The European Union implemented a Value-Added Tax (VAT) scheme that went into effect July 1, 2021. This scheme makes every order into the EU, regardless of value, subject to VAT and expands the VAT collection options by introducing IOSS (Import One-Stop Shop).
Here is a high-level summary of the changes:
To read in detail about all of the options, take a look at our EU VAT guide.
The end of the €22 de minimis in the EU means that every order regardless of value is subject to VAT. If you are using Landed Cost to calculate duties and taxes into the EU, you don’t have to change anything as long as you are sending your shipments with duties and taxes prepaid. Zonos handles your landed cost calculations according to the tax scheme on all of your low-value orders.
If you have an ecommerce business that ships high volumes of low-value goods into the EU, you may choose to switch to the optional method of VAT collection called Import One-Stop Shop (IOSS). If you choose this method, you need to follow the guidelines to get registered for IOSS as outlined in our EU VAT guide. Once you are registered, you need to activate IOSS by adding your EU VAT number in Zonos Dashboard.\
For anyone with a high volume of shipments into the EU, Zonos recommends IOSS because this method helps to expedite the clearance process for your international EU shipments, ensures a smoother delivery process, and may eliminate carrier fees for your shipments.
With your IOSS shipments, you can expect the following:
What about my high-value orders?
IOSS does not apply to high-value orders(over €150). VAT and duty are still collected on orders over €150 if your store is set to pre-collect duties and taxes. You need to ship these orders with duties and taxes prepaid (DDP/DTP) and bill the duties and taxes back to yourself. You do not need to remit the VAT collected on these high-value orders.
How can Zonos help?
Zonos Landed Cost Guarantee - Landed Cost Guarantee (LCG) ensures landed cost accuracy for every international sale and manages non-resident country tax schemes (UK, EU, AU, NZ, NO) by tracking country thresholds and collecting taxes for you only when the threshold is met to avoid over-or-under collecting on taxes. For the EU and UK, Zonos also remits VAT on your behalf under LCG.
Other countries with non-resident country tax schemes include:
See Zonospolicies and agreements.
Zonos and the EU VAT scheme
Learn how Zonos manages the EU VAT scheme.