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Published:May 17, 2021

E-commerce One Stop Shop must be implemented in Northern Ireland: EU officials

The EU’s new e-commerce VAT regulations take effect from 1 July 2021

E-commerce One Stop Shop must be implemented in Northern Ireland: EU officials

The new rules include a simplified VAT compliance mechanism for e-commerce within the EU, in the form of the One Stop Shop (OSS). In addition, importers will be able to manage VAT compliance on certain goods using the new Import One Stop Shop (IOSS).   

E-commerce businesses based in, or trading with, Northern Ireland may have wondered how these new measures will affect them.  The movement of goods through Northern Ireland is now regulated by the Northern Ireland Protocol. Thus it stands to reason that the IOSS and OSS may be implemented in Northern Ireland.  

On the other hand, VAT in Northern Ireland continues to be managed by HMRC. It is by no means clear cut how and whether UK tax authorities will implement the EU protocols.


EU policy guidance

EU policymakers have now clarified that they expect the new regulations to apply in Northern Ireland.

A recently published note on implementing the Northern Ireland Protocol, written by the “European Commission, Task Force for Relations with the United Kingdom” states that: “the ‘VAT e-commerce package’ (One-Stop-Shop (OSS) for intra-EU distant sales of goods and Import One-Stop-Shop (IOSS)) must be implemented in respect of Northern Ireland.”


What do the OSS and IOSS do?

The OSS and IOSS are new systems that simplify VAT compliance on e-commerce sales. Both the OSS and IOSS enable sellers to account for sales to customers throughout the EU via a single VAT registration. Once registered, VAT on sales is accounted for with a single quarterly digital VAT invoice.

The OSS is applicable in the case of the sale of goods to EU customers whereby the goods are located in the EU at the time of sale. 

By contrast, the IOSS only applies to low value goods (consignments valued at no more than €150) that are outside of the EU when the sale is made.


Keep ahead of changing regulations

We are carefully monitoring the UK authorities' response to the EU guidance. Get in touch with VAT IT for up-to-date information about how developing EU regulation will affect your business. Our expert team can optimise your VAT and customs compliance, in all regulatory environments. 

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