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VAT Fraud & Import One Stop Shop (IOSS)

The IOSS should help EU states collect more Value Added Tax on supplies from third countries. A letter from the German Federal Ministry of Finance shows: This will probably not work.

Source Taxdoo

Note from VATupdate:

The new EU VAT e-commerce rules are supposed to create a level playing field for all e-commerce sales to EU consumers. Simply said: sellers must charge local VAT on their distance sales, irrespective of where they are based or where the goods are coming from. If the goods come from a non-EU country, they can use the iOSS scheme for reporting the VAT on their sales and to claim an exemption from VAT on the importation of goods.

And that last part is an opportunity for fraudsters, as they can abuse the iOSS number of sellers to get goods VAT free into Europe. It is therefore strange that tax authorities are communicating the iOSS numbers ‘openly’, where VAT intermediaries try to treat the numbers as confidential as possible. It seems to us that VAT intermediaries should get the same protection as platforms with regard to liability of the VAT due by the non-EU sellers, especially if these VAT intermediaries are doing everything within their power to protect the sellers and themselves from iOSS fraud. If this is not done by the tax authorities, the seller and the VAT intermediary should not be held responsible and liable for any abuse or fraud with the iOSS numbers.


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