One of the biggest barriers to importing into the European Union is that businesses have to go through several institutions to initiate this process. This article will walk you through the procedures for getting an IOSS number (Import One-Stop-Shop) for importing into the EU after establishing a company in Estonia.
What is an IOSS number?
The IOSS was introduced on July 1, 2021, to enable eCommerce businesses to fulfill their VAT obligations. The IOSS number makes it easier for businesses to pay value-added tax (VAT) on imported goods. The IOSS allows businesses to register in one member state and pay EU import VAT through a monthly IOSS return.
For example, a business registered in Estonia can pay its EU import VAT in Estonia, which is regulated by the Estonian Tax and Customs Board. This simplifies the process for companies and reduces the amount of paperwork required. The IOSS can only be used for certain supplies, so businesses should check whether they are eligible before using the system.
What does an IOSS number look like?
If you’re thinking about starting a business in the European Union, you’ll want to familiarize yourself with the IOSS number. The IOSS number is a unique identifier for businesses in the EU. It’s a nine-digit number that starts with the number 9 and consists of the business’ registered name, country of registration, and tax identification number. The first two digits represent the country where the business is registered, and the remaining seven digits represent the business registration district within that country.
To find out your IOSS number, go to the EU online portal and enter your business name and country of registration. You’ll then be able to see the IOSS number and other important information about your business.
Do I need an IOSS number?
You will need an IOSS number to make VAT declarations to the EU tax authorities. This number will identify your company’s individual sales. All businesses registered under the Import One-Stop-Shop scheme will also need to include an IOSS number on any waybill number for business-to-consumer eCommerce shipments. This includes orders bought by EU-based buyers that are valued at €150 or less.
In short, an IOSS number is a necessary step in starting a business in the European Union. It is a nine-digit number that is specific to businesses in the EU. You will need to register your business with the European Commission and start filing business documents.
The IOSS scheme was essentially designed to help businesses outside the EU declare and pay VAT within the EU on goods imported into any EU member country. An IOSS number can be obtained by registering for IOSS either directly or with an IOSS intermediary if you are within the EU, or only via an IOSS intermediary if not in the EU.
The IOSS number is used to declare and pay EU import VAT in cases where:
- The imported goods are not liable for excise duties.
- The imported goods are in a location that is outside the EU when they are sold.
- These goods are imported in batches that do not increase €150 in value, and the cost of transportation is exempted.
- The recipient of the imported goods has to be an operator or private individual that has not registered for VAT.
- Clearance of goods like alcohol must be completed at the point of entry. In other words, the excise duty when applicable must be paid to the EU country of import.
- If products subject to certain restrictions are imported, then the business has to declare these goods to the Customs Clearance Service.
- If products with commodity code restrictions are imported, then they must be declared to the Customs Clearance Service even if they are exempted from licensing requirements.
Even though suppliers are not mandated by law to make use of the IOSS number, using this scheme offers several benefits that both consumers and suppliers can enjoy:
- The supplier can register in one of the EU countries for supplying goods under the IOSS to any other location within the European Union.
- Consolidate all due EU import VAT in a single monthly report for all supplies across the European Union.
- Charge a customer the applicable VAT rate when a sale is made.
- When the IOSS is considered, the business does not have to pay customs duty when goods are imported. Instead, customers pay VAT at the point of sale. This means that customers do not have to pay any further customs duty or taxes to receive the goods after purchase.
How do I get my IOSS number?
You can register your business on the IOSS portal of any EU member state as of April 1, 2021. If companies are based outside of the EU, they will need to appoint an EU-established intermediary to fulfill their VAT obligations under IOSS. The IOSS registration is applicable to goods imported into the EU from a non-member country for sale in the EU.
If your business is based in the European Union, you can register for the IOSS system directly with the EU tax authority of the country you are in, or through an IOSS intermediary. If your business is not established in the EU but wants to access IOSS solutions, it must register through an IOSS intermediary, which will act as a liaison between the company and the IOSS.
The following details are needed to get your IOSS number:
- Full name of the company
- Brand or operational name
- Registration of the license number of the business
- Country of IOSS registration
- Name of the appointed director or legal representative
- EU countries where business is conducted
- Full address of the registering company
- Full address of the contact person or local representative
- Business details like:
- Type of products imported and sold in the EU
- Average orders shipped per month to the EU
- Average sales made in the EU
- Marketplace or eCommerce website URL
- Online portals where goods are sold (WooCommerce, Shopify, AliExpress, Wix, Amazon, Etsy, etc.)
How do I find my IOSS number?
You can find your IOSS number on your IOSS-registered web store as a unique IOSS identifier. This comes in handy when you have to show the customs officials in an EU member state whether you have already paid VAT at the time of purchase.
As a seller, you need to provide this web store IOSS identifier to the transport company that handles the delivery of your goods. This identifier is then automatically forwarded to the customs department of the importing company for customs clearance. You could arrange with the transport company whether you or the transport company will declare the goods for customs clearance.
Get an IOSS number for your Estonian company with Workhy
If you want to conduct business in the European Union, you can get support from Workhy‘s professional team to set up a company in Estonia and obtain an IOSS number. Visit our website to learn more about the services we offer in Estonia, such as bookkeeping, providing a legal address, appointing a liaison officer, opening an online bank account, and VAT and EORI applications.