EU import scheme (IOSS)

When low-value goods go straight from outside the EU to consumers in the EU (dropshipping from a supplier in Asia, for example), import VAT would normally be collected at customs as each parcel arrives. The EU import scheme (Import One-Stop Shop, IOSS) moves that VAT to the sale instead. You charge VAT at the customer's country's rate when they pay, the parcel clears customs under your IOSS number with no import VAT, and you declare it all on one monthly return in e-MTA. This page covers recording an IOSS registration in Arvello, invoicing and importing IOSS orders, and the monthly IOSS return.

Which sales IOSS covers

IOSS covers distance sales of goods sent directly from outside the EU to customers in the EU who aren't businesses with an EU VAT number, where:

• the consignment's intrinsic value is at most EUR 150. That's the goods' price without VAT, leaving out transport and insurance when you charge them separately, in euros on the day payment is accepted;
• the goods aren't excise goods, such as alcohol or tobacco.

Customers in every EU country are covered, Estonia included. Goods first stored in an EU warehouse and sent from there aren't IOSS sales: they're ordinary sales within the EU (for sales to consumers in other EU countries, see EU One-Stop Shop (OSS)). When you sell through a marketplace that collects the VAT itself as the deemed supplier, the marketplace declares the sale, not you. Arvello refuses an IOSS invoice to a business whose VAT number VIES has confirmed: that sale is business-to-business.

Once you're registered, IOSS covers all your qualifying sales. You can't use it for some sales and not others.

Recording your IOSS registration

You apply for IOSS in e-MTA. An Estonian company can apply directly, without an intermediary, and the scheme doesn't need a VAT registration. EMTA then issues an IOSS number: IM followed by 10 digits. Record it in Settings → Company, in the EU import scheme (IOSS) card:

Saving the registration adds 2120 IOSS VAT payable to your chart of accounts (and the OSS accounts 2110 and 1210, where those codes are free). If one of your own accounts already uses 2120, Arvello says so; give that account another code and save again.

The dates are a record of your registration, so Arvello won't let you change them in a way that would leave an IOSS sale you've already finalised, or a return you've approved or filed, outside them. Arvello keeps only one IOSS registration: if you leave the scheme and join it again later, Arvello can't record the new registration yet while sales or returns from the first would fall outside it, and dates spanning the gap would ask for returns for the months in between.

Once a return has gone to EMTA under your IOSS number, Arvello won't change the number until every month of the registration has a filed return, months without sales included (IOSS needs a return for each): each return goes to EMTA under the number the goods cleared customs with. To switch to a new number, set Registration ended on to the old number's last day, file its returns up to that month, then enter the new number and clear the end date. That assumes the new number applies from the next day: with a gap between the two registrations, clearing the end date would ask for returns for the months in between. Arvello keeps one return per month, so it can't split a month between two numbers. Until a return has gone to EMTA under it, a mistyped number can be corrected at any time.

If your company isn't VAT registered, the VAT registration threshold card leaves out IOSS sales to customers in other EU countries. Only turnover supplied in Estonia counts towards the EUR 40,000 threshold, and an IOSS sale is supplied where the goods are delivered, so IOSS sales to customers in Estonia still count.

Invoicing an IOSS sale

While your registration is in force, two IOSS tax codes join the tax code list:

An IOSS invoice is one consignment, so every line on it uses an IOSS code. Once a line does, the invoice asks for the consignment's details:

• Customer's country (IOSS): where the goods are delivered. Any EU country can be chosen, Estonia included. Northern Ireland isn't supported, because its imports clear UK customs.
• Payment accepted on: the day the payment, or the customer's commitment to pay, came in. This is when IOSS VAT becomes due, so it decides which month's return the sale goes on and which VAT rate applies, whatever the invoice date. It can't be in the future, and your registration must be in force on it.
• Order or consignment number: your order or shipment number, kept with the sale in your IOSS records. A consignment is one sale, so its number can be on one invoice at a time, drafts included. To invoice an order again, first delete its invoice if it's a draft, or cancel it or credit it in full.
• Value of the goods: left empty, it's the invoice's net total. Lower it when transport or insurance is charged separately. It can't be more than the net total or more than EUR 150; an invoice in another currency is converted at the European Central Bank rate for the day payment was accepted, since that's when the value is fixed in euros.
• The goods go straight from outside the EU to the customer, and none are excise goods: a confirmation. Without it the sale isn't an IOSS sale.

VAT rates work as they do for OSS lines. A standard-rate code uses the country's standard rate on the payment date. A reduced-rate code asks you to pick one of the country's reduced rates, and which one applies depends on the product and the country's rules. Other rate takes a rate Arvello's table doesn't list, once you confirm you've checked it applies.

Importing orders from a CSV file

For more than a handful of orders, Sales → Invoices → Import IOSS orders turns a CSV file into IOSS invoices, one per order. The same button is on the IOSS Returns page. Download a template gives a file with the columns in place.

The file has one row per order:

Each order goes to the customer named in the file, or, without a name, to one contact per country, such as IOSS customers (DE). An order number that already has an invoice is skipped, so after fixing the rows that failed, the same file can be imported again. That holds even if the same file is imported twice at the same time, say from two browser tabs: each order is invoiced once, and the other import lists it as skipped. The results list every order that wasn't finalised and why.

Imported invoices are ordinary IOSS invoices: they're listed under Sales → Invoices, and the payments for them are matched in banking as usual.

How IOSS invoices are booked

• The VAT on IOSS lines goes to 2120 IOSS VAT payable. It's owed through the IOSS return, so it never appears on the KMD, and a filed KMD doesn't lock an IOSS invoice.
• The sale itself is booked as revenue, as on any invoice.

The monthly IOSS return

Company Tax → IOSS Returns lists every month of your registration. A return is due for each month, including a nil return for a month with no IOSS sales, by the last day of the next month. The deadline stays put when it falls on a weekend or public holiday. The dashboard shows the next one, and Arvello emails a reminder between the 20th and the 28th while that month's return isn't filed. If Arvello sent the return over X-tee and EMTA's answer never settled it, the reminder asks you to check e-MTA before filing it again, since EMTA may already have it. Months from before Arvello started filing your returns show as Filed outside Arvello. Once a month's return is approved or filed in Arvello, the month Arvello starts filing can't be moved past it while your books cover that month; reopen an approved return first. Likewise, while a month's return is approved but not yet filed, where your books begin (set with your opening balances) can't move past that month: mark the return filed, or reopen it, first.

A month's return is computed from your issued IOSS invoices and credit notes, by the month payment was accepted:

• Sales by country and rate: one line per country and VAT rate, with the taxable amount and the VAT in euros.
• Corrections to earlier months: changes to months you've already approved, such as a credit note or a cancelled invoice, per month and country.
• Balance per country: this month's VAT plus its corrections. EMTA collects the positive balances. A negative balance isn't netted against other countries: that country's tax authority refunds it.

Sales in another currency are converted at the European Central Bank rate for the month's last day, or for the next day a rate was published. Until that rate is out, the figures use the latest rate and the return can't be approved yet.

Filing straight to EMTA

Where direct filing has been enabled on your account, an approved return also shows File with EMTA. Arvello sends the return to EMTA over X-tee, Estonia's secure data-exchange layer, and asks EMTA to confirm it. Once EMTA confirms it, the return is filed and final, as if you'd uploaded and confirmed it in e-MTA. EMTA usually answers within minutes: Arvello checks by itself every 15 minutes, and Check status asks straight away. EMTA's answer is one of three:

• Filed: the return is marked as filed. EMTA's X-tee answer doesn't include the payment reference number, so copy it from e-MTA into the field on the return.
• Created but not confirmed: EMTA created the return in e-MTA but didn't confirm it, usually because of a warning. Its messages are on the return. Check the return in e-MTA and confirm it there. For 30 days after sending, Arvello keeps checking every 15 minutes and marks the return filed once it's confirmed; Check status checks at once, and you can also mark it as filed yourself.
• Not accepted: nothing was filed. Fix what EMTA reports and file again, or download the file and upload it in e-MTA.

If the connection fails while the return is being sent, or EMTA's answer can't be read, it isn't known whether EMTA received it. Give EMTA time to process it (it can take hours), then check e-MTA before filing again: Arvello asks you to confirm that you have, for that attempt.

While Arvello is waiting for EMTA's answer, the return can't be marked as filed by hand or reopened. If EMTA hasn't answered within 72 hours, check e-MTA: once you find the return there, mark it as filed. A return EMTA has taken can't be reopened. One it didn't accept can, and so can one whose outcome is unknown or that wasn't confirmed, once you confirm that e-MTA holds no filed or unconfirmed copy from that attempt. Arvello files directly only when your filing settings say Arvello files your VAT returns, and only for periods from when it started; otherwise the file upload is the way.

In Banking → Needs Attention, a payment to EMTA that carries the reference number you saved with a filed IOSS return is matched automatically to 2120, unless it carries the reference of more than one return (or the same reference was saved on two returns), since Arvello then can't tell which one it pays. Until you save the reference, a payment of exactly what an approved or filed IOSS return has to pay waits for you instead (for up to 90 days after the return's due date, after which it's matched as a general tax payment); once you save it, a payment carrying the reference is matched to 2120. When you reconcile one by hand, you can mark it as paying The IOSS VAT return, which books it against 2120. A refund of a negative balance is matched as a Tax refund of type OSS or IOSS VAT refund (a return's negative balance), which clears it from 1210.

A filed IOSS return can't be changed. When something about a month you've already approved changes later (a credit note, a cancelled invoice, a sale whose payment was accepted in that month), Arvello puts the difference into the next return's corrections, per month and country. Corrections can go back three years from the original return's deadline. After that, a change has to be corrected directly with that country's tax authority, and the return tells you so. The same applies once your IOSS registration has ended and every return from the sale's month to its last has been approved: no return is left to carry the change, so Arvello won't finalise or cancel an invoice that would need one. If that last return hasn't been filed yet, reopen it first. Months filed outside Arvello are the exception: Arvello doesn't know what was declared for them, so a later change to one of them isn't added to any later return's corrections. If the change wasn't on the return filed for that month, it goes in the corrections part of the next return you file, and you enter it yourself in e-MTA: the file Arvello prepares leaves it out, and a return Arvello sends over X-tee is confirmed as it arrives.

Credit notes for IOSS sales

A credit note for an IOSS invoice keeps that sale's country, VAT rates and payment date, so it counts in the sale's month: inside that month's own return while it hasn't been approved, or as a correction for that month in a later one. A credit note dated in the future counts from its own date: a return approved before then leaves it out, and a later one picks it up. Its VAT comes off 2120. A credit note for an IOSS sale can be issued while your IOSS registration is in force on its date; after the registration has ended, the correction has to be made directly with the tax authority of the customer's country.

Keeping records

IOSS records must be kept for 10 years from the end of the year of the sale, longer than the usual 7 years for accounting records. They include each sale's consignment or order number, which is why Arvello asks for it.

Not available yet

• Importing orders straight from Shopify, WooCommerce or other shop platforms. Export the orders as a CSV file and import that.
• Recurring invoices made from an IOSS invoice.
• Creating an IOSS invoice from a bank payment during reconciliation. Create it under Sales → Invoices, then match the payment to it.