IOSS and EU VAT on imports

IOSS doesn't apply to goods subject to excise, such as alcohol or tobacco, or to consignments above EUR 150. Above that limit, standard VAT and customs rules apply. The EUR 150 is the intrinsic value of the whole consignment, excluding transport and insurance if they're shown separately.

Rates by country are here:

A seller established in the EU can register directly in its own member state. A seller without an EU establishment needs an intermediary established in the EU, unless it's in a country with an EU mutual assistance agreement that covers this, Norway being one. Member states can set further conditions on intermediaries, such as a guarantee.

You file a monthly return, due by the end of the following month, and keep records for 10 years. A marketplace that facilitates the sale is treated as the supplier for VAT purposes on these goods, so if you sell only through one, it usually handles this. Check who's accounting for what in your platform terms.

Treat your IOSS number as sensitive. The carrier needs it for the import declaration, and customs reads it as a sign that the VAT is already dealt with, so give it only to the parties handling your goods.

This is our own illustration. A UK shop sells a consumer in the EU four identical linen aprons for EUR 100, plus EUR 10 delivery, through IOSS. The aprons share one code and description, so they make one item. It charges the customer the EUR 2 handling fee at checkout, and absorbs the duty itself. We've assumed a 21% VAT rate. Use the buyer's actual rate.

Out of that, the seller pays EUR 23.52 of VAT on its IOSS return, plus EUR 3 duty and the EUR 2 handling fee, which go through the customs declaration. Take those three from the EUR 135.52 and it keeps EUR 107.00 before the cost of the goods.

The two charges have different legal bases. The EUR 3 duty comes from Council Regulation (EU) 2026/382 and runs from 1 July 2026 until 1 July 2028. The EUR 2 handling fee comes from Article 20(2) of the new Union Customs Code, Regulation (EU) 2026/2108, with the amount set by Delegated Regulation (EU) 2026/2152, which applies from 1 November 2026. The fee has no end date and applies to distance sales at any value, so also above EUR 150. The Commission's guidance says that a handling fee charged to the consumer at sale forms part of the taxable amount in the IOSS return. And the party liable for the duty and fee is the declarant, and a person it represents indirectly is liable too, so settle this with your carrier before you go live. For more on the charges, see de minimis thresholds.

• Preferential goods. A preferential rate isn't available if IOSS is used to collect the VAT. The goods take the EUR 3 duty. To claim a preference on goods that qualify under a trade agreement, you need another VAT route and a full H1 declaration, and the handling fee still applies.
• Consignment value. If one customer's order is split, each parcel has its own value. If the order is over EUR 150 in one consignment, it's out of IOSS altogether. If you can't tell at checkout, set your system to handle both.
• Returns. Refund the customer and correct the VAT through the return. The handling fee is non-refundable once the declaration is accepted. The EUR 3 duty can no longer be recovered by invalidating the declaration after release, so only the general repayment rules are left. The guidance covers both.
• Product identifiers. From 1 November 2026, declarations for distance sales in consignments of up to EUR 150 need a product identifier for each item, with enforcement from that date. Your carrier will want them from you.

The customs reform under Regulation (EU) 2026/2108 moves more of the customs responsibility to platforms and sellers, with the Data Hub due to be mandatory for e-commerce from 1 July 2028. The VAT in the Digital Age package has changes starting on 1 January 2027 and 1 July 2028. The July 2026 OSS guide is revised for the first of these, and says a completely new version will follow. Reread it before those dates.

This page is guidance, not tax advice. Your numbers depend on the buyer's country, the seller's set-up and the platform, and the import duty calculator can run them for a specific route.