The Import One-Stop Shop (IOSS), launched in July 2021, reshaped how VAT is handled on low-value goods sold to EU consumers from outside the EU. Before its introduction, businesses faced a complex web of VAT rules across EU Member States. This often meant:
- Multiple VAT registrations
- Different VAT rates
- Varying reporting obligations
The IOSS simplifies this by allowing businesses to register in a single EU country to report and pay VAT for all eligible EU sales through a single online portal. This scheme applies to goods valued at €150 or less, imported from outside the EU and sold business-to-consumer (B2C) to EU customers. It is used by e-commerce sellers, online marketplaces and non-EU retailers selling into the EU.
What is the Import One-Stop Shop (IOSS)?
Prior to 1 July 2021, EU VAT rules meant no import VAT was required for low-value commercial goods (up to a value of €22). This created a competitive advantage for non-EU sellers over EU businesses, who had to charge VAT on similar sales. With the IOSS, all imported goods to the EU now have a VAT requirement, no matter their value.
To avoid complex import VAT processes, the IOSS was introduced. It allows businesses to:
- Charge VAT at the point of sales
- Declare and pay VAT through a single monthly return
- Avoid registering for VAT in every Member State where customers are based
In short, it is a “one-stop shop” for VAT on low-value imports.
What are benefits of the IOSS?
The IOSS streamlines the VAT reporting process, saving time, reducing costs and simplifying cross-border e-commerce.
Key benefits include:
- Single registration: Register in just one EU country to cover all 27 Member States
- VAT collected at purchase: VAT is collected at the point of sale, so buyers know the full cost upfront. No more hidden charges or surprise custom fees on delivery
- Faster customs clearance: An IOSS number speeds up shipments through EU customs, reducing delivery delays
- Fairer competition: EU sellers are no longer at a disadvantage against non-EU sellers
For marketplaces and non-EU sellers, this means smoother operations and a better customer experience.
How does the IOSS work?
IOSS-registered sellers must charge VAT at the point of sale and apply the VAT rate of the customer’s delivery country. For example, a UK seller exporting a €100 item to France would charge 20% VAT, while the same item sold to Germany would be subject to 19% VAT. The IOSS portal then allows businesses to declare and pay this VAT in one monthly return and one monthly payment to your Member State of registration.
Registering for the IOSS
Any business can register for IOSS in an EU Member State. However, non-EU businesses (including UK sellers, post Brexit) must appoint an EU-established intermediary. An intermediary is any taxable person based within the EU and they register for IOSS on your behalf. After receiving an IOSS VAT identification number, they can fulfill your VAT obligations under the IOSS, including VAT declarations and payments.
Once registered, your IOSS number can be used for all qualifying distances sales of imported goods to EU consumers.
What do you need to do if using the IOSS?
If you use the IOSS, you must meet several ongoing requirements:
- Apply the correct local VAT rate for the buyer’s country
- Display the amount of VAT to be paid by the buyer at checkout, ensuring transparency for the buyers
- Collect VAT on all qualifying sales
- All eligible goods to be shipped are under €150 in value
- Display prices in euro, including VAT on invoices, whenever possible
- Submit a single monthly IOSS VAT return
- Make a monthly VAT payment to the Member State where registered
- Keep records of all IOSS sales for ten years
- Provide required information for customs clearance in the EU, including yourIOSS VAT identification number
Following these requirements helps you stay compliant, avoid penalties and improve the buyer experience.
Important exceptions
IOSS cannot be used in certain situations. For example:
- If multiple items are sold to the same buyer exceeds €150 in value in total, VAT is due at import instead
- IOSS does not apply to goods already located inside the EU
- In these cases, standard import VAT rules apply
EU Member States covered by IOSS
- Austria
- Belgium
- Bulgaria
- Croatia
- Cyprus
- Czechia
- Denmark
- Estonia
- Finland
- France
- Germany
- Greece
- Hungary
- Ireland
- Italy
- Latvia
- Lithuania
- Luxembourg
- Malta
- Netherlands
- Poland
- Portugal
- Romania
- Slovakia
- Slovenia
- Spain
- Sweden
Impact of ViDA: Key changes for IOSS and platforms
The EU’s VAT in the Digital Age (ViDA) aims to minimise the need for multiple VAT registrations and improve VAT collection across borders. By 2028, the Single VAT Registration (SVR) pillar will allow companies to manage almost all their cross-border VAT obligations through a single portal in their home Member State.
ViDA will also tighten the rules for electronic interfaces such as marketplaces and platforms to ensure fair competition and improve collection rates.
1. Platforms become deemed supplier (from 1 January 2027)
Currently, the use of IOSS is optional for marketplaces and platforms, but ViDA makes the use of IOSS a must for platforms facilitating B2C sales.
From 1 January 2027, the marketplaces will become the “deemed supplier” for all eligible imports they facilitate. The platform, not the underlying seller, will be responsible for charging and paying VAT. This ensures VAT is collected at the point of sales and improves compliance for imported goods.
2. Enhancement of the IOSS (from 1 July 2028)
New rules will strengthen the IOSS scheme and discourage businesses from avoiding it. Key changes include:
- Non-EU sellers not using the IOSS may be required to appoint a fiscal representative
- Member States may require financial guarantees from IOSS intermediaries
- Customs representatives may become jointly liable for import VAT
- Customers may be required to pay import VAT only as a last-resort fallback
These measures are designed to push businesses towards using IOSS as the default compliance route. In practice, this is likely to make traditional import VAT registration routes far less attractive.
IOSS vs OSS?
While the IOSS covers imported goods from outside the EU, the One-Stop Shop (OSS) applies to domestic and intra-EU B2C sales. Both systems streamline VAT reporting, but the IOSS is specifically designed for imports. For a breakdown on the OSS, check out our OSS Guide Everything You Need to Know.
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Authors
Helen Long
As Fintua’s Content Marketing Manager, Helen creates content that helps tax and finance professionals stay informed of the ever-changing world of VAT.
