Skip links

EU IOSS – teething problems

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

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.

Register for our FREE global VAT and GST news updates.

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
2025 VAT registration thresholds equivalence foreign businesses On track
Virtual events VAT rule changes Agreed
2024 Payment providers' seller transaction reporting and bookkeeping obligations On track
Digital Reporting Requirements (DRR), e-invoicing and live transaction reporting Implementation of VAT in the Digital Age?
2023 DAC 7 - marketplace reporting obligations on sellers' activities On track
Financial Services VAT exemption reform proposals Consultation complete; proposal 2023
Tour operator margin scheme VAT reforms EC undertaking fresh review
2022 EU definitive VAT system Member states not agreed on format
EU reduced VAT rate freedoms Enter into force 6 April 2022
IOSS reforms to prevent double taxation Proposals early 2022
VAT in the Digital Age proposals On track for Q3 2022 detailed proposal
Single EU VAT registration - extension of OSS for B2B and B2C On track for Q3 2022 detailed proposal
Proposal for VAT treatment of the platform economy On track for Q3 2022 detailed proposal
VAT Gap Initiative Q3 2022
2021 One-Stop-Shop (OSS) single EU VAT return In effect
Ending €22 import VAT exemption; new IOSS return In effect
Marketplace deemed supplier EU VAT reforms In effect
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
EU Generalised Domestic Reverse Charge VAT Mechanism In effect, although no country has adopted this voluntary option
2015 B2C electronic services VAT reforms - MOSS return In effect

Leave a comment