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Germany highlights slow IOSS adoption

The German Ministry of Finance has highlighted a very low uptake of the new Import One-Stop Shop (IOSS) scheme to report sales of imported goods to EU consumers. IOSS is part of the EU e-commerce VAT package reforms introduced on 1 July 2021 to limit VAT fraud and make the VAT compliance simpler for online merchants and tax authorities.

Update: the EU is proposing the €150 threshold for use of IOSS be withdrawn from 1 March 2028.

By early October 2021, there were just over 4,600 sellers in total registered across the EU for the new IOSS scheme, with problems reported in several states.

Sellers now on the hook for import VAT compliance

IOSS is a new single-EU reporting return for sellers who must now charge import VAT in their checkout for the first time if the consignment sent does not exceed €150. Previously, there was a €22 VAT exempt threshold for such sales, and then many sellers just left the Customs import VAT payment to their customers.

This has now ended. IOSS was introduced to make declarations of checkout sales VAT charged simple for merchants.

Just 428 IOSS registrations early August against over 100,000 liable

The Federal Ministry of Finance (BMF) has disclosed that just 428 sellers have registered for IOSS at 6 August, five weeks after the start of the scheme. This compares to estimates of up to 50,000 traders selling into Germany. Whilst IOSS is voluntary, and many of the sellers may not require the scheme for their business model, the discrepancy is huge.

Aside from lack of awareness or preparedness by affected sellers, it is unlikely that German Customs authorities are adequately able to police the new regime. Hence no real incentive to comply.

Preparing VAT OSS or IOSS returns can be challenging.  VAT Calc’s single platform VAT Filer can accurately complete any country filings with verified transactional data from our VAT Calculator or VAT Auditorintegrated tools.


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