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The E.U.'s Import One-Stop-Shop, or IOSS, allows eCommerce sellers to register with just one of the 27 E.U. tax authorities and to submit one monthly IOSS VAT return in a way that will enable the correct payment of VAT across the other E.U. tax authorities where customers are based. 

It was created to facilitate and simplify the declaration and payment of VAT for sellers making distance sales of imported goods to buyers in the E.U., where the value of those goods does not exceed EUR 150.

If the seller is not registered in the IOSS, the buyer must pay the VAT and usually a customs clearance fee charged by the transporter when the goods are imported into Europe.

Import One Stop Shop

Specific FAQs for IOSS

Whenever a U.K. company imports or exports goods to the E.U., it needs an Economic Operator Registration and Identification (EORI) number. The EORI number was introduced to improve the speed and security of customs clearance for imports from and exports to non-EU countries. This is usually G.B. followed by your nine-digit VAT number and 000. You can also apply for an EORI number online.

The World Customs Organization developed H.S. Codes as a multipurpose international product nomenclature to describe the type of shipped goods.

H.S. Codes, sometimes referred to as Commodity Codes, must only be digits:

• no full stops
• no commas
• no spaces
• no question marks
• no dashes

The H.S. Code determines the correct amount of Customs Duty and any VAT or equivalent. 

Product description should be as detailed as possible to avoid the parcel being held by customs:

• The type of product
• The material used to make it
• Production method and what it will be used for

HS Codes 

And what is the difference between Duty and Tax?

When shipping parcels internationally, duties and taxes are a requirement by the destination country's customs authorities. Charges can vary depending on several factors, including the type of goods, their value, and the destination country. Here is a breakdown of what duties and taxes typically involve:

Duties (Customs Duties)

Tariffs or taxes are imposed on goods transported across international borders.

These taxes are in place to protect domestic industries from foreign competition, generate revenue, and regulate the flow of goods.

Duties are usually calculated as a percentage of the customs value of the goods, which includes the cost of the goods, shipping, and insurance (often referred to as CIF - Cost, Insurance, and Freight).

Duty rates vary by country and product category. Some products may have higher duties due to trade agreements, product type, or the country's economic policies.

Taxes

Value-Added Tax (VAT) / Goods and Services Tax (GST):
Many countries impose VAT or GST on imported goods. This tax is applied to the customs value of the goods plus any duty.

Excise Taxes:
Specific goods, such as alcohol, tobacco, and luxury items, may be subject to additional excise taxes.

Sales Tax: 
Some countries or regions within countries may impose sales tax on imported goods.

The Department for Business & Trade is a good resource for checking taxes by market

Other Fees

Handling Fees:
Charges for customs processing and handling parcels are normally included in the carrier's distribution cost.

Disbursement Fees:
Fees charged by courier companies for paying duties and taxes on behalf of the recipient

Brokerage Fees:
Charges for customs brokerage services provided by the shipping company or a third-party broker.

H.S. Codes (Harmonized System Codes): A standardised system for classifying goods that determines the duty rate applicable to each product.

• Country of Origin: Rules of origin can affect duty rates, especially in countries with trade agreements.
• Value of Goods: Declared value impacts the calculation of duties and taxes.

Payment of Duties and Taxes

Sender-Paid (Delivered Duty Paid, DDP): The sender pays all duties and taxes before shipping, ensuring the recipient receives the parcel without additional charges.

Recipient-Paid (Delivered Duty Unpaid, DDU): The recipient is responsible for paying duties and taxes upon the parcel's arrival in the country before delivery.

Customs Clearance

• Documentation: Accurate and complete documentation is crucial. Commercial invoices, packing lists, and certificates of origin are collected and controlled by the exported and included normally within the data.
• Inspection: Customs authorities may inspect parcels to verify the contents and ensure compliance with regulations. Any anomalies could impact delivery and delay the shipments.

Exemptions and Thresholds

Some countries have de minimis thresholds below which no duties or taxes are charged. This threshold varies widely by country. De minimus is the threshold set by revenue and customs in a country to which the value at which goods can be shipped without tax or duty or determines when tax and duty applies.

For your eCommerce business shipping to or from the U.K., understanding the terms DDP (Delivered Duty Paid) and DDU/DAP (Delivered Duty Unpaid/Delivered at Place) is crucial for smooth international transactions. Here's a simple explanation of these terms:

Delivered Duty Paid (DDP)

DDP means that as the seller, you take on all the responsibilities and costs of shipping the goods to the buyer's location, including paying for customs duties, taxes, and other import charges (Fully Landed Cost). Here's what you need to know:

All-Inclusive: You handle everything—shipping, import duties, VAT, customs clearance, and delivery to the buyer's door.

Customer Convenience: The buyer doesn't have to worry about extra fees or dealing with customs. They receive the goods without any additional charges or paperwork.

Higher Control: You manage the entire shipping process, ensuring a smoother delivery and potentially enhancing customer satisfaction.

Example: If you're shipping a £100 pair of shoes from the U.K. to Germany, you (the seller) pay for all shipping costs, German import duties, VAT, and handling fees. The customer pays just the £100 at checkout and receives their shoes without hassle.

Delivered Duty Unpaid (DDU) / Delivered at Place (DAP)

DDU/DAP means that as the seller, you cover the shipping costs to the buyer's location, but the buyer is responsible for paying customs duties, taxes, and handling fees upon arrival. Here's the breakdown:

Shipping Only: You handle the shipping and delivery to the buyer's country or address but not the import duties and taxes.

Buyer Responsibility: The buyer must pay any additional charges (duties, VAT, handling fees) before receiving the goods.

Lower Initial Cost: The initial cost for the buyer might seem lower, but they need to be aware of and prepared for extra charges upon delivery.

Example: If you're shipping the same £100 pair of shoes from the U.K. to Germany, you (the seller) pay for the shipping. Once the shoes arrive, the buyer must pay for German import duties, VAT, and handling fees before receiving the package.

Depending on what your business is exporting, there could be barriers to shipping internationally to certain countries. There are obvious restrictions on selling items like ammunition and pharmaceuticals abroad, but some countries may have bans, limits, or restrictions on importing other products.

Most items banned from being sent internationally are dangerous and illegal goods, such as firearms, narcotics, medical waste, and more. Yet certain countries have bans on importing more common items you may think are safe to send. This includes everything from the prohibition on exporting maise (corn) to Argentina to all live animals except bees, leeches, and silkworms in Sweden.

Restricted items

The countries under sanctions, embargoes, and restrictions on exports change constantly. The same is true for individuals and organisations, so it's always best to check first with the receiving party or country whether any are currently in place. Often, a licence is required to legally go ahead with any such exports.

Whistl's Current International Delivery Update

Whistl customers are given details to track shipments; if you do not have this information to hand, please speak to your account manager.