What Is IOSS?
The Import One-Stop Shop (IOSS) is an EU mechanism that allows online sellers outside the EU to collect and remit Value Added Tax (VAT) at the point of sale for goods shipped to EU consumers. It was introduced on July 1, 2021 as part of the EU VAT e-commerce package.
Without IOSS, EU customers face unexpected VAT charges and customs processing fees when their package arrives. With IOSS, VAT is collected at checkout, and the package clears customs without delays or surprise charges.
| Scenario | Without IOSS | With IOSS |
|---|---|---|
| VAT collection | Collected at delivery by carrier | Collected at checkout by seller |
| Customs processing | Package held, customer pays fees | Cleared automatically, no delays |
| Customer experience | Surprise charges, returns, complaints | Transparent — total price at checkout |
| Cart abandonment | Higher (unexpected costs) | Lower (no surprises) |
| Admin burden | Per-country VAT registration | Single monthly filing via IOSS |
Who Should Register for IOSS?
IOSS is designed for:
- Non-EU online sellers shipping directly to EU consumers (B2C)
- Marketplace platforms facilitating sales to EU consumers
- Fulfillment-by-Marketplace sellers (e.g., Amazon, eBay) — note that the marketplace may handle IOSS on your behalf
Eligibility Requirements
- Goods must be shipped from outside the EU directly to EU consumers
- Consignment value must not exceed €150 (changing July 2026 — see below)
- Goods must not be subject to excise duties (alcohol, tobacco, etc.)
- Non-EU sellers must appoint an EU-established intermediary to register on their behalf
How to Register for IOSS: Step-by-Step
Step 1: Choose an IOSS Intermediary
Non-EU sellers cannot register directly — you must use an EU-established intermediary. The intermediary handles:
- IOSS registration with the tax authority in their EU member state
- Monthly VAT return filing on your behalf
- VAT payment to EU tax authorities
- Compliance and record-keeping
Popular IOSS intermediaries include Taxdoo, Avalara, Ship24, and SimplyVAT. Costs range from €100-€500/month depending on transaction volume.
Step 2: Provide Required Information
- Business name, address, and registration details
- VAT identification number (if applicable in your country)
- Contact person details
- Website URL(s)
Step 3: Receive Your IOSS Number
After registration (typically 1-3 weeks), you receive a unique IOSS identification number starting with "IM" followed by 10 digits. This number must be included on all customs declarations for EU shipments.
Step 4: Configure Your Checkout
Update your ecommerce platform to charge the correct VAT rate for each EU country at checkout. Rates range from 17% (Luxembourg) to 27% (Hungary).
EU VAT Rates by Country
| Country | Standard VAT Rate | Country | Standard VAT Rate |
|---|---|---|---|
| Austria | 20% | Italy | 22% |
| Belgium | 21% | Latvia | 21% |
| Bulgaria | 20% | Lithuania | 21% |
| Croatia | 25% | Luxembourg | 17% |
| Czech Republic | 21% | Malta | 18% |
| Denmark | 25% | Netherlands | 21% |
| Estonia | 22% | Poland | 23% |
| Finland | 25.5% | Portugal | 23% |
| France | 20% | Romania | 19% |
| Germany | 19% | Slovakia | 23% |
| Greece | 24% | Slovenia | 22% |
| Hungary | 27% | Spain | 21% |
| Ireland | 23% | Sweden | 25% |
Frequently Asked Questions
Is IOSS mandatory for selling to EU customers?
No, IOSS is optional but highly recommended. Without IOSS, your EU customers will be charged VAT and customs processing fees upon delivery — leading to higher cart abandonment, more returns, and worse customer experience. The administrative cost of IOSS (€100-€500/month) is typically offset by increased conversion rates.
Can I register for IOSS directly as a non-EU seller?
No. Non-EU sellers must appoint an EU-established intermediary to register on their behalf. The intermediary handles registration, monthly VAT filing, and payment. Popular intermediaries include Taxdoo, Avalara, Ship24, and SimplyVAT.
What happens to IOSS when the €150 threshold is abolished?
When the EU abolishes the €150 customs duty threshold in July 2026, IOSS will be expanded to cover all B2C import consignments regardless of value. This means every non-EU seller shipping to EU consumers — at any price point — will benefit from IOSS registration to provide a smooth delivery experience.
How often do I need to file IOSS returns?
IOSS VAT returns are filed monthly via your intermediary. They cover all EU-wide sales from the previous month, broken down by member state and VAT rate. Payment is made to the member state of identification (where your intermediary is registered), which then distributes to other member states.
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