How to handle IOSS double taxation?
VAT and handling fees charged despite IOSS shipment
Once an IOSS number is issued it is available for all EU customs to check if it is valid. Unless you have instructed your Intermediary to cancel it or you, it is valid. Full. Stop. So the problem is: your customer is being demanded VAT and often ridiculous amounts as fees by your logistics operator.
Sometimes the logistics operator / customs are ok if you provide them with the IOSS number, sometimes they insist on the customer to provide it. Please find a way to provide the number without disclosing it to 3rd parties – which the customer is in this case. Avoid if you can.
But since your goods are absolutely best and wanted around the world, your customers often pay the ransom to get the goods. We don’t have an absolute solution for you on how to handle the second VAT paid by the customer. We recommend refunding the customer for the full amount, including the fees. You can correct the IOSS VAT report via EAS Dashboard, instructions here: https://help.easproject.com/hc/en-us/articles/9358065950237-Manual-VAT-corrections. Do save the documentation on double payment, in case of audit they will be checked.
And then there is the erroneously corrected fee part. If you have correctly input the IOSS number to the logistics partner or software, you should be able to get the fees reimbursed by making a claim with them. At least they will have to investigate the issue.
And that is the start of the most important part: the mishandled IOSS shipments CANNOT overlooked, they have to be fixed.
One known issue you can affect is, that some logistics operators will not take the IOSS data if HS code is missing. There is no legal backing for the operating model, but the logistics companies can be very stubborn. Unfortunately it is not sufficient to make sure you have the HS codes for your products, you will also have to make sure the HS code can be passed on to the logistics solution you are using.
The second issue is the transfer the IOSS number from your logistics software along to the logistics operators. Unfortunately size or reputation do not guarantee a seamless data management. To begin the process of making sure this is the last time this occurs, contact your logistics software provider. So your claim to the software / first mile logistics provider will begin this process.
To start clearing the issue of double VAT demands with IOSS shipments:
- Make sure you have input the IOSS number to your logistics software
- Make sure you have all the data available for them, including HS code (might have to input manually)
- Contact your logistics software provider and make a claim
- They will begin the investigation
- Check back in with them, they are not quick…
- Inform us! Informally is fine, just include shipping details! We want to learn!
Everyone involved is learning. But, there will always be issues. We can make them rarer with each claim.
1. Is my IOSS number invalid?
Unless you have instructed your Intermediary to cancel it, it is valid. As an EU based company, you can cancel the IOSS number yourself.
2. How can I check if the IOSS number is valid?
Yes, you can always ask your Intermediary. An EU company can check in their tax administration portal.
3. Can I check a validity of a random IOSS number?
No. IOSS numbers are not public data.
4. What can I do to make sure IOSS shipments go through as intended?
- Make sure your IOSS number is correctly input to your logistics partner, or to your logistics software.
- Make sure all the data is available.
5. I had IOSS number printed on the invoice and VAT was charged?
Customs data is transferred electronically in EU. Never expose your IOSS number on your packages. Printing IOSS number anywhere only exposes you to risk.
5. Should I give my IOSS number to a customer who is asking for it to avoid paying VAT again?
Sometimes there is a way for you to provide the IOSS number directly to the customs, do try at least. And if nothing else works, then just make sure the customer knows the importance of the IOSS number.
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Sell easily to the EU again via your Woocommerce store with IOSS
Want to sell to the EU? IOSS is the way to go! Brexit and EU regulatory changes have pretty much seized all cross-border commerce from outside of EU.
How to handle IOSS double taxation?
Learn how to solve the unfortunate issue when VAT and handling fees charged despite IOSS shipment.
Union-OSS VAT filing (step 3) | EU VAT compliance guide
Submitting the OSS report and paying the VAT is done through the national tax office portal where you find your other taxation details and did the Union-OSS registration