Onboarding
I am a non-EU based seller registered for the IOSS scheme and I would like Taxually to start preparing and filing my IOSS returns. What do I need to know?
We are happy to handle the IOSS returns on your behalf. It is important to note that in such cases, your IOSS number will surely change, and this may lead to small interruptions in your business depending on where you are registered for IOSS.
This is because in the case of non-EU based sellers, the IOSS number is linked to the EU-based intermediary appointed who is jointly liable for all VAT obligations relating to IOSS. This means that whenever you decide to change your service provider, your IOSS number will change (even if both your previous and new providers are established in the same EU country).
Nevertheless, our primary aim is to minimize the risk (and length) of such small interruption and thus we are committed to coordinating with all parties involved in order to achieve the best possible outcome.
How do you perform the IOSS transfer in practice?
Depending on your country of establishment, we can obtain a new IOSS number for you either in France or in Poland as these are the countries where Taxually can legally act as an IOSS intermediary.
First, your existing IOSS number needs to be terminated, and we can only file the application for a new French or Polish IOSS number once that deregistration is completed and officially confirmed.
How will you ensure a smooth transition of my IOSS compliance?
Our aim is to coordinate with you and your previous service provider (either through you or directly) to optimize the information flow. Here is how it will happen:
You will sign the IOSS registration documents available on CrossTax
Your previous IOSS Service Provider will deregister your current IOSS number and confirm with us once the deregistration is effective.
Taxually will immediately apply for a new IOSS number on your behalf, which should only take 2-3 days
How can we avoid any interruption in business during the IOSS transition?
To ensure continuity, the EU rules provide for an interim period of 2 months after the deregistration until the old IOSS number could still be used in theory. Based on recent experience, some Member States, however, do not seem to acknowledge this rule in practice.
Another issue we have seen is that it might take some time for the tax authorities to add the newly assigned IOSS number to the database available to the EU tax authorities and this delay can also lead to confusion (it might be perceived that the previous IOSS number is already invalid, but the new one does not appear as active yet).
How do you suggest tackling those technical difficulties to ensure continuity?
Conscious of these difficulties, as mentioned above, we always do our utmost to coordinate between the deregistration and the new registration in terms of timing but there are some external factors (implementation of rules, timing differences) that we have no influence on.
Unfortunately, there is no public database where the validity of each IOSS number could be checked. Nevertheless, we kindly ask you to collect the proof of deregistration from your previous service provider and we will also provide you with the confirmation of the new IOSS number without delay - you may use the above as supporting documentation when dealing with different tax authorities and customs brokers.
This process sounds complex for a simplified scheme. Are you sure there is no other workaround?
The onboarding process might sound complex indeed, but it is much simpler than it looks if it is well-coordinated by all parties involved. Provided that we have all necessary signed documents in place by the time the deregistration takes place and we are to file the new IOSS registration application in France or Poland, we only need 2-3 days to complete it.
Also, once your new IOSS number is fully operational, the compliance process is very straightforward, and you can use your new IOSS number for trading purposes in the same way as the old one. Indeed, there are a couple of aspects we need to consider during the onboarding in terms of timing, but we are here to guide you through each step. We also believe that it is better to get prepared for any potential hick-ups upfront and the purpose of this FAQ is exactly that: to give you a heads-up rather than to face unpleasant surprises as we go along.
Monthly filings
I have an IOSS number with one of the Taxually entities being my IOSS intermediary. What is going to be the monthly compliance process for me?
Ensuring that your company is compliant with the applicable regulations (i.e. your returns are submitted correctly and on time as well as the respective payment reaches the authorities within the statutory deadline) is our utmost priority - therefore, we kindly ask you to follow the steps below:
Please upload your data by the 8th of every month or enable the API option so we can pull the data for you on your behalf;
The return will then be ready for your review and approval in a few minutes;
Please review the error log and the calculations and if you agree with the content of the draft files, please approve the return under your account; alternatively, if you find that changes are required to the data based on the error log, please make the necessary amendments or contact our Customer Care team if case of any doubts;
Once the return is approved, please make the payment according to the details indicated in the pop-up window appearing under the payable VAT amount; it is essential that that payment be available on our bank account at least 3 working days before the statutory due date.
Why do I have to pay into a Taxually bank account?
As your IOSS intermediary, Taxually is jointly liable for your reporting and payment obligations. Based on the respective EU rules, all IOSS payments should reach the tax authorities through the intermediary.
What happens if I do not upload data?
When signing up with us, you have agreed to our Terms of Services where Point 4.2.8. specifically states that if no data is available on the 9th calendar day of the month following the reporting period, we understand that a nil IOSS return is to be filed for the period. Unlike in the case of regular VAT returns, once a nil IOSS return is filed, depending on the Member State where you are registered for IOSS, we may not be able to re-open the same period or make payments for that specific month.
Therefore, if you upload data later than the 8th, it is possible that we can only report your transactions in the next IOSS return as a correction (the consequences of this are detailed further below).
Also, we keep monitoring the status of our clients’ data upload. If we find that you did not load data for two consecutive periods (and thus we have filed nil returns), we will contact you and discuss the reasons. If our query and two reminders remain unanswered, we will have no choice but to resign as your IOSS intermediary, meaning that your company will not be able to continue its operations under the IOSS number assigned through us.
What happens if I upload the data late?
When signing up with us, you have agreed to our Terms of Services where Point 4.2.8. specifically states that if no data is available on the 9th calendar day of the month following the reporting period, we understand that a nil IOSS return is to be filed for the period. Unlike in the case of regular VAT returns, once a nil IOSS return is filed, we cannot re-open the same period or make payments for that specific month.
Therefore, if you upload data later than the 8th, it is possible that we can only report your transactions in the next IOSS return as a correction (the consequences of this are detailed further below). If you are not able to meet this internal deadline for any reason, please contact us so we can see if we can find an alternative solution for you.
What happens if I do not pay the calculated VAT amount?
You will receive 3 reminders from us, asking you to transfer the payable IOSS VAT amount to us. If our emails remain unresponded and no money is received within 10 days of the statutory deadline, we will have no choice but to resign as your IOSS intermediary, meaning that your company will not be able to continue its operations under the IOSS number assigned through us.
What happens if I pay the calculated VAT amount late?
Please ensure that the correct amount reaches our bank account at least 3 working days before the statutory due date. If this does not happen, you will receive reminders from us in due course. However, if the calculated VAT amount is received late, we will not be able to file a correct IOSS return for you within the statutory deadline as we cannot file anything without having received the payment first. Similarly, we cannot make the IOSS payment for you within the statutory deadline.
The potential consequences of this is that the tax authorities of the EU countries where you had sold goods to may issue notifications of late payment interest which your company should pay to all these authorities separately, resulting in a significant administrative burden. Additionally, handling all these notifications may also be subject to a separate service charge on our end.
Can I file a corrective return to the period in question?
Unlike in the case of standard VAT returns, no corrective returns can be filed which would replace the originally filed return relating to the period in question.
Corrections can only be made through the Correction section of a following IOSS return.
What are the consequences of submitting a corrective return?
The correction part is additional work for us which is subject to a separate fee on top of your yearly subscription. Please see our price list here.
Also, the tax authorities of the EU countries where you had sold goods to will consider the reporting and payment late (as the correction is submitted at least a month later than the original return should have been); consequently, they will issue notifications of late payment interest which your company should pay to all these authorities separately, resulting in a significant administrative burden. Additionally, handling all these notifications may also be subject to a separate service charge on our end.
Can I report a negative amount in the IOSS return, e.g. due to credit notes issued in a later period?
Credit notes issued in a later period are to be reported in the Correction section of a following return, naming the original period the credit note relates to.
Generally, the main part of the IOSS return referring to supplies carried out in the return period concerned cannot be negative (part 2a). However, the correction part (part 3) can be negative. Thus, while the balance of VAT due for a Member State of consumption (part 4) can be negative, the total amount of VAT due for all Member States of consumption (part 5) cannot.
How will I receive the amount that is to be refunded to me?
Such amounts should be reimbursed to the intermediary by the Member State of consumption and we will then refund the amount in question to you.
Just to summarize, what can I do to ensure full compliance?
Please upload and approve your data by the 8th calendar day of each month.
Please always check the payment instructions relating to your IOSS return on our portal and make the transfer to us accordingly.
Please ensure that the correct amount reaches our bank account at least 3 working days before the statutory due date - this will help us allocate proper resources and is a good buffer for any unexpected delays on the banks’ side.
Need help?
Please feel free to book a call or create a ticket and our team will be able to provide guidance. Please let us know by sending a message to hello@taxually.com or through chat.
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