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EU updates IOSS import VAT data sharing rules

The European Union member states have adopted changes to the data sharing rules to facilitate fraud detection around the new IOSS import VAT scheme which was implemented as part of the EU e-commerce VAT package on 1 July 2021.

IOSS exempts consignments not exceeding €150 from import VAT

Following the EU scraping the €22 low-value import VAT exemption on 1 July, it introduced the new IOSS regime for imported packages not exceeding €150. E-commerce merchants can now opt to charge import VAT on these consignments in the checkout. The parcel is then give a green channel speedy clearance into any EU member state on its way to the consumer.

Automatic IOSS data exchange to combat VAT fraud

To help prevent fraud around this regime, the European Commission has given extra automatic informational exchange powers between the member states via an update of regulation (EU) No 79/2012. This includes being able to exchange details of import transactions reported via IOSS in one member state with the tax authorities of another member state.

The EU’s regulation (EU) No 79/2012 of 31 January 2012 implemented detailed rules on certain measures regarding administrative cooperation and combating VAT fraud. This includes the right to automatically share information on e-commerce traders’ VAT identification numbers when they are established in another EU member state.

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