New EU VAT Changes


As of July 1st 2021, the EU will be rolling out the Import One Stop Shop (IOSS) Scheme. This new scheme affects businesses who sell to EU customers.

What is changing?

  • The exemption on VAT and duties on orders below €22 will end. All orders of any value will now be subject to VAT and duties.
  • If you register for (IOSS), it is possible for you to charge VAT on behalf of the EU on orders up to €150 in value.
  • If the value of the order is over €150, you can’t charge VAT and the customer has to pay VAT and duties when they receive their goods.
  • To avoid the €150 limit, you would have to physically import the goods into the EU, warehouse them and then dispatch their orders from the warehouse.
What business owners need to do?

You can continue operating as per usual sending goods to customers in the EU, resulting in your customers being responsible for paying any VAT and duties owed for the goods. This now includes any VAT and duties on any orders below €22.

You can also choose to register for the IOSS Scheme in an EU country of your choice. This will require you to appoint an EU-established intermediary to fulfil any VAT obligations as well as submitting a monthly VAT return using the IOSS portal. If you choose to do this, you can then begin to charge VAT on orders below €150, meaning your customers then don’t need to pay VAT themselves.

As always, we recommend that you get in touch with your accountant or financial advisor for any specific questions regarding the IOSS Scheme.

Read more about the EU VAT Changes in our guide here.

If you’d like to learn more about setting up your own online shop, read on for more insights into running your own online business here.

Posted by
Rachel Smith

A professional marketer with a degree in BSc Marketing and Public Relations, with over five years experience in the finance, energy and ecommerce industry. Loves all animals and can be found scrolling through Rightmove in search of my dream house.