Post-Brexit e-commerce: Simplifying EU Sales with IOSS 2024
April 15, 2024
Robert Ruutsalo
10+ years of experience in international sales management in software and technology.
IOSS & Shopify | EU sales made easy
“What is the relationship between IOSS & Shopify? Are IOSS and Shopify the same thing? What is IOSS? Can I use IOSS? Where to find an IOSS intermediary? What are the IOSS costs? Why would I use IOSS?”
Shopify Community is full of IOSS-related questions but lacks good answers. We are covering the most frequently asked questions here.
Shopify is an easy-to-use online sales platform and it shines when it comes to international sales. Most of the required functionalities for cross-border sales are built-in. Unfortunately, IOSS is one of the few features Shopify simply cannot provide.
What is IOSS & how does it relate to Shopify?
IOSS in a nutshell:
- For deliveries from outside of the EU to EU
- For orders with intrinsic value, i.e., value without taxes, shipping or other fees under 150€
- The seller must be registered for IOSS to take advantage of the scheme
- An intermediary is required for non-EU companies
B2C only - Not bound to any e-commerce platform
- Monthly reporting and payment of VAT
The Import One-Stop-Shop (IOSS) is a simplified VAT collection and reporting solution for goods delivered from outside of the EU to EU end customers.
It improves customer experience by facilitating single-action purchases and faster and cheaper deliveries via a simplified customs process.
IOSS facilitates the collection, declaration, and payment of VAT for sellers making distance sales of goods to buyers in the EU. IOSS also makes the process easier for the buyer, who is only charged all related costs at checkout, and therefore does not face any surprise fees when the goods are delivered. If the seller is not registered in the IOSS, the buyer has to pay the VAT separately at the arrival of goods and a potentially high customs clearance fee charged by the logistics company.
If you are reading this, you are likely very familiar with the fastest-growing e-commerce platform Shopify. Shopify’s operating model is nearing that of a marketplace – but without the extensive costs. The simplicity of Shopify places marketing and sales as the focus. In other words, Shopify and IOSS are the perfect match for e-merchants.
Why would I use IOSS?
IOSS improves customer experience and satisfaction. With IOSS, your customers do not need to hassle with local customs or face any surprising fees upon arrival, everything is paid at checkout. Transparency is always valued, especially when it comes to costs. This correlates directly to reduced returns and increased returning customers.
IOSS deliveries benefit from simplified customs processes and centralised clearance, which means clearance at any EU country instead of destination country customs. This correlates to faster delivery times and cheaper delivery costs. IOSS is not tied to any logistics operator, it gives you the freedom to choose your preferred delivery partners!
There are applications for most common logistics operators for Shopify. Most of them realise the importance of the simplified, cost-efficient delivery method and they have the capabilities to handle IOSS numbers and shipments.
More on how to input your IOSS number to the most common ones here: https://help.easproject.com/hc/en-us/categories/6372877990941-Logistics .
Shopify and IOSS work very well together.
How do I calculate the 150€ IOSS threshold?
The 150€ IOSS threshold is the VAT0 value of the products in the order (excluding taxes AND delivery).
Inclusive VAT
If your prices include VAT, i.e., VAT is not calculated on top of the price you display, but included in the displayed price you have to start by removing VAT from the merchandise costs.
The calculation is:
Product cost / (1 + applicable VAT)
With inclusive pricing, the VAT 0 cost of the product will vary. Hungary has a VAT rate of 27% while Luxembourg has 16%
With a 100€ VAT inclusive product, the VAT zero cost will vary between countries
- Hungary 100€ / 1,27 = 78,74€
- Luxembourg 100€ / 1,16 = 86,21€
- Germany 100€ / 1,19 = 84,03€
This will also affect the 150€ threshold for IOSS shipments. For Hungary, the price with VAT can be 190,5€ while for Luxembourg the price can be only 174€.
Exclusive VAT
If you display your prices without VAT, and VAT is added at the checkout, the IOSS value is the displayed product price BEFORE added taxes.
Who can register for IOSS?
EU companies and non-EU legal entities can register for IOSS. Non-EU companies require an intermediary to be able to use the solution.
A non-EU registering party must be a legal entity (a company, a registered private entrepreneur, or similar). A legal entity registration documentation is always required.
How can I find an IOSS intermediary?
You already found it! EAS can take the role of intermediary for non-EU sellers. We are technically advanced and with EAS it takes about 20 minutes to register a company for IOSS. Since IOSS exposes to risks, it is important to note that EAS risk mitigation depends on our software. We only provide the IOSS number once the software is installed correctly.
A note: do compare the IOSS service provider reviews. The size or cost of the service provider is no guarantee for the level of automation, efficiency or customer service.
How much IOSS costs?
EAS has transparent transaction-based pricing..
EAS fee includes:
- IOSS registration
- IOSS intermediary service
- EAS Shopify app
- Assisted app installation
- EU VAT calculator
- IOSS reporting
- IOSS filing
Is EAS IOSS limited to Shopify only?
No. You can use EAS with multiple eCommerce platforms and sales channels. You can easily add your Kickstarter, Woocommerce or any other sales channel to your EAS Account.
How to get started?
Starting is made easy!
- Book a 15-minute IOSS registration meeting here
- Install the Shopify app or let EAS handle the installation
- Follow EAS instructions on how to register IOSS number with your logistics partners.
- Start selling to the EU!
Detailed IOSS information can be found here (EU commission):
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