Practical guide for international retailers · 2026
IOSS and EU VAT rules for ecommerce
How to collect VAT at checkout, transmit the right customs data and account for the temporary €3 customs duty on low-value EU imports.
The basics
What is IOSS?
The Import One-Stop Shop is a VAT scheme for distance sales of goods imported from outside the EU and sold directly to EU consumers in consignments with an intrinsic value of no more than €150.
For an eligible order, the retailer charges the VAT rate of the destination country at checkout and reports it through one monthly IOSS return. This can prevent a separate import VAT request before delivery.
IOSS is optional. Without it, the shopper will normally be asked to pay import VAT — and potentially a carrier handling fee — before the parcel is released.
Scope
Which sales can use IOSS?
An order can normally be reported through IOSS when all the following conditions are met:
- Goods are sold to a consumer in an EU member state.
- The goods are dispatched from outside the EU.
- The intrinsic consignment value is €150 or less.
- The goods are not subject to excise duty.
The €150 test applies to the intrinsic value of the consignment. Transport and insurance costs are excluded when shown separately on the invoice, but included when built into the item price.
Operational flow
How IOSS works from checkout to delivery
Registration alone is not enough. The VAT treatment, invoice and electronic parcel data must agree.
Confirm eligibility
Check destination, origin, consignment value and whether the products fall outside the scheme.
Charge destination VAT
Apply the VAT rate of the EU country of delivery and retain the checkout evidence.
Create accurate shipment data
Keep product descriptions, values, tariff classifications and the commercial invoice consistent.
Transmit the IOSS number securely
Pass it through the authorised electronic customs-data chain; do not display it publicly.
Reconcile and report monthly
Account for eligible sales, cancellations, refunds and the VAT collected in the IOSS return.
Regulatory update
What changed for low-value imports in July 2026?
A temporary €3 customs duty
From 1 July 2026, a temporary flat customs duty of €3 applies to each different category of goods in a small parcel valued below €150 and sent directly to an EU consumer. Categories are identified through their tariff subheadings.
The measure is planned to run until 1 July 2028 and is separate from the proposed handling fee. IOSS still governs VAT; it does not exempt an eligible parcel from this customs duty.
Retailers need to decide how the duty will be calculated, presented and paid. A prepaid model can incorporate expected landed costs; a pay-at-destination model can leave the shopper with a separate request.
Registration route
Do non-EU retailers need an IOSS intermediary?
Many do. A business established outside the EU generally appoints an intermediary, while specific registration routes exist for eligible businesses in Northern Ireland and Norway. Great Britain and Northern Ireland are treated differently, so confirm the legal entity making the sales.
Read the step-by-step guide to choosing an IOSS intermediary.
Delivery responsibilities
IOSS, DDP and DAP: what is the difference?
IOSS is a VAT reporting mechanism. DDP and DAP describe delivery responsibilities and who settles import charges. They answer related but different questions.
| Mechanism | What it controls | What the shopper experiences |
|---|---|---|
| IOSS | How VAT is collected and reported on eligible orders of €150 or less | VAT included at checkout rather than requested at import |
| DDP | The seller takes responsibility for import clearance and applicable charges | A landed cost at checkout and normally nothing further to pay before delivery |
| DAP | The buyer is responsible for import duties, taxes and fees at destination | A separate payment request before the parcel can be released |
Asendia’s customs clearance solutions support prepaid and pay-at-destination models across international parcel flows.
Before launch
IOSS implementation checklist
- Registration route: confirm whether the legal entity can register directly or needs an intermediary.
- Product eligibility: exclude excise goods and route consignments above €150 correctly.
- VAT calculation: apply the destination-country rate and preserve checkout evidence.
- Invoice data: align values, currency, descriptions and tax treatment.
- Tariff classification: use accurate commodity codes for each goods category.
- Secure transmission: pass the IOSS number only through authorised data flows.
- Monthly reporting: reconcile orders, cancellations, refunds and VAT.
- Customer communication: explain every charge included — and not included — at checkout.
Frequently asked questions
IOSS FAQs
Is IOSS mandatory for ecommerce sales to the EU?
No. IOSS is optional. Without it, import VAT is normally collected from the shopper at or before delivery. IOSS moves VAT collection to checkout for eligible orders.
Does IOSS still apply after the €3 customs duty?
Yes. IOSS covers VAT on eligible low-value orders; the temporary €3 amount is a separate customs duty. Using IOSS does not remove it.
Is the €150 threshold based on each item or the consignment?
IOSS eligibility is based on the intrinsic value of the consignment. The temporary duty is assessed per different category of goods, identified by tariff subheading, within the parcel.
Can a marketplace use IOSS?
Yes. In some transactions an electronic interface is treated as the supplier for VAT purposes. Confirm who is responsible before using an IOSS number so the sale is not reported twice.
Is an IOSS number the same as an EORI number?
No. An IOSS number identifies the VAT treatment of eligible low-value sales. An EORI number identifies an economic operator for customs procedures.
