In this article, we are discussing the situation as of 1 July 2021 where Swiss sellers sell low value goods (not exceeding EUR 150) to consumers in the EU via their own web shops and ship goods from Switzerland into the EU.
With the removal of the import VAT exemption for goods not exceeding EUR 22, all commercial goods imported into the EU are subject to VAT, at the applicable rate in the arrival country. There are two ways in which VAT is collected:
IOSS is a new system for reporting and collecting VAT on B2C sales of low value goods imported from non-EU countries. It is aimed to reduce the pressure on the customs clearance of low-value goods and simplify the import procedures. The term “low-value goods” refers to goods with a value (not including separately stated transportation costs and VAT) not exceeding EUR 150, excluding some products subject to consumption tax (such as tobacco and alcohol). In addition, the value of the product is calculated as the total of the value of all the products in a single package.
The use of the IOSS regime is voluntary. However, if the IOSS regime is applied, there are obvious benefits, including:
Swiss sellers should register for the IOSS regime only through a VAT intermediary, who is resident in the EU. Once registered, the Swiss sellers should submit monthly IOSS returns and pay the VAT amounts to the country of registration on a monthly basis. The tax authority in the country of registration will distribute the tax to the other EU Member States according to the IOSS returns submitted. The VAT intermediary will be responsible for submitting monthly IOSS returns and making VAT payments on behalf of the sellers.
This article only briefly discussed the new rules for reporting low-value goods. If you are interested in learning more about the upcoming changes as of 1 July 2021 and our services, please reach out to us.