IOSS VAT for UK Businesses: Selling to the EU with Goods from China Explained

30 Jan

Selling Goods to the EU from China: Do You Need IOSS VAT Registration?

If you’re a UK business registered for VAT and planning to sell products to customers in the EU, with goods shipped directly from China, understanding VAT obligations is crucial. The Import One-Stop Shop (IOSS) VAT system was introduced to simplify VAT collection on low-value imports, and it could be beneficial for your business.

When Is IOSS Required?

IOSS applies if:

You’re selling goods valued at €150 or less to EU consumers.
You want to charge VAT at the point of sale rather than having it collected at customs when the goods arrive in the EU.

Benefits of Using IOSS

Simplifies VAT compliance – You register in one EU member state and charge VAT at checkout for all EU sales.
Faster delivery – Goods are processed smoothly at customs, reducing delays for customers.
Better customer experience – No unexpected VAT charges upon delivery.

Choosing an EU Country for IOSS Registration

You can only register for IOSS in one EU country, so selecting the right one matters. Popular choices include:

Ireland – An English-speaking country with a straightforward registration process.
Netherlands – Known for efficient tax administration and strong support for international businesses.
Germany – Robust VAT system, useful if targeting German-speaking customers.
Belgium – A central EU location, beneficial for businesses shipping across multiple EU markets.

What If Goods Exceed €150?

IOSS is not applicable for goods valued over €150. Instead:

VAT is paid at customs upon importation.
Customers may be charged VAT and customs duties before receiving their goods.
You must comply with the import VAT rules of the EU country where the goods are delivered.

Summary: Do You Need IOSS?

If your goods are €150 or less, IOSS simplifies VAT collection and enhances the buying experience.
If your goods exceed €150, you will follow standard import VAT procedures, and IOSS is not necessary.

Need Help with VAT Compliance?

Navigating VAT regulations for EU sales can be complex. At Crypto Tax Accountants, we help UK businesses stay compliant with IOSS and import VAT rules.

Mansoor Ahmad