由 caicai8478 Effective July 1, 2021, the EU implemented a new set of Value Added Tax (VAT) rules for e-commerce goods valued at up to €150. Core to this is the introduction of the Import One-Stop Shop (IOSS) mechanism. This new rule radically changes the customs clearance model for low-value B2C (business-to-consumer) parcels, with the core goals of streamlining the process, speeding up processing, and leveling the playing field.
To understand how it streamlines customs clearance, we first need to examine the pain points of the “old model.”
I. Pain Points of the Old Model: Why Reform Is Necessary?
Before July 1, 2021, the EU exempted imported goods valued at less than €22 from VAT. This led to the following problems:
A significant inequity: EU sellers were required to pay VAT on all sales, while sellers from outside the EU enjoyed a tax exemption, putting local businesses at a significant competitive disadvantage.
Tax Loss: Many sellers evade tax by understating the value of goods (declaring them below €22), resulting in significant tax losses for EU governments.
Complex and Slow Customs Clearance: For packages valued above €22, the traditional customs clearance process is extremely cumbersome:
Logistics carriers (such as DHL and UPS) are required to complete a customs declaration for each taxable package.
Customs then calculates and collects VAT.
Carriers must prepay the tax and then collect it from the recipient (consumer). This process (called “DDU” – Delivery Duty Unpaid) can lead to:
Customs Clearance Delays: Packages are held at customs pending tax settlement.
Poor Customer Experience: Consumers are forced to pay unexpected taxes and carrier fees upon delivery, leading to extremely low customer satisfaction.
The new regulations abolish the €22 tax-free threshold, meaning that all commercial goods, regardless of value, are subject to VAT. IOSS is designed to address this increased tax burden without slowing customs clearance efficiency.
II. The Core of the New Mechanism: What is IOSS? IOSS (Import One-Stop Shop), also known as the Import One-Stop Service, is an online portal that allows sellers (or their tax intermediaries) to complete VAT declaration and payment for all other EU member states for all B2C goods sold with a value of up to €150 in just one EU member state.
A simple analogy: Previously, you had to report and pay taxes separately at the customs office in all 27 EU countries. Now, you only need to report once to the tax authorities in one country, and they will distribute the fees to the other 26 countries.
- How does IOSS significantly simplify the customs clearance process?
The following diagram visually illustrates the difference between the traditional and IOSS customs clearance processes. Its core advantage lies in pre-clearance:
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As shown in the diagram above, IOSS’s core simplifications are:
Seamless customs clearance: Customs pre-verifies through electronic data that VAT has been processed by the seller, so the package is deemed “duty-paid” and clears customs instantly without any human intervention or delays.
Improved Experience: Consumers pay the total price, including VAT, when placing an order. There are no hidden fees upon delivery, making the experience identical to domestic online shopping, significantly increasing satisfaction and purchase intention.
Improved Efficiency: Carriers no longer need to advance or collect payments, streamlining their operations and reducing logistics costs for sellers.
IV. Key Points and Seller Obligations
To utilize IOSS to streamline customs clearance, sellers must strictly adhere to the following rules:
Product Value ≤ €150: IOSS is only applicable to shipments with a value of €150 or less (this refers to the value of each item, not the total value of the entire package).
Registering for an IOSS Number: Sellers must register in any EU member state through the EU online portal (or through a tax intermediary) to obtain a unique IOSS identification number.
Collect and Display VAT at the Time of Sale:
At the point of sale, VAT is charged to consumers based on the tax rate of the EU country where the goods are delivered.
The amount of VAT collected must be clearly displayed on the invoice.
Monthly Declaration and Payment: Sellers must submit an electronic declaration form monthly through the IOSS portal to their member state of registration and pay all VAT due.
Providing the IOSS number to the carrier: This is a critical step in streamlining customs clearance! Your IOSS number must be prominently displayed on the package’s commercial invoice. Without this number, customs will not be able to identify the package, and the package will be processed according to the old, cumbersome process.
Summary: Core Benefits of the New Policy
Aspects: Traditional Model
IOSS Model
Customs Clearance: Slow, prone to delays
Extremely fast, automatic electronic release
Consumer Experience: Poor (unexpected fees)
Good (transparent pricing, no hidden fees)
Tax Fairness: Unfair (foreign sellers avoid taxes)
Fair (all sellers pay taxes)
Seller Compliance: Complex (must deal with multiple tax jurisdictions)
Simplified (one-stop declaration)
For Chinese e-commerce sellers selling low-value goods to EU consumers, registering for and using IOSS is no longer optional; it’s a must. Although it adds some tax compliance work, it brings unparalleled customs clearance speed advantages and a perfect experience for end consumers, ultimately increasing sales and customer loyalty.