IOSS Update: How to Handle Double Taxation?

Back in July 2021, The European Union (EU) introduced new reforms to the VAT obligations for B2C e-commerce sellers and marketplaces, and the Import One-Stop Shop (IOSS) was set to enable sellers to comply with new VAT obligations. For a refresher on the topic, please read our article: Is your business ready for the new EU VAT rules?

The IOSS scheme has proven to be effective in limiting the number of unexpected additional charges for consumers. But there have been some corner cases where VAT was collected twice, once at point of sale and once again during the import process.

So how can you recoup this double taxation? The good news is that there is a mechanism for ecommerce shippers to reclaim their money by submitting a claim on subsequent IOSS returns which include a section for such corrections/claims for VAT overpayments.

Please contact your EU financial intermediary or marketplace to determine what is required to claim a refund on double-taxed items. Feel free to contact us for any additional guidance.