VAT changes from 01 July 2021: IOSS Procedure for the Import of Goods up to 150 €

With the introduction of the new distance selling regulation, Non-EU and EU entrepreneurs can report their distance sales with a value amounting up to 150 € via IOSS, if those goods are importer by the seller from a non-EU country within the shipment of the goods to the B2C costumers in the EU. The import then is tax exempt.  

However, all non-EU countries (currently except from Norway), need an EU-representative for IOSS purposes. As this representative is liable for all VAT declared via IOSS, we can unfortunately not act as representative (comparable to the indirect customs representation topic). We also expect that other service providers will not bear that risk or only under assessment of a high security deposit.

In this case, you have the following options to act under for sales to EU B2C customers as of July 1, 2021:

a)    Set up a shelf company for representation purposes in the EU
b)    Search for a foreign representative (service provider) in this regard
c)    Only sell to EU B2C-customers (no matter if above or below € 150,00) without being the importer of records (customer is responsible for customs declaration and duties)

Taking these options into consideration, option a) seems to be the best for a smooth business operation under the new EU distance selling legislation.

Use shelf companies to establish an IOSS representative in the EU

A shelf company is usually a limited liability company in the form of a GmbH or UG (haftungsbeschränkt) that KBHT has already registered with the commercial register to support clients in quickly setting up a business. The company has a starting capital of EUR 25,000 (GmbH) or EUR 1,000 (UG) respectively and is economically unencumbered when it is sold to the client.
The shelf company is capable of acting immediately after the acquisition. Our lawyers are here to help you and can represent you during the acquisition process. The company you have acquired in this way can thus quickly act as an IOSS representative for your company.
According to our examination, the aforementioned procedure that allows you to establish an IOSS representative by founding or acquiring a German company complies with the legal requirements.

Acquire your shelf company now and benefit from the IOSS procedure

You currently do not know how you can meet the requirements for the representative for the IOSS procedure? We are here to assist you. Simply give us a call or drop us an email. Together with our lawyers and consultants, we will draw up a strategy for the acquisition of a shelf company tailored to your individual requirements. On top of that, we offer you additional services for tax and legal support.

Free initial consultation