Import VAT, OSS/IOSS & Sales Tax Compliance for Cross-Border Business

The Import One Stop Shop is an EU scheme that lets a seller collect VAT at the point of sale on consignments imported into the EU below the low-value threshold, then remit it through a single monthly return rather than registering in each member state. It removes the surprise VAT bill and handling fee that customs otherwise charges the customer on delivery. Non-EU established sellers generally need an IOSS intermediary. TaxDo manages IOSS registration, intermediary arrangements, monthly returns, and the underlying transaction data, alongside OSS for goods already inside the EU.

The EU has agreed to end the customs duty relief that applied to consignments below the low-value threshold, with a transitional flat customs charge on e-commerce parcels shipped directly to EU consumers ahead of the full customs reform. The practical effect is that VAT and customs duty must now both be determined at the point of sale rather than VAT alone, and IOSS no longer covers the whole obligation. TaxDo determines VAT and duty together on every cross-border order and keeps the treatment current as the transition rules take effect. Confirm current dates and rates with your customs adviser before relying on them commercially.

An Economic Operators Registration and Identification number identifies a business to customs authorities in the EU and UK. Any business acting as importer or exporter of record needs one, and separate numbers are required for the EU and Great Britain. Customs declarations are rejected without a valid EORI, and an invalid or mismatched EORI is a common cause of goods being held at the border. TaxDo validates EORI and VAT registrations against official sources before shipment and monitors them for status changes.

Under Delivered Duty Paid the seller is responsible for import VAT and customs duty and typically acts as importer of record, which usually creates a registration obligation in the destination country. Under Delivered At Place the buyer clears the goods and pays import charges, so the seller avoids the registration but the customer receives an unexpected bill on delivery. The choice therefore determines both your registration footprint and your conversion rate. TaxDo determines the correct import party per shipment, quotes landed cost at checkout for DDP, and tracks the registration obligations each model creates.

Import VAT paid by a registered business is generally recoverable through its VAT return in that country, or through a refund claim where the business is not registered there. The EU operates refund procedures for both EU-established and non-EU-established claimants, each with its own deadline and evidence requirements, and the UK runs postponed VAT accounting so import VAT is declared and recovered on the same return. Claims fail most often on missing import documents or an invalid supplier registration. TaxDo tracks recoverable import VAT per shipment, validates the supporting registrations, and prepares the claim.

Place of supply rules decide which country has the right to tax a service. For business-to-consumer digital and electronically supplied services the place of supply is generally where the customer is located, so VAT or GST is due at the customer's local rate regardless of where the seller is established. More than a hundred countries now operate a registration regime for non-resident digital sellers. For business-to-business supplies the place of supply usually shifts to the customer under reverse charge. TaxDo determines place of supply per transaction using validated customer evidence and applies the correct treatment.

Reverse charge shifts responsibility for accounting for VAT from the supplier to the business customer, so the supplier invoices without VAT. It applies only where the customer is a business with a valid VAT registration in the destination country, and the supplier must be able to evidence that the number was valid at the time of supply. An invalid or unverified number means the supplier owes the VAT it never charged. TaxDo validates the customer's VAT number in real time against EU VIES, HMRC, and national authority databases and retains the verification evidence.

Many countries require a business with no local establishment to appoint a fiscal representative that is jointly liable for the VAT before granting a registration. Requirements vary widely: some EU member states require it for all non-EU established businesses, others waive it where a mutual assistance agreement exists, and some require a bank guarantee instead. TaxDo determines whether representation is required for each registration, manages the appointment, and maintains the registration and filing obligations that follow.

Landed cost is the total delivered cost of a cross-border order including product price, shipping, customs duty, import VAT or GST, and any brokerage or handling fees. Showing it at checkout under a Delivered Duty Paid model removes the surprise charge on delivery, which is a leading cause of refused parcels and support contacts on international orders. TaxDo calculates landed cost in real time using HS classification, country of origin, customs valuation rules, and destination VAT rates, and returns it to your checkout in a single call.