switching between csv and txt files – as envisaged by the European Commission.
  • Czech Republic and some other states have been late in implementing the required legislation – the Czechs delayed until October – adding to the uncertainty of the local requirements
  • Belgium is still erroneously issuing ‘“VAT rate is not 21%” notices to all taxpayers registered in other IOSS member states once the tax office has notified the Belgians of their share of the VAT due.
  • The reporting process for Intrastat has still gone unanswered

Goods stopped at customs and double taxation

  • EU IOSS double taxation solution is due in February 2022
  • Portugal shipments at the outset were largely being fully blocked; this appears to be now resolved
  • Spain has also had difficulties with Deutsch Post incorrectly reporting their IOSS shipments
  • Many sellers are reporting their freight forwarders still do not understand the system, and there are many reports of double taxation as VAT is charged in the checkout and again at the border by Customs.

Intermediary issues

  • Full Fiscal Representation (FR) obligations have been put onto IOSS Intermediaries, whereas this was only an option. A number of member states (e.g. Poland and Italy) have literally copied their VAT FR laws into the new IOSS regulations.
  • Smaller marketplaces in Europe are being highlighted has blocking third-country sellers due to the new obligations as the deemed seller

EU VAT reforms

Reform (click for details) Update
Contact VATCalc to learn how our single VAT determination, reporting and e-invoicing platform can help you manage and thrive with global compliance change
2035 Harmonisation of EU e-invoicing and domestic regimes Jan 2035
2030 Digital Reporting Requirements and e-invoicing harmonisation July 2030
Structured e-invoices supercede paper invoices July 2030
EC Sales lists replaced by Digital Reporting Requirements July 2030
2028 EU Customs reforms Published May 2023
€150 import consignment threshold removed Published May 2023
2027 Single VAT Registration in the EU - extension of OSS July 2027
Call-off stock VAT simplification ends July 2027
Harmonisation of B2B Reverse Charge rules July 2027
Proposal for VAT treatment of the platform economy July 2027
2026 DAC8 harmonised crypto asset reporting Approved May 2023
2025 VAT registration thresholds equivalence foreign businesses 1 Jan 2025
Virtual events VAT rule changes 1 Jan 2025
Financial Services VAT exemption reform proposals Consultation complete; proposal awaited
Tour operator margin scheme VAT reforms EC undertaking fresh review
2024 Payment providers' seller transaction reporting and bookkeeping obligations In effect since 1 Jan 2024
2023 DAC 7 - marketplace reporting harmonisation In effect since 1 Jan 2024
2022 IOSS reforms to prevent double taxation On hold
EU reduced VAT rate freedoms Entered into force 6 April 2022
VAT in the Digital Age proposals Published Dec 2022
EU DAC8 cryptocurrency tax reporting proposals Published Dec 2022
VAT Gap Initiative Q3 2022
EU Definitive VAT System On hold
2021 One-Stop-Shop (OSS) single EU VAT return In effect since 1 July 2021
Ending €22 import VAT exemption; new IOSS return In effect since 1 July 2021
Marketplace deemed supplier EU VAT reforms In effect since 1 July 2021
2020 EU four Quick Fixes for VAT In effect
Tax authorities anti-VAT fraud cooperation In effect
Tax Action Plan - 25 VAT and other tax reforms roadmap See 'VAT in the Digital Age' and others
2019 Simplification of e-services VAT compliance and thresholds In effect
Single and multi-use vouchers In effect
2018 Lower e-book and publications VAT rates In effect, although not all EU states have adopted the option


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