The Import One-Stop Shop (IOSS) is an EU value-added tax (VAT) registration scheme. It lets businesses collect VAT at checkout on low-value goods shipped to EU consumers, rather than making customers pay for it when their package clears customs. IOSS shapes how VAT gets collected for any business that ships physical goods to EU customers from outside the bloc. More than €33 billion in VAT revenues were collected in 2024 in the EU.

Below, we'll cover how the scheme works for cross-border sellers, when a non-EU business needs to bring in an intermediary, and where the scheme's limits and risks appear.

Key takeaways

• IOSS lets businesses collect VAT at checkout on low-value EU-bound goods, so customers don't receive a surprise bill at delivery.

• Non-EU businesses established in countries without a VAT mutual assistance agreement are required to appoint an EU-based intermediary to register for and file under IOSS.

• The scheme is voluntary, but skipping it often leads to more customs delays and abandoned packages.

What is IOSS?

IOSS is an EU VAT collection scheme for low-value goods imported into the EU. It applies when goods are valued at €150 or less per consignment, the buyer is in the EU, and the shipment originates outside the EU. Once those conditions are met, the business charges VAT at the time of sale. The buyer's country tax rate is applied and its IOSS number is included on the customs declaration. Customs clears the package without charging VAT again or holding it for assessment.

How does IOSS work for cross-border sellers?

A business that engages in cross-border business registers for IOSS in one EU member state and gets a single IOSS identification number, no matter how many countries it has customers in.

From there, the process runs through three stages each month:

1. Collecting VAT at checkout: The business charges VAT on the qualifying sale at the rate set by the buyer's country. Identical products can generate different VAT amounts depending on where the order ships.

2. Filing one monthly return: Instead of filing separately in every country where it has customers, the business submits a single IOSS return to its member state of registration, categorised by country and VAT rate.

3. Remitting a consolidated payment: The business pays the total VAT collected to its registration country. That country's tax authority distributes the appropriate share to each EU member state involved.

What's the difference between IOSS, OSS, and MOSS?

These three VAT schemes apply to B2C sales in the EU, but each has a different scope. Knowing which one applies determines where a business registers and which sales it reports.

IOSS

IOSS covers physical goods valued at €150 or less, shipped into the EU from outside it. A business manufacturing earbuds in China and shipping them directly to EU buyers would register under IOSS.

OSS

The One Stop Shop (OSS) covers intra-EU sales of goods and digital services. Once a company's combined B2C sales within the EU exceed €10,000 in a calendar year, it must charge the local VAT rate of each customer's country. The OSS scheme allows it to register in only one country and file a single VAT return for all EU sales.

MOSS

The Mini One Stop Shop (MOSS) was the system OSS replaced. It only covered telecommunications, broadcasting, and electronically supplied services, and operated on a narrower scale before the EU folded it into the broader OSS framework in 2021.

When does a seller need an IOSS intermediary?

Whether a business can register for IOSS on its own or needs an intermediary depends almost entirely on where it's based. Businesses established in the EU, or in a non-EU country with a mutual assistance agreement on VAT recovery, can register for IOSS directly. Businesses should confirm their current status before assuming eligibility.

Every other non-EU business has to appoint an intermediary, an entity established in the EU that registers for IOSS on its behalf and accepts primary liability for the VAT owed under the scheme. If the registered business fails to remit VAT correctly, the intermediary can be held responsible for the shortfall, which is why intermediaries vet the businesses they take as clients and often price based on transaction volume.

An intermediary typically handles registration, submits the VAT returns, and serves as the point of contact if a member state's tax authority has questions.

Businesses evaluating intermediaries should consider the following:

• Fee structure relative to your sales volume: Some intermediaries charge flat monthly fees, others scale with transaction count or VAT collected. The right fit depends on whether your EU sales are steady or seasonal.

• Which member state the intermediary is registered in: This becomes your business's registration country for IOSS purposes. It's worth asking about their experience handling correspondence with that country's tax authority.

• Track record with businesses your size: An intermediary built for enterprise sellers moving millions in EU volume might not give a smaller business the attention it needs.

What are the limits of using IOSS?

IOSS solves a specific problem, but it doesn't cover everything.

Here are the main constraints to plan around:

The €150 cap is a hard line

A shipment that comes in even a few euros over falls outside the scheme entirely and goes through standard customs procedures, including potential duties on top of VAT. Businesses selling a mix of low and higher-value items need separate processes for each, since IOSS won't apply uniformly across a catalogue.

Liability doesn't end at registration

Businesses, and their intermediaries where applicable, stay responsible for charging the correct VAT rate for each destination country, even as rates change. A business that doesn't update its checkout logic when a member state adjusts its rate risks undercollecting and owing the difference out of pocket.

Marketplace sales complicate reporting

IOSS registration doesn't automatically cover sales made through a marketplace. Some online marketplaces are deemed the "supplier" for VAT purposes under EU rules. This means they handle IOSS reporting themselves for transactions made through their platform. To avoid double reporting or gaps, a business selling through both its own site and a marketplace needs to be aware of the sales it's responsible for declaring and those the marketplace covers.

How can businesses decide whether IOSS makes sense for their e-commerce model?

Assess your order value, shipping volume, and how much of your EU business comes from low-value goods to determine whether IOSS is right for your company. A few checks can tell you where you land.

Monitor your order value mix

If a substantial share of your shipments to EU customers fall under €150, IOSS registration generally pays off in fewer customs delays and abandoned or refused packages. If the bulk of your EU-bound orders exceed that threshold, the scheme won't apply to much of your volume anyway.

Revisit the maths as your business grows

A seasonal spike that pushes more orders under the €150 line, or a new product category that shifts average order value, can change whether IOSS registration is worth it. Keeping an eye on that shift is a reasonable habit to build into how you assess EU expansion.

See what tax solutions can handle

Businesses already running EU sales through Stripe can use Stripe Tax to manage the rate calculation side of IOSS compliance. Stripe Tax determines the correct VAT rate based on the buyer's location and product type, applies it at checkout, and tracks the transaction level detail needed to prepare a monthly IOSS return, whether that return gets filed directly or through an intermediary. It doesn't replace registration and filing, but it reduces the rate errors that tend to occur when a business is managing checkout across more than two dozen VAT jurisdictions.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Stripe Tax helps you monitor your obligations and alerts you when you exceed a sales tax registration threshold based on your Stripe transactions. In addition, it automatically calculates and collects sales tax, VAT and GST on both physical and digital goods and services – in all US states and in more than 100 countries.

Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard or using our powerful API.

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration or add tax collection with the click of a button in the Stripe Dashboard.

• Register to pay tax: Let Stripe manage your global tax registrations and benefit from a simplified process that prefills application details – saving you time and simplifying compliance with local regulations.

• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.

• Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.

Learn more about Stripe Tax or get started today.