Since July 2021, two EU schemes let online sellers handle VAT for cross-border B2C sales through a single return instead of registering in every member state. They are easy to confuse — here is the practical split.
The 30-second answer
- OSS (One Stop Shop) — for goods already inside the EU shipped to consumers in another EU country, and for B2C digital services.
- IOSS (Import One Stop Shop) — for goods imported from outside the EU in consignments of €150 or less, sold directly to EU consumers.
OSS in detail
OSS replaced the per-country distance-selling thresholds with a single EU-wide €10,000 threshold. Sell more than €10,000 of B2C goods/services across all EU countries in a year and you must either:
- Charge the buyer's local VAT rate and remit through OSS, or
- Register for VAT in every destination country (much more paperwork).
You register for OSS in one EU member state, file a single quarterly OSS return there, and pay one lump sum that the tax authority distributes to other member states. The €10,000 threshold does not apply to digital services to consumers — OSS rules apply from the first euro.
IOSS in detail
IOSS exists because the EU removed the old €22 import VAT exemption. Every commercial parcel arriving from outside the EU now attracts VAT. With IOSS:
- You charge VAT at checkout based on the buyer's country.
- You get a unique IOSS number; the courier passes it to customs.
- Parcels clear customs without the buyer being asked for VAT or handling fees on the doorstep.
- You file one monthly IOSS return.
IOSS only covers parcels with intrinsic value up to €150 and only goods (not services or excise goods like alcohol and tobacco).
Marketplaces
If you sell through Amazon, eBay, Etsy or similar, the marketplace is often the "deemed supplier" for IOSS and sometimes for OSS too — they collect VAT and file under their own number. Check each marketplace's seller documentation; you can still need OSS for direct-from-website sales.
Which do you need?
| Scenario | Scheme |
|---|---|
| UK seller, warehouse in Germany, ships to French consumers | OSS |
| US seller, ships from New York to Spanish consumer, parcel under €150 | IOSS |
| EU SaaS company, sells subscriptions to consumers across the EU | OSS (no threshold) |
| UK seller, ships £200 parcel from UK to Italian consumer | Neither — buyer pays import VAT on delivery, or register locally |
Common pitfalls
- Forgetting that B2B sales (with a valid VIES VAT number) use the reverse charge instead — they don't go through OSS.
- Mixing IOSS and non-IOSS parcels without separating shipping data — customs holds the lot.
- Charging the seller's local VAT rate after crossing the €10,000 threshold instead of the buyer's rate.
See VAT rates by country for the rates you'll need to charge across the EU.