VQOTW: EU Changes 1 July 2021 (IOSS)
Many of my clients are asking me about “the changes in the EU” from 1st July 2021.  What are they talking about?  

1st July 2021 was the implementation date for the changes coming in under the EU’s scheme for Modernising VAT for Cross-Border E-Commerce. The changes, designed to simplify VAT obligations for businesses making cross-border supplies of goods and services, were due to take effect from 1st January, but the implementation was postponed because of the coronavirus pandemic to allow Member States and businesses additional time to prepare.   Comprehensive guidance can be found on the European Commission Website at: –


There are useful links within the guidance to detailed Explanatory notes, and summaries for each of the schemes mentioned below.

The measures being implemented affect supplies of goods and services to EU consumers and are summarised below.   The measure concerning goods affects supplies of goods from stocks held by businesses within Great Britain and stocks held within Norther Ireland differently, as supplies of goods (but not services) fall within the Northern Ireland Protocol.

From 1st July 2021: –

Low value consignment relief has ceased; the VAT exemption for goods in small consignments with a value of up to EUR 22 has been abolished.  Unless falling within import VAT relief schemes, such as temporary importation relief, VAT will be due at the applicable local rate on all imports into the EU. ** See IOSS below

The non-mandatory Import One Stop Shop scheme (IOSS) begins.  This is a simplification open to businesses not established in the EU, supplying goods to non-VAT registered EU consumers with a consignment value of €150 or less.   Businesses using the scheme VAT register in one Member State (MS), using a local intermediary, and submit a local VAT return for that MS and a one stop shop return for all other MSs, declaring and paying over VAT at the applicable local rate. Where the goods are supplied via an online marketplace, the marketplace is responsible for accounting for the local VAT via their own one stop shop registration.   Goods on which VAT is accounted for under IOSS benefit from a VAT exemption upon importation, allowing faster customs processing.   More detail on the IOSS can be found  in  our earlier VQOTW at  https://www.cronertaxwise.com/community/my-vip-tax-team-vat-question-of-the-week-import-one-stop-shop-ioss-one-stop-shop-oss/

Please note that as mentioned above, the IOSS scheme is not mandatory, it is a simplification.  For sales outside the scheme, there are two options: –

  1. for the customer to be the importer of record – in which case the import VAT will be collected from the customer by the parcel courier, or
  2. for the supplier to be the importer of record, in which case the supplier will be treated as importing their own goods into the EU before the sale to the EU customer, and as a non-established taxable person making an onward supply of goods in the MS of importation, the supplier will be required to VAT register in that member state. They will be able to recover the import VAT but will then account for VAT at the local rate on the local VAT return.


The Union OSS Scheme, formerly MOSS and used to account for VAT on Intra EU supplies of TBE (telecoms, broadcasting and Electronically supplied) services, is extended to cover all B2C services AND intra EU Distance Sales of Goods. This measure will not impact all UK businesses, but supplies of goods from stock held in Northern Ireland, covered under the Northern Ireland Protocol.  are included within this simplification.  There is a pan European threshold of €10,000 (£8,818) applicable to EU and NI established businesses only, below which the supply is treated as subject to VAT in the MS of supply, however where the supplies exceed that threshold, local VAT is required to be accounted for.  Where a NI business registers for the OSS (and it can do so via its UK registration under the NI Protocol) sales above that threshold to other member states are declared via a One Stop Shop (OSS) return, without the former requirement to VAT register in each member state where the distance sales threshold had been reached. Guidance for NI Businesses from HMRC, with worked examples, can be found at  EU VAT e-commerce package – GOV.UK (www.gov.uk)

The Non-Union OSS Scheme, for Non-EU established businesses supplying TBE services to EU consumers is extended to cover all B2C services where the place of supply is the EU. This simplification allows a Non-Union OSS registration to be used to account for VAT on supplies such as those listed below without the need to VAT register in each member state.

  • Accommodation services carried out by non-established taxable persons,
  • Admission to cultural, artistic, sporting, scientific, educational, entertainment or similar events, such as fairs and exhibitions,
  • Transport services,
  • Services of valuation and work on movable tangible property,
  • Ancillary transport activities such as loading, unloading, handling or similar activities, · Services connected to immovable property,
  • Hiring of means of transport,
  • Supply of restaurant and catering services for consumption on board ships, aircraft or trains etc.

Please give us a call on the advice line if you have any questions regarding any of the above points.

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Senior VAT Consultant
0844 892 2470

Hilary has worked in VAT since 1997, including five years with HMRC as an Assurance and Enquiries Officer. She spent eight years as a VAT manager, initially with a mid-tier accountancy firm, followed by six years with PricewaterhouseCoopers.

She has both advisory and compliance experience, working with a wide variety of clients ranging from small owner-managed businesses, to not-for-profit organisations and large multinational corporations, on the full range of VAT technical matters.

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