EU VAT changes - 1 July 2021 IOSS Information Briefing - Do ...
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EU VAT changes - 1 July 2021 IOSS Information Briefing
Royal Mail International – EU VAT changes
From 1 July 2021, EU VAT rules are changing
Summary of the Changes
• On 1 July, the current €22 VAT exemption on UK goods being sold into the
EU will be removed
• This means all goods travelling to the EU, regardless of value, will be subject
to VAT from 1 July 2021
• These changes affect UK sellers whether they’re selling goods directly to EU
consumers or selling to them via a marketplace
• Royal Mail can offer UK sellers a number of options to manage their EU
sales beyond 1 July
• Use one of the EU IOSS Solutions
• Use a Delivery Duties Paid (DDP) service
• Continue to use a Delivery Duties Unpaid serviceFrom 1 July – DDU, DDP, IOSS Comparison
From The what and the how? Delivered Duties Unpaid Delivered Duties Paid Import One Stop Shop
1 July 2021 (DDU) (DDP) (IOSS)
Up to €150 (VAT only) Yes Yes Yes
Item value?
Above €150 (VAT & Yes Yes No
customs duty payable)
EU destination postal UK seller on behalf of UK seller on behalf of EU
Calculated by? authority on behalf of EU destination customs destination customs
VAT Process customs
How is it collected from Prior to delivery (like the UK At point of sale (online At point of sale (online
recipient? ‘Fee to pay’ process) checkout) checkout)
Who collects it? EU destination postal UK seller UK seller
authority
Who it is paid to? EU destination customs Royal Mail who pays to EU destination customs
authority the EU destination via monthly tax returns
postal & customs in the EU member state
authority where registered for
IOSS
Classified: RMG – InternalWhat is the
Import One Stop Shop (IOSS)?
Classified: RMG – InternalRoyal Mail International – EU VAT changes
The Import One Stop Shop (IOSS)
IOSS Facts
• The IOSS (import one stop shop) is being introduced by the EU to facilitate
the collection, declaration and payment of VAT for UK sellers making distance
sales to consumers in the EU
• The IOSS covers goods which are sold by UK sellers directly to EU consumers
as well as via online marketplaces such eBay and ETSY
• Once registered and using IOSS, EU consumers buying from UK Sellers pay
any VAT owing at the point of purchase and receive their items without them
being held awaiting the collection of VAT (and handling fee)
• Royal Mail is ready for IOSS and customers can continue to use our
International services after 1 July 2021
• Depending on the UK seller, RM can offer a number of options to enable UK
sellers to use IOSS and Royal Mail services from 1 July 2021
Classified: RMG – InternalRoyal Mail International – EU VAT changes
What do UK sellers need to know?
• IOSS is only available with the core RM International non-personal
correspondence (NPC) products (not legacy products)
• IOSS works in conjunction with existing Royal Mail International services
• Items are identifiable via the use of an IOSS number in electronic pre-
advice
• An IOSS logo will appear on items where the customer provides us
with an IOSS number but this is not the main identifier (electronic
data/pre-advice which includes the IOSS number, is)
• Provision of all required electronic customs data is required to use IOSS
• To use some IOSS options UK sellers will need to integrate a landed cost
calculator into their checkout
• IOSS is a facility for VAT management. It does not enable payment of
customs duties which apply when an item is valued above €150. Items
over €150 should be sent DDU or DDP
Classified: RMG – InternalWhat are Royal Mail’s
IOSS solutions?
Classified: RMG – InternalFour Customer Options for using IOSS
1. IOSS will be our core offering. There are 4 IOSS options for customers to consider (Items 0 -150 euros)
1. Self Registration – Customers can provide Royal Mail with their own IOSS number and ship within the scheme
2. Supported Registration – We have a 3rd party partner (Deloitte) that support customers with registering for IOSS
3. Pay as you go – Another 3rd party partner (Taxamo) that will charge a nominal fee per transaction for access to
their IOSS number
4. Marketplaces – Some Marketplaces will be giving there customers access to their IOSS number
2. PDDP (Items 0> euros)
1. July 1st Launch will be to limited dentations where Postal Admins are ready.
2. Tracked and Untracked service only
3. VAT to be collected at the checkout – Royal Mail will provide customers with access to a 3rd Party (Hurricane) to
support with any landed cost calculation
3. DDU for customers who do not want to register for IOSS or use PDDP (Items 0> euros)
1. From July 1st VAT will be collected at the door within Europe
4. IOSS via Market places – sellers use the IOSS number of the Marketplace
https://www.royalmail.com/business/international/guide/delivered-duties-paid
Classified: RMG – InternalRoyal Mail International – EU VAT changes 1. IOSS Self-Registration A sensible option for our largest customers –register and give RM the IOSS number in electronic pre-advice • UK customers can choose to register themselves (via an Intermediary) for IOSS in one EU country (registration opened 1 April). They get an IOSS number which covers sending goods to all EU countries. • Each EU country has its own IOSS registration page online – here’s the Ireland example https://www.ros.ie/vatoss-web/vatoss.html?execution=e1s1 • Using a landed cost calculator, the UK customer collects any VAT owed from their EU customer at the point of purchase (online checkout) • UK customers with their own IOSS number provide this to RM in their electronic pre-advice (in the importer tax code data field) • IOSS can be used with the core product codes. Items don’t need to be segregated • The receiving EU postal authority will recognise an IOSS item and deliver it without interruption
Royal Mail International – EU VAT changes
Assisted IOSS Solutions: Summary
• For customers who don’t want to register themselves for IOSS or want someone else
to take responsibility for registering, calculating tax and filing tax returns we have two
solutions which will be delivered via trusted partners Deloitte and Taxamo.
• Both these solutions have been developed in conjunction with Royal Mail.
• The solutions are ready to use, accessible directly by customers – we provide our UK
customer with the contact information and our partners take it from there.
• Our partners manage the tax elements of the IOSS solutions, including billing. Royal
Mail continue to manage the shipping in the same way as we do now
• The Deloitte solution is ready for onboarding now
• The Taxamo solution will be ready for onboarding on 1 June 2021
• Customers should to allow time for registration/onboarding of around 4 weeks before
1 July
Classified: RMG – InternalRoyal Mail International – EU VAT changes
Assisted IOSS Solutions – More Information
2. Registration and Filing Service offered by
• Deloitte’s solution offers to register UK customers for IOSS, provide them with an IOSS number and prepare and file annual tax
returns
• IOSS registration is a one-off fee of £300 plus an annual fee of £2k for preparing and filing annual tax returns
• This solution is suitable for customers sending c3000+ parcels per year to the EU
• Customers will need some organisational tax capability/experience
• Once registered, the UK customer provides their IOSS number to RM as part of their electronic pre-advice in the importer tax
code field. Items are sent using the core product codes and don’t need to be segregated
• Customers using Deloitte’s solution need to have / integrate a landed cost calculator into their online checkout so they know
how much tax to charge their customers per transaction and can supply tax information to Deloitte
• Fees for this service are paid directly by the UK customer to Deloitte (RM are not involved in this)
• The Deloitte solution is ready for onboarding now
• The website includes the ability to register and is located www.deloitte.com/uk/en/pages/tax/solutions/ioss.html
• Customers should to allow time for registration/onboarding of 4 weeks before 1 July
Classified: RMG – InternalRoyal Mail International – EU VAT changes
Assisted IOSS Solutions – More Information
3. Assure
• Taxamo operate a ‘pay as you go’ solution ideal for smaller customers who want a hassle-free way to continue to send
goods to EU consumers without having to invest lots of time and resource in meeting the new requirements
• Customers don’t need to register with IOSS, worry about calculating VAT or file tax returns as Taxamo do all that for them
• Customers ‘plug-in’ the Taxamo API to their online checkout and use Taxamo’s IOSS number to send their items via RM.
• Taxamo calculate and pay any tax owed as well as file the tax returns.
• In return, the UK customer pays a fee per item (£2) on top of their regular shipping costs
• The £2 per item fee is paid directly to Taxamo and not Royal Mail. The customer continues to pay their normal shipping cost
to Royal Mail for their existing services (core products only)
• This is a great and simple solution for smaller customers sending under c3000 parcels per year to the EU
• The Taxamo solution will be ready for onboarding on 1 June 2021
• The website includes the ability to register and is l https://www.taxamo.com/taxamo-assure-rmg (live 25 May)
• Customers need to allow time for registration/onboarding of 4 weeks before 1 July
Classified: RMG – InternalAssisted IOSS Solutions: Summary
1 2
Taxamo – Assure Deloitte – Registration & Filing Service
This is a ‘pay as you go’ option where a third party Deloitte register you for IOSS, so you can send items using your
What does it •
acts as the deemed reseller. You use their IOSS own IOSS number
involve? number to send items to customers in the EU • Using sales and tax data from your system Deloitte will prepare
You pay a price per item which means you don’t have and file the VAT returns for you
to register or file for EU tax • You pay one off fee for registration + annual fee for tax returns
• To avoid the VAT management overhead -
Why you would calculation, registration, filing and remittance • You want to send higher volumes of EU items (3000+ PA)
choose it: • To transfer the VAT liability risk - penalties and late with a reduced cost per item and lower perceived tax risk
fees - to third party • You are prepared to install or already have tax IT systems
• Streamlined customer journey with seamless VAT needed to calculate the VAT on sales to different EU countries
compliance integration from checkout to delivery • You can dedicate operational resource to managing the tax
• Smaller sender of under 3000 parcels to the EU PA
It may not be • You are sending a high volume of items • You only send a small amount of items each year
right if: • You already have the ‘in-house’ capability and • You already have the capability and expertise to register
expertise to register and file for IOSS independently and file for IOSS independently
Classified: RMG – InternalRoyal Mail International – EU VAT changes
4. IOSS via Marketplace
• Under IOSS, if UK sellers are selling to EU customers through a larger
marketplace, the marketplace takes on the responsibility for VAT
• This means the UK seller does not need their own IOSS
number/registration and instead uses the IOSS number belonging to
the Marketplace they’re selling through
• This applies to all items below the value of €150.
• Items over the value of €150 are liable for customs duty which is not
covered by IOSS (a VAT system)
• If the UK seller sells both via a Marketplace and directly (via their own
website), then they do need an IOSS solution for the direct sales they
make. Taxamo is likely to be a solution for their direct sales stream
• RM is making some changes to Click and Drop to help sellers who sell
both directly and via a Marketplace to enable them to use more than
one IOSS number (more information to follow)
Classified: RMG – InternalRoyal Mail International – EU VAT changes
Further Support and
Information
• IOSS online information https://ec.europa.eu/taxation_customs/business/vat/ioss_en
• RM website https://www.royalmail.com/import-one-stop-shop-ioss
• Solution and Registration Information
• Deloitte Solution www.deloitte.com/uk/en/pages/tax/solutions/ioss.html
• Taxamo https://www.taxamo.com/taxamo-assure-rmg
Classified: RMG – InternalEnds Classified: RMG – Internal
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