Implementing IOSS: A Step-by-Step Guide for Businesses

In short: To implement IOSS (the EU's Import One Stop Shop), check that you ship goods into the EU in consignments of €150 or less. Then register for an IOSS number, usually through an EU intermediary if you are located outside of the EU. Charge the customer's local VAT at checkout, pass your IOSS number to your carrier and file one monthly return.

Updated October 2026: We re-checked the €3 customs duty against Council of the EU and European Commission sources, added what happens after 1 July 2028, and added the €2 handling fee set in a draft Commission act.

The EU introduced the Import One Stop Shop (IOSS) on 1 July 2021. It lets online sellers collect VAT at the point of sale instead of at the border. This guide walks you through implementation, from eligibility to monthly returns. For an overview of the scheme itself, read our complete guide to the Import One Stop Shop (IOSS). If you are still deciding between schemes, read OSS and IOSS: what's the difference? first.

What is IOSS?

IOSS is an optional EU VAT scheme for distance sales of goods imported from outside the EU in consignments worth €150 or less. You charge VAT when the customer pays, then declare it in one monthly return.

Without IOSS, import VAT is due when the parcel enters the EU. With IOSS, the goods clear customs without import VAT, because you have already charged it. One registration covers sales to customers in all 27 EU countries.

IOSS sits alongside the One Stop Shop (OSS). OSS covers sales of goods that are already inside the EU, plus B2C services. IOSS covers goods that start outside the EU. Our guide to EU VAT OSS and IOSS for distance selling in 2026 explains how the two fit together.

Step 1: Are you eligible for IOSS?

You are eligible if you sell goods to EU consumers and ship them from outside the EU in consignments worth €150 or less. Both EU and non-EU sellers can use the scheme.

The IOSS is an EU initiative to simplify how online sellers collect, declare and pay VAT. It applies to any seller that imports goods into the EU for B2C customers. It does not cover B2B sales.

Which goods can you sell under IOSS?

You can sell most goods, as long as each consignment is worth no more than €150. The limit applies per consignment, not per item.

• Value: the intrinsic value of the goods, without transport and insurance costs if shown separately.
• Excluded: goods subject to excise duties, such as alcohol and tobacco.
• Consignments exceeding €150: cannot use IOSS. Normal import VAT and customs rules apply.

What if you sell through online marketplaces?

If you sell through an online marketplace, the marketplace usually handles the VAT for you. EU law treats the platform as the deemed supplier of imported goods worth €150 or less that it facilitates.

In that case, the marketplace charges VAT at checkout and uses its own IOSS number. You do not need your own IOSS registration for those sales. You still need it for sales through your own web shop.

Step 2: How do you register for IOSS?

You register online with one EU Member State, called the Member State of identification. Which country depends on where you are established.

• EU business: the country where your business is established.
• Non-EU business with a fixed establishment in the EU: a country where you have that establishment.
• Non-EU business without one: the country where your intermediary is registered.

You give details such as your legal name, address, trading names and website addresses. If you start selling before you register, tell your Member State of identification by the 10th day of the month after your first supply.

Do all non-EU sellers need an IOSS intermediary?

Almost all do. The exception is a seller established in a country that has a VAT mutual assistance agreement with the EU, and only for goods shipped from that country. The European Commission gives Norway as the example.

The intermediary must be a taxable person established in the EU. It registers in its own Member State and receives an intermediary number, which is not a VAT number. It then gets a separate IOSS number for each seller it represents.

• Liability: the intermediary is liable for the VAT and IOSS obligations of each seller it represents.
• Extra conditions: Member States may ask intermediaries for a guarantee.
• Not the same as a fiscal representative: an IOSS intermediary only covers the IOSS scheme. A fiscal representative handles a local VAT registration.

Step 3: How do you set up your ecommerce system for IOSS?

Set up your checkout to charge VAT at the rate of the customer's EU country, and to send your IOSS number with each shipment. Do this before your first IOSS sale.

1. Detect the destination country from the delivery address.
2. Apply the right VAT rate for that country and product. Rates differ across EU countries.
3. Check the consignment value and block IOSS for orders over €150.
4. Show VAT-inclusive prices so the customer pays nothing extra at delivery.
5. Pass your IOSS number to your carrier or customs agent electronically, not on the parcel label.
6. Issue invoices that show the VAT charged.

Guard your IOSS number. Anyone who uses it on a customs declaration can make you liable for the VAT on that parcel.

Step 4: How do you charge VAT to customers?

Under IOSS, you charge customers VAT at the rate of the EU Member State where the goods are delivered. You collect it from the customer when they pay.

Keep a record of every IOSS sale. Include the VAT collected, the delivery address and the consignment value. These records make your monthly return quicker and more accurate.

Step 5: How do you file IOSS VAT returns?

You file one IOSS return each month with your Member State of identification. It shows the VAT due for each EU country of consumption.

Your Member State of identification then passes the VAT to each country. You do not deal with 27 tax authorities.

When are IOSS returns due?

Each return and its payment are due by the end of the month after the tax period. The deadline does not move if it falls on a weekend or public holiday.

• Nil returns: file a return even for a month with no sales.
• Currency: returns are generally made out in euro.
• Corrections: fix a submitted return in a later return, within three years of the original due date.

How long must you keep IOSS records?

You must keep records of every IOSS sale for 10 years from the end of the year of the transaction. This applies even after you leave the scheme.

• What to keep: enough detail for any EU country of consumption to check that the VAT declared is correct.
• Access: make records available electronically and without delay when a Member State asks.
• Intermediaries: agree in writing who holds the records, because the intermediary carries the liability.

Step 6: How do you stay compliant with IOSS?

Review your setup regularly against rule changes. VAT rates, customs rules and reporting duties change, and IOSS is affected by all three.

• Check VAT rates in your checkout at least quarterly.
• Reconcile IOSS sales with carrier data each month.
• Watch for sales that go over €150 after discounts, bundles or currency changes.
• Keep up with the 2026 customs changes below.

What are the most common IOSS mistakes?

Most problems come from data that does not match between your shop, your carrier and your return.

• IOSS number missing from the customs data: the parcel is treated as a normal import, and the customer pays VAT again.
• Wrong VAT rate: using one rate for all EU countries instead of the customer's country rate.
• Orders exceeding €150: these cannot go through IOSS, even if you charged VAT at checkout.
• Late or missing nil returns: repeated failures can lead to exclusion from the scheme.
• Returns not adjusted: refunds to customers must be corrected in a later return.

What happens if you don't use IOSS?

If you don't use IOSS, VAT is collected when the goods enter the EU instead of at checkout. Your customer may then face extra charges and delays.

• Special arrangements: the postal operator, courier or customs agent collects import VAT from the customer at delivery. Carriers may add their own clearance fee.
• Standard import: import VAT and duty are paid when the goods are declared, by you as importer (delivered duty paid) or by the customer.
• Consignments exceeding €150: neither IOSS nor the special arrangements can be used. Normal customs and import VAT rules apply.

Since 1 July 2026, the €3 customs duty applies under IOSS and under both of these routes.

What changes for IOSS sellers from July 2026?

Goods worth €150 or less are no longer free of customs duty. Since 1 July 2026, a temporary flat duty of €3 per item applies to distance sales in consignments of €150 or less.

The Council of the EU adopted the rule on 11 February 2026 as Council Regulation (EU) 2026/382. IOSS itself is unchanged: the €150 VAT limit, monthly returns and the intermediary rule still apply.

How does the €3 customs duty work?

• Amount: €3 per item. An item is a tariff category, not a single piece.
• Period: 1 July 2026 until 1 July 2028. After that, distance-sold goods of any value are due to pay normal customs duty rates, once the EU customs data hub is running. If the hub is not ready, the Commission may propose an extension.
• Scope: distance sales in consignments of €150 or less, whether you use IOSS, the special arrangements or standard import.
• Who pays: the declarant. For IOSS sales, that is the IOSS seller or its indirect representative. The customer pays only in limited cases.
• Product identifiers: optional from 1 July 2026 and mandatory in customs declarations from 1 November 2026.

How is the €3 duty counted?

The duty is charged per tariff category in a consignment, not per parcel or per piece. The European Commission and the Council give these examples:

Do you charge VAT on the €3 duty?

Under IOSS, no. Ireland's Revenue Commissioners confirm that no VAT is charged on the €3 duty when IOSS is used. Without IOSS, the duty is added to the value of the goods, so import VAT is charged on it.

What is the status of the EU customs reform?

The wider EU customs reform has been adopted and is in force. It will be phased in over several years.

• 3 September 2026: the Council gave final approval.
• 16 September 2026: the European Parliament and the Council adopted the reform. It was then published in the Official Journal and entered into force.
• By 1 November 2026: an EU-wide handling fee on distance-sales items. A draft Commission delegated act dated 21 September 2026 sets it at €2 per item. It applies 10 days after publication in the Official Journal, so check the final text before you price it in. Unlike the €3 duty, it has no end date.
• 2027: the new EU Customs Authority starts work in Lille, France.
• 1 July 2028: use of the EU customs data hub becomes mandatory for e-commerce.
• Platforms: non-EU e-commerce platforms will be treated as the importer of goods they sell into the EU.
• Penalties: serious breaches can bring fines of up to 6% of a company's annual import value.

Does ViDA change IOSS?

Only in small ways so far. The EU's VAT in the Digital Age (ViDA) package entered into force on 14 April 2025.

• 14 April 2025: better control tools for IOSS, including monthly listings per country of consumption.
• 1 January 2027: minor clarifications for OSS and IOSS users.
• 1 July 2028: wider single VAT registration measures, including OSS for transfers of own goods.

How do you sell to EU customers from the US or China under €150?

Register for IOSS through an EU intermediary, charge the customer's local VAT at checkout and file one monthly return. Since July 2026, also budget for the €3 duty per item, and the handling fee (€2 per item in the draft act) from November.

1. Confirm each consignment is worth €150 or less and contains no excise goods.
2. Appoint an EU-established intermediary, unless an exception applies to you.
3. Get your IOSS number and pass it to your carrier or customs agent.
4. Show VAT-inclusive prices at the customer's country rate.
5. Agree who declares the goods and pays the €3 duty and any handling fee.
6. File and pay the IOSS return by the end of the following month.
7. Keep records for 10 years.

If you also hold stock in an EU warehouse, you may need OSS or a local VAT number as well.

How can Taxually help?

Taxually helps online sellers with EU VAT registrations and returns through CrossTax. To discuss IOSS and your wider VAT setup, book a free call with one of our VAT experts.

Sources

• European Commission: Register in OSS (including IOSS and intermediaries)
• European Commission: Declare and pay in OSS
• European Commission: guidance and legal text on the temporary €3 duty
• Council of the EU: final green light to customs duty rules for small parcels (11 February 2026)
• Council of the EU: Council greenlights customs reform (3 September 2026)
• European Commission: EU Customs Reform
• European Commission: customs guidance on the EUR 3 customs duty
• European Commission: draft delegated regulation on the Union handling fee, C(2026) 6694 (21 September 2026)
• Revenue (Ireland): de minimis removal FAQs
• European Commission: VAT in the Digital Age (ViDA)

How Taxually handles this

Taxually’s CrossTax handles VAT registration, VAT, OSS and IOSS returns and fiscal representation in the countries you sell into, and checks your sales data against 250+ validation rules before each filing. OneTax then pays every tax authority with one bulk payment in your chosen currency.

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