The cross-border e-commerce industry is in full swing, but tax issues are always around, and the terminology of VAT, EORI, OSS, and IOSS are like signposts in a maze, making sellers curious and confused. Today, we will unveil the mystery of these terms and light up your cross-border journey.
01
VAT, or Value Added Tax, is a tax levied on the increase in value of goods generated during the distribution process. For cross-border e-commerce sellers, understanding and complying with the VAT rates and payment rules of each EU country is an important part of ensuring a compliant business. From checking the tax rate to paying the tax, every step of the process needs to be handled with care.
02
EORI, the Economic Operator Registration and Identification Code, is the necessary "identity card" for cross-border e-commerce activities in the EU. It not only simplifies the customs clearance process, but is also a symbol of your corporate identity. Whether you are a new seller or an experienced player, having an EORI number is the key to open the EU market.
03
VAT vs EORI
Obtained through: VAT needs to be registered through a tax agent or official channel, while EORI is often obtained together with the VAT application.
Functionality: The EORI number passes through the customs of the European Union, while the VAT number relates to the payment of Value Added Tax (VAT).
Requirements: The EORI number is required for cross-border trade even if the company does not meet the VAT registration threshold.
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04
Which sellers need to register for VAT?
Import of EU goods
Use of Amazon warehouses or warehousing within the EU, transportation of goods within the EU across national borders, sales of over-quota goods to individual buyers in the EU, sales of goods to corporate sellers in the EU
After registering for VAT, you can choose to file online or appoint a professional accountant to act on your behalf. Given the complexity of European taxation, the latter is often more secure.
05
OSS, a one-stop filing system, is designed to simplify VAT filing for cross-border sales within the European Union. Through OSS, sellers can standardize their VAT filing across EU countries, saving time and effort.
06
IOSS, an import one-stop filing system, is designed for cross-border e-commerce. It allows sellers to handle VAT issues on goods imported into the EU more conveniently and speeds up the process of customs clearance.
07
OSS vs IOSS
OSS applies to cross-border sales within the EU
IOSS applies to low-value goods (≤€150) sold to EU consumers from non-EU countries.
08
Which sellers need to register for IOSS/OSS?
Platform sellers: usually by the platform on behalf of the labor, but self-built sites and offline transactions sellers need to consider their own
EU companies can register and declare IOSS on their own.
For non-EU companies, this is done through an EU tax agent.
Master this tax knowledge to make your cross-border e-commerce journey smoother and more hassle-free!
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