Reference is made to the WP 115 of the Group on the Future of VAT, which can be found HERE.
What is the problem of double taxation?
Two primary causes of double taxation are identified as a result of:
- 1. the non-communication of the supplier’s IOSS number because the postal operator is unable to transmit the IOSS number
- 2. some Member States not being in a position to validate the IOSS number in a full customs declaration (H1)
Despite the fact that IOSS goods are subject to VAT at point of sale, VAT on the importation of IOSS goods also arises where the trader’s valid IOSS number is not provided on the import declaration1. The immediate need to address the reimbursement of this VAT that is charged twice is of utmost priority as this presents a financial risk to suppliers who, in the absence of an effective solution, may have to absorb the cost, although they have not done anything wrong.
Although the situation is different for the supplies in both cases, it is clear that double taxation is contrary to the principles of the VAT system. Therefore, in support of an effective resolution to this problem, the Commission is of the view that it is necessary to adopt and implement an efficient and harmonised EU-wide solution.
