Case Study: US sellers return to the EU with the IOSS

By Camille Felappi

Jan 24, 2023|7 min read

“When the EU introduced this IOSS scheme, it was very complicated to navigate the rules. So Eurora’s solution was excellent for us.”  


We spoke with Ajith Mathew, Senior Contracts Manager at the American Association on Intellectual and Developmental Disabilities (AAIDD), a US-based National Organization. He shared hurdles US-based online sellers faced when the EU introduced new tax rules, and how Eurora’s IOSS service helped him return to the EU market. 

When the EU imposed new tax laws on non-EU sellers, the supply chain derailed. Parcels got lost, stuck in customs, and EU customers were asked for extra fees. As a result, many US sellers like AAIDD had to stop shipping to the EU. Yet, US sellers are generally unaware that they can easily return to the EU market with the Import One Stop Shop (IOSS). Find out below how AAIDD successfully came back into the EU with Eurora’s IOSS service!   


Losing control of the EU market as a US seller

After China, the US is the second largest e-commerce market in the world. With a 22% increase, the US e-commerce market contributed to a worldwide growth rate of 18% in 2021. While these numbers illustrate the prosperity of the US e-commerce economy, they highlight the challenges facing US online sellers. The boom of e-commerce in the US created a fierce competitive landscape. With the domestic market saturated, online sellers expanded into new markets, including the EU. The EU is the world’s largest single market area with 500+ million potential consumers and a very attractive market for US sellers. In 2021, the US was the second largest partner for EU imports of goods.  

Yet, reaching EU consumers is a double-edged sword for US online sellers. On the one hand, consumers want the shopping experience to be as easy as buying at their local store. On the other hand, the EU has imposed new tax regulations that complicate the whole process. From July 2021, all imported goods are subject to EU VAT, regardless of their value. The VAT is a consumption tax imposed on EU consumers. This rule completely derailed the cross-border supply chain as most online sellers had no idea how to collect and manage the EU VAT.  

“It was very complicated to navigate the rules. We stopped shipping to the EU because we couldn’t manage the VAT requirements,” recalls Ajith. Just like AAIDD, a tremendous number of online sellers from around the globe lost control of their EU sales. John Greenhalgh, Co-Founder of a UK-based online shop that had to cut off his EU sales noted: “we just sent a few parcels, but everything went missing, got returned, got lost, so we just turned off the EU selling.” David Rogers, Director of an Australian-based business that got lost in the VAT maze said: “we had absolutely no clue what to charge, we were losing money, we were charging too much, or our customers had to pay tax when the package arrived.”  


Finding about the IOSS to win back the EU

Although these new rules seem chaotic, the EU doors haven’t shut to US sellers for good. In fact, Ajith quickly found his way back into the EU when he heard of the Import One Stop Shop (IOSS). “It was important for AAIDD to be able to provide its members and others who reside in the EU with access to its books and tools. With the introduction of the Import One-Stop-Shop (IOSS) scheme, AAIDD needed a partner who could help AAIDD comply with EU VAT requirements.” The IOSS scheme was introduced by the EU following the new tax rules. It simplifies the EU VAT management, collection, and return for non-EU sellers like AAIDD. To use the IOSS scheme, they need a fiscal representative like Eurora that will get their IOSS number and return the VAT to the relevant tax authority each month.  

Ajith started looking for partners and compared the services and pricing offered. He turned to Eurora’s IOSS service because it suited his needs and budget. “We identified multiple agencies and compared services and prices. Eurora rose to the top of the list. Many of the agencies that we looked at had complicated systems for high-volume sales, but Eurora was able to provide a solution fitting our needs,” said Ajith. “Our initial contact with Eurora was with Ardi, and we were impressed with his detailed knowledge of IOSS and VAT processes. We were also pleased that Eurora’s pricing fit our budget,“ he added.  


Shipping to the EU again with Eurora IOSS service

Ajith started using Eurora’s IOSS solution in October 2021 and was able to deliver to the EU again in no time. “This was very new to us, so Eurora gave us a very clear overview of how to proceed with the IOSS. They gave us clear instructions on what we needed to do to get registered for an IOSS number and to calculate the VAT for each member country.” “The registration with Eurora was very easy”, Ajith said, only pointing out that the EU requests different documents compared to the US: “We had to find appropriate substitutes for requested personal documents that are not used for business purposes in the US.”  

After registering AAIDD for the IOSS, Eurora helped successfully implement the collection of EU VAT on their website. “Eurora also provided helpful information that enabled us to modify our online sales platform to collect the appropriate VAT amounts and create sales reports that accurately document our VAT payment obligations.” With the IOSS, Ajith only needs to charge EU VAT at checkout, and report his EU sales to his dedicated Tax Consultant at Eurora once a month. “Each month, we get a reminder from our Tax Consultant about the monthly EU sales report due, so we can send it to Eurora on time, and then they take care of the tax return on our behalf.” When asked what the IOSS service changes for his daily work, Ajith reported that: “It makes life much easier; it is very easy.” He plans to use Eurora’s IOSS service as long as AAIDD is selling to the EU. 


AAIDD, and Eurora

AAIDD is a not-for-profit nongovernmental membership organization whose activities enhance the capacity of researchers, clinicians, teachers, policy analysts, and other professionals who work to improve the quality of life of people with intellectual and developmental disabilities. AAIDD offers high quality educational books, scholarly journals, assessment instruments, and educational activities for professionals in the field of intellectual and developmental disabilities.  

Eurora simplifies and speeds up global trade by automating compliance processes with secure AI-based solutions. Using Eurora’s platform makes sure you delight your customers with full cost transparency and faster delivery while reducing your manual labor and time spent on compliance. In addition to the IOSS service, you can use Eurora’s cross-border compliance platform to:        

  • Assign HS codes: Get the correct HS/HTS code for your goods in real-time. We support up to 10 digits HS codes and country-specific nomenclatures.    
  • Calculate Duty & Tax: display the applicable VAT and duty rates in real-time at checkout. We support any currency and more than 160 countries.    
  • Check for restrictions: check if your items are subject to any import/export restrictions, and make sure your customer is not on any denied parties` list. Our database covers most countries in the world.    


Are you looking for an easy and affordable solution to expand your sales in the EU? Check out our IOSS packages or get in touch with us!