Understanding OSS vs. IOSS: Which One Do You Need?

To effectively sell to consumers in the European Union (EU), you no longer need a separate VAT registration for every country where you have a customer. Instead, the EU has introduced two "One-Stop Shop" schemes designed to centralize your tax reporting into a single filing.

Choosing between the One-Stop Shop (OSS) and the Import One-Stop Shop (IOSS) depends entirely on where your goods are located at the moment your customer clicks "buy."

The One-Stop Shop (OSS)

The OSS is designed for businesses selling goods or services that are already located within the EU at the time of sale.

• When to use it: You are an EU-based business shipping to other EU countries, or you are a non-EU business using an EU-based warehouse (like Amazon FBA in Germany) to fulfill orders to European customers.

• The €10,000 Threshold: EU-based businesses only need to use OSS once their total cross-border B2C sales exceed €10,000. For non-EU businesses, there is no threshold; you must collect VAT from the first sale.

• Benefits: You file one quarterly VAT return in your "Member State of Identification" that covers your sales to all 27 EU countries.

The Import One-Stop Shop (IOSS)

The IOSS is designed for businesses selling goods that are located outside the EU (e.g., in the US, UK, or China) and are being shipped directly to an EU consumer.

• When to use it: You are shipping individual parcels from a non-EU country directly to a customer in the EU.

• The €150 Rule: IOSS is currently used for "low-value" consignments where the total value of the goods in the parcel does not exceed €150.

• 2026 Customs Update: As of July 1, 2026, the EU has abolished the customs duty exemption for these low-value goods. While IOSS remains the best way to handle the VAT at checkout, parcels under €150 are now subject to a flat €3 customs duty per item category.

• Benefits: By using IOSS, you collect VAT at the point of sale. This allows the parcel to go through a "green lane" at customs, avoiding surprise "handling fees" and tax bills for your customer upon delivery.

Which One Do You Need?

It is common for growing businesses to need both registrations simultaneously.

• Scenario A: You ship from your US headquarters to EU customers. You need IOSS.

• Scenario B: You ship some items from your US HQ, but you keep your best-sellers in a warehouse in the Netherlands. You need both IOSS and OSS.

• Scenario C: You are a French company selling only to customers in Germany and Italy. You only need OSS.

Comparison Summary: OSS vs. IOSS

Need help?

If you need help with your EU VAT registration, just contact our support team for assistance with setup, filing, or managing your registration details.