IOSS (Import One-Stop Shops)
Online retail has allowed customers to purchase merchandise from third countries (non-EU countries) as well.
NOTICE
Since 01.07.2021 there is no longer a 22 Euro tax-free allowance for merchandise. This means that for all shipments of goods from third countries (countries outside the EU) the import turnover tax will be charged. Customs duties continue to be incurred only from an amount of 150, - Euro.
Example 1
An Austrian online business sells a pair of socks that retails for EUR 10 to a customer in the EU who lives in Germany. This pair of socks will ship from China to the customer in Germany.
All items are subject to value-added tax, independently of their merchandise value. The value-added tax rate of the country where the buyer has their residence shall apply (in this case, 19% because the EU consumer is located in Germany).
To make declaring and paying VAT for merchandise of minor value from third countries easier, EU legislation has established the creation of import one-stop shops.
What does this mean?
Entrepreneurs with import online retail business (see Section 3 (8a) of the 1994 Austrian Turnover Tax Law) in the EU can, under certain circumstances, decide to get registered in one member state only and to declare and pay the tax via the import one-stop shop (IOSS). Via the IOSS, the VAT will be transferred to the specific member state where the tax is due. This affects import online retail business whose individual value for item does not exceed EUR 150.
Example 2
Via its website, an Austrian company sells clothes to private persons in different member states. These clothes are sent directly from the third-country production site to these private persons. The company has signed up for the IOSS (Section 25b of the 1994 Austrian Turnover Tax Act). The individual item value does not exceed EUR 150.
Example 3
Via its website, a Chinese company sells mobile phone covers to private persons in different member states. These mobile phone covers are sent directly from the third-country production site to these private persons. The company has signed up for the IOSS (Section 25b of the 1994 Austrian Turnover Tax Act) in Austria. The individual item value is EUR 10.
Pursuant to Section 3 (8a) (b) of the 1994 Austrian Turnover Act, the place of delivery for items is the member state where the item is sent to. Chinese retailers can declare VAT for the member states in question in their monthly IOSS declaration via the FinanzOnline service and pay the tax via a monthly transfer to their IOSS account. The import in question is exempt from VAT (Section 46 (4) (9) of the 1994 Austrian Turnover Tax Act), provided that all requirements have been met. To benefit from this tax exemption, the retailer must share their IOSS identification number with the carrier so that they can provide this information to the customs authority at the time of import.