SHIPPING GUIDE 2026-10-06

IOSS: Simplifying EU VAT for Import One Stop Shop

What does IOSS mean for online sellers?

IOSS stands for Import One Stop Shop. It is an EU VAT scheme for distance sales of goods imported from outside the EU to EU consumers when the consignment value does not exceed €150. It simplifies how import VAT is declared and paid on eligible low-value e-commerce shipments, so sellers do not need a separate VAT registration in every EU country. 

For a shopper, VAT is included at checkout, the parcel is declared with the seller's IOSS number, and the import VAT is accounted for through the IOSS return rather than collected at the door. For a seller, the process is centralized: you still apply the correct VAT rate for the customer's EU country, but you report eligible sales through one IOSS channel.

The core idea behind Import One Stop Shop

Without IOSS, import VAT may be collected when the parcel enters the EU or when the customer receives it. The buyer may then face extra carrier handling charges, delivery may slow down, and your support team has to explain costs that were not visible at checkout.

With IOSS, the seller or marketplace charges VAT at the point of sale. The IOSS number is included in the customs declaration by the party lodging it, which signals that import VAT has already been handled. Where a valid IOSS number is included for an eligible consignment, the importation is exempt from import VAT because VAT was charged at the sale stage. 

IOSS is a VAT simplification, not a blanket exemption from all customs rules, product restrictions or documentation requirements. As of 1 July 2026 that distinction matters more than ever.

What the 2026 EU customs reform changed, and what it didn't

The EU's customs reform is often discussed alongside IOSS, which makes it easy to assume IOSS itself was rewritten. It wasn't. The reform changed customs duty, not the VAT scheme.

What did not change

• IOSS is still available for B2C distance sales of imported goods with a consignment value of up to €150.
• VAT is still charged at checkout at the rate of the customer's EU country.
• The IOSS number, the registration route (direct or via an intermediary) and the monthly return all work as before.
• Excise goods remain outside the scheme.

What did change

• The customs duty exemption for parcels of €150 or less ended on 1 July 2026. Previously, low-value parcels paid VAT but no customs duty. That relief has been removed. 
• A temporary flat customs duty of €3 per item now applies. The Council agreed the measure in December 2025 for goods valued under €150 where non-EU sellers are registered in IOSS, a group it says covers around 93% of e-commerce flows into the EU. In practice, "per item" means per distinct customs tariff code in a parcel, so several items sharing one code are charged once. 
• IOSS does not exempt a parcel from this duty. Using IOSS settles the VAT only, so a parcel can be VAT-paid and still carry the €3 duty. 
• Customs data matters more. Because duty is tied to tariff classification, accurate product descriptions and HS codes now affect cost and clearance, not just compliance.

What is coming next

• A €2 EU handling fee per item is expected from 1 November 2026, on top of the €3 duty and VAT. 
• National fees already exist in some Member States, such as France, Italy and Romania, and may overlap with or be replaced by the EU-wide fee. 
• From 1 July 2028, the temporary €3 duty is due to give way to standard tariff rates, applied through the new EU Customs Data Hub. The same reform package signals that Member States intend to encourage use of IOSS from that date. 
• The €150 limit for IOSS VAT purposes is still in place. 

Area	Before 1 July 2026	Now (Oct 2026)	Expected next
IOSS VAT scheme and €150 limit	Applies	Unchanged	Threshold abolition planned, not adopted
Customs duty on parcels ≤ €150	None	€3 flat duty per item	Standard tariffs from July 2028
EU handling fee	None	Not yet in force	€2 per item, expected from Nov 2026

Who can use IOSS and when does it apply?

IOSS applies to distance sales of goods imported from a non-EU country or territory to a customer in the EU, provided the goods are not excise goods and the consignment value does not exceed €150. A clothing accessory sent from a non-EU warehouse to a customer in France may qualify. A higher-value electronics order over €150 would not be covered and needs a different import VAT and customs approach.

Typical users include:

• Non-EU online stores selling directly to EU consumers from warehouses outside the EU.
• EU sellers that import goods from third countries and sell them to EU consumers as distance sales.
• Marketplaces and electronic interfaces treated as facilitating certain sales and responsible for VAT collection.
• Subscription or small-parcel sellers that regularly ship eligible consignments into multiple EU countries.

The IOSS number and why it matters

The IOSS number is the unique VAT identification number issued under the import scheme. It is not just an internal seller ID. It is the identifier used in the import process to show that eligible VAT has been collected and will be declared under IOSS.

Pass it securely to the logistics provider, postal operator, customs broker or platform that needs it for the customs declaration. Do not publish it openly on product pages or invoices, where it could be copied and misused.

Item	What it does	Why it matters
IOSS registration	Enrols the seller or intermediary in the import scheme	Creates the reporting route for eligible EU import VAT
IOSS number	Identifies the seller or deemed supplier in customs data	Helps customs connect the parcel to the IOSS VAT process
Monthly IOSS return	Reports eligible sales and VAT due by EU destination country	Centralizes payment and compliance across EU countries

How IOSS registration usually works

EU-established sellers can generally register in an EU Member State through the relevant national portal. Non-EU sellers are often required to appoint an EU-established intermediary, unless a specific exception applies under EU rules or an agreement between jurisdictions.

Once registered, the seller charges the correct VAT rate at checkout, provides the required shipment data to the declarant, files IOSS returns and pays the VAT due.

A practical preparation checklist:

1. Map your shipping flows. Confirm which goods ship from outside the EU to EU consumers.
2. Check the €150 threshold. Build controls so orders above the limit are not declared under IOSS.
3. Identify excise or restricted goods. These may fall outside the scheme.
4. Choose your registration route. Decide whether to register directly or use an EU intermediary.
5. Update checkout tax logic. Calculate VAT by the buyer's EU country.
6. Coordinate with logistics partners. Make sure the IOSS number can be transmitted securely in customs data.
7. Get customs data right. Maintain accurate product descriptions, values and HS codes, since the €3 duty is tied to tariff classification.
8. Model the new duty and fee. Add the €3 duty, and the €2 handling fee once confirmed, to your landed-cost calculation and decide who pays at delivery.
9. Set up reporting records. Monthly IOSS returns and long-term record-keeping apply to eligible sales.

Registration steps and portals vary by Member State and business structure, so check the relevant official portal or work with a VAT adviser before launching.

What happens if you do not use IOSS?

If you do not use IOSS for an eligible low-value sale, the shipment can still enter the EU, but import VAT will usually be collected another way. The customer may pay VAT and carrier handling charges before delivery, and the order may feel more expensive than the checkout price suggested.

The 2026 reform does not make IOSS a way to avoid duty, and it does not make IOSS pointless. The flat €3 duty was designed around IOSS-registered flows, so IOSS remains the practical route for VAT on low-value B2C parcels. If you ship outside the IOSS flow, ask your customs broker how duty and fees will be applied to your parcels.

IOSS is not mandatory for every seller, but if your checkout promises taxes included while parcels arrive with unpaid VAT, duty or fees, customer trust erodes quickly.

Common mistakes to avoid

IOSS works best when checkout, tax, fulfilment and customs data all match. Avoid these errors:

• Assuming IOSS covers customs duty. It covers VAT only. The €3 duty (and the €2 fee once confirmed) is separate.
• Using IOSS for orders above €150. If a consignment exceeds €150, customs can disregard the IOSS number and charge VAT at import. 
• Weak product data. Duty is tied to tariff classification, so missing or incorrect HS codes can lead to delays and wrong charges.
• Applying one VAT rate to all EU countries. VAT must reflect the buyer's destination country and product type.
• Sharing the IOSS number too widely. Limit access to parties that need it for customs declarations.
• Forgetting returns and cancellations. Your accounting must handle corrections where VAT was collected but the sale changes.
• Mixing marketplace and direct orders. Keep separate workflows for orders where a marketplace collected VAT.
• Missing monthly reporting. IOSS requires periodic returns even when sales volumes fluctuate.

A practical way to decide if IOSS is worth it

If you regularly sell low-value goods into several EU countries, IOSS can replace many destination-specific import VAT surprises with one centralized reporting process. If your EU sales are rare, high-value or mostly handled by marketplaces, your needs may be simpler.

Before registering, review four areas:

1. Your average EU order value, and how many consignments are at or below €150.
2. Whether your checkout can calculate VAT correctly by country.
3. How your logistics providers receive, protect and transmit an IOSS number.
4. How the €3 duty, and the €2 fee if confirmed, affects your margins on low-value orders, and whether you absorb it or pass it on.

If those pieces are not ready, registration alone will not solve the problem. The strongest IOSS setup is operational as much as administrative: product data, tax settings, customs declarations and VAT reports must all tell the same story.

Where this leaves your EU sales

IOSS gives cross-border e-commerce sellers a cleaner way to manage import VAT on eligible low-value goods shipped to EU consumers. The 2026 customs reform left that VAT scheme and its €150 limit intact, but ended duty-free treatment for low-value parcels with a flat €3 duty, with a €2 handling fee expected from November and standard tariffs planned for 2028.

Start by confirming eligibility and choosing the right registration route. Then build the process around accurate VAT calculation, secure use of the IOSS number, reliable customs data and a clear plan for duty and fees. That keeps IOSS a practical tool rather than a source of surprises.