IOSS (Import One-Stop Shop)

The Import One-Stop Shop (IOSS) is the EU's simplified VAT registration and reporting system for distance sales of low-value goods (≤€150) imported from outside the EU to consumers in EU member states. Introduced on 1 July 2021 as part of the EU VAT e-commerce package, it allows a seller to register once in a single EU member state, collect VAT at checkout at the customer's local rate, and file a single monthly VAT return covering all 27 EU member states — instead of registering for VAT separately in every destination country.

How IOSS works

Under IOSS, a seller:

1. Registers in one EU member state of choice (or via an intermediary — see below)
2. Obtains an IOSS number (format: IM + 10 digits)
3. Calculates and collects VAT at the point of sale, at the destination country's VAT rate
4. Includes the IOSS number on each parcel's customs declaration
5. Files a single monthly IOSS return covering all EU sales by the end of the following month
6. Makes a single monthly VAT payment to the member state of registration, which distributes amounts to destination countries

When a valid IOSS number is present on the customs declaration, the parcel clears the EU border without the buyer being charged import VAT again at the door — because VAT was already collected at checkout. (EU Taxation & Customs, IOSS official page)

The scheme covers distance sales only — goods physically located outside the EU at the point of sale, shipped directly to a consumer in the EU. It does not cover goods already held in EU warehouses (those fall under the OSS Union scheme). (flexlogistics.eu, 2026)

Who must register

EU-established sellers can register for IOSS directly, with no intermediary required, through their home member state's tax authority.

Non-EU sellers (including UK companies post-Brexit) generally cannot register directly. They must appoint an EU-established intermediary — a taxable person (fiscal representative or compliance firm) who registers and files on the seller's behalf and is jointly and severally liable for the VAT due. (Taxually blog; EU official page) An exception applies to sellers established in countries with a mutual assistance agreement with the EU, who may register directly. (Numeral blog)

Marketplaces are treated as Deemed Suppliers when they facilitate sales of imported goods ≤€150 by a non-EU seller to an EU customer. In this case the marketplace — not the underlying seller — collects and remits the VAT, and holds the IOSS number for those transactions. The seller's VAT liability for marketplace-facilitated sales shifts entirely to the platform. (Numeral blog; official EU page)

In practice this means:

• Amazon (FBA / Pan-EU): Amazon acts as deemed supplier for qualifying non-EU seller imports; Amazon holds the IOSS number and files. (Axelwin blog, 2026)
• Etsy: As a marketplace, Etsy handles VAT collection for eligible imports on behalf of non-EU sellers (strong practitioner signal on r/EtsySellers — see Reddit — IOSS 2026-07-08)
• Shopify (own store): Shopify is not a deemed supplier. Sellers running their own Shopify storefront and shipping from outside the EU hold the IOSS obligation themselves. (Axelwin blog, 2026)

Scale and adoption

• In 2023, VAT declarations processed through IOSS reached over €26.3 billion, a 35% year-on-year increase (as-of 2025-05-15; EU Taxation & Customs, official page)
• In 2024, approximately 4.6 billion packages (~12 million parcels/day) entered the EU from non-EU countries (as-of 2025-05-15; EU Taxation & Customs)
• In 2025, almost 5.9 billion low-value items were shipped directly from third countries to EU consumers (as-of 2026-06-08; EU Taxation & Customs, flat-fee guidance)
• The EU Council stated IOSS covers approximately 93% of all cross-border ecommerce parcels entering the EU (as-of 2025-12-12; EU Council press release)
• Targeted EU27 inspections in 2025 found over 60% of checked low-value products failed EU standards (cosmetics, PPE, food supplements, toys, electronics) — one of the regulatory drivers for the 2026 reform (as-of 2026-06-08; EU Taxation & Customs)

The July 2026 reform: €150 customs duty de minimis abolished

IOSS was designed from the start to collect VAT on imports — but until 1 July 2026, goods valued at ≤€150 were exempt from customs duty (the separate trade tax on top of VAT). That exemption is now gone.

Timeline:

• 13 November 2025: EU Taxation & Customs announced the abolition (as-of 2025-11-13)
• 12 December 2025: EU Council agreed the levy (as-of 2025-12-12; EU Council press release)
• 11 February 2026: EU Council gave final approval (as-of 2026-02-11; EU Council press release)
• Legal instrument: Council Regulation (EU) 2026/382; Commission Implementing Regulation published in Official Journal 8 June 2026 (as-of 2026-06-08; EU Taxation & Customs)
• 1 July 2026: New regime takes effect

IOSS itself is not abolished. The VAT framework — registration, monthly returns, border exemption for IOSS shipments — is entirely unchanged. What changed is the addition of a new customs duty layer on top of the existing IOSS VAT mechanism. (VAT Digital, 2026-06-11)

The €3 flat-fee customs duty (July 2026 – July 2028)

As a transitional measure while the EU Customs Data Hub is built, a temporary flat customs duty of €3 applies to all B2C consignments with an intrinsic value of ≤€150 from 1 July 2026 until 1 July 2028. (EU Taxation & Customs guidance, 2026-06-08)

Key mechanics:

• Scope: Applies to all B2C distance sale imports ≤€150 regardless of VAT scheme used (IOSS, Special Arrangements, or standard import VAT) and regardless of declaration type (H1, H6, or H7) (EU Taxation & Customs, 2026-06-08)

• Per item, not per parcel: The €3 is charged per item grouping — goods sharing the same HS Code Classification|tariff classification, description, and (where required) origin within a consignment. Five identical T-shirts = €3 total. One T-shirt + one watch = €6 total. (EU Taxation & Customs guidance; Zonos, 2026-05-06)
• "Intrinsic value": Means the price of the goods only — excludes shipping, insurance, and other taxes/duties. (Avalara blog, 2025-11)
• Customs debtor: The declarant — typically the IOSS holder (seller or marketplace) — is the primary customs debtor, not the consumer. This is a structural shift from the prior postal model. (Zonos, 2026-05-06)
• Returns: Once a simplified declaration is filed and duty paid, it cannot be invalidated through the standard return process — returned goods do not restore the €3 duty. (Zonos, 2026-05-06)
• Bridge to 2028: From 1 July 2028, the EU Customs Data Hub for ecommerce is expected to be operational and full HS Code Classification-based duties with Rules of Origin will replace the flat fee. (EU Taxation & Customs, 2026-06-08)

Country-level handling fees (separate from the €3 duty): A Union-wide customs handling fee to cover processing costs was proposed but not yet finalised in the April 2026 Delegated Regulation. Individual member states have moved first:

• France: €2 "taxe petit colis" handling fee per H7-cleared low-value import, live from 1 March 2026 (as-of 2026-06-11; VAT Digital)
• Romania: ~€5/parcel, from January 2026 (as-of 2026-05-06; Zonos)
• Italy: handling fee scheduled for 1 July 2026 (as-of 2026-05-06; Zonos)

Product Identifier (PID) requirement

A new mandatory Product Identifier (PID) data field has been added to distance sale declarations:

• Voluntary from 1 July 2026
• Mandatory from 1 November 2026 for all distance sale declarations
• Acceptable formats: SKU, manufacturer product ID, GTIN/EAN/UPC (EU Taxation & Customs guidance, 2026-06-08)

OSS vs. IOSS: the key distinction

Scheme	Covers	Who uses it
IOSS	Goods imported from outside EU ≤€150	Non-EU sellers / marketplaces with non-EU suppliers
OSS (Union)	Goods already inside the EU, sold across member states	EU-established businesses with EU stock

For retailers like ASOS with EU-based distribution centres selling to EU customers, OSS — not IOSS — is the relevant scheme. IOSS applies only where the physical goods are outside the EU at the moment of sale and shipped in at point-of-sale. (flexlogistics.eu, 2026)

ViDA 2028: IOSS expanded

On 18 July 2025, the EU Council formally adopted the ViDA (VAT in the Digital Age) package. From 1 July 2028:

• IOSS is expanded beyond the current ≤€150 ceiling — incentivised as the primary route for all non-EU sellers regardless of shipment value
• Marketplace platforms become deemed importer for goods of any value (removing the €150 cap on the deemed supplier rule)
• The originally proposed mandatory IOSS requirement was downgraded to a series of incentives — non-IOSS suppliers face the risk of multiple VAT registrations across all 27 member states as the disincentive to opt out

UK equivalent: not IOSS

The UK operates its own separate VAT-at-point-of-sale system for imports of ≤£135 (introduced January 2021). It is structurally similar to IOSS but:

• Not called IOSS and not interoperable with it
• Sellers need a separate UK VAT registration and a separate EU IOSS number to sell into both markets
• From 1 April 2026, non-EU/non-NI businesses must use a UK intermediary and obtain a 12-digit IN-prefixed number (GOV.UK, IOSS intermediary scheme guidance, 2026)
• At the UK Autumn Budget 2025, the government announced removal of customs duty relief on low-value imports by March 2029, with a consultation on new arrangements — making a UK equivalent to the EU's €3 duty likely but not yet enacted as of mid-2026 (as-of 2025-11; Avalara blog) (Eightx blog, 2026; Passport Global blog)

Compliance tools and services

Tool	Type	IOSS capability
Taxdoo	Full-service EU VAT compliance	Intermediary registration, monthly return filing, VAT remittance
Avalara AvaTax	Calculation engine + IOSS service	VAT rate calculation at checkout; separate IOSS service (intermediary still needed for filing)
Stripe Tax	Calculation only	Applies destination-country VAT rates for sub-€150 EU orders once IOSS number is entered; does not file monthly returns or remit VAT
Quaderno	Reporting + consolidated return	Generates consolidated IOSS report across Shopify/WooCommerce/Stripe; not an intermediary and does not file returns
(GoodVat comparison guides, 2026; Avalara IOSS solution page)

Key terms

Term	Meaning
IOSS number	IM + 10 digits; included on customs declaration to trigger border VAT exemption
Intermediary	EU-established fiscal rep who registers/files on behalf of non-EU seller; jointly and severally liable
Deemed supplier	Marketplace that takes on the VAT liability for non-EU seller imports ≤€150
H7 declaration	Simplified customs declaration used for IOSS/postal low-value imports
Intrinsic value	Price of goods only (ex-shipping, ex-insurance, ex-duties) — the basis for the ≤€150 threshold
OSS	One-Stop Shop — the domestic EU-stock equivalent (not IOSS)
ViDA	VAT in the Digital Age — the broader 2025–2028 EU VAT reform package
PID	Product Identifier — new mandatory data field on declarations from 1 November 2026

Frontier links

EU Customs Data Hub · ViDA · OSS · Union OSS · Deemed Supplier · Special Arrangements · Product Identifier (PID) · DDP (Delivered Duty Paid) · Rules of Origin · Section 301 Tariffs · Free Trade Zones · Payment Orchestration