Blog, News & Best Practices
Blog, News & Best Practices
One stop shop (OSS) and Import one stop shop (IOSS)
One stop shop (OSS) and Import one stop shop (IOSS)
Selling into the EU presents significant opportunities, but VAT regulations can be complex. With the EU e-commerce market valued at €899 billion, businesses can now obligations using the One-Stop Shop and Import One-Stop Shop schemes. Understanding these systems ensures compliance and a smoother expansion into the European market.
IOSS or OSS ?
Within the EU, the One-Stop-Shop system simplifies VAT management for intra-EU cross-border sales, eliminating the need for multiple VAT registrations across member states. Depending on their business model, companies can register for OSS, IOSS, or both.
When Were OSS and IOSS Introduced?
These VAT reforms took effect on July 1, 2021, significantly reshaping e-commerce taxation. The EU also scrapped previous distance selling thresholds, replacing them with a unified €10,000 threshold for EU-based businesses before requiring OSS registration. However, this threshold does not apply to companies outside the EU.
Additionally, the Low-Value Consignment Relief (LVCR), under €22 from VAT, was eliminated. Now, all imports into the EU are subject to VAT unless they fall under the IOSS scheme. For goods valued up to €150, IOSS simplifies VAT reporting and facilitates a smoother import process.
While these changes were designed to create a more efficient VAT system for cross-border e-commerce, navigating the new rules can still be complex. Understanding whether OSS or IOSS applies to your business is key to ensuring compliance.
What is IOSS?
The Import One-Stop-Shop (IOSS) is an EU VAT compliance system designed to simplify tax collection for businesses selling goods valued at €150 or less directly to EU customers from outside the EU. Introduced in July 2021, IOSS streamlines VAT payment and reduces the burden of import taxes for non-EU sellers.
Key Features :
- Applies to most goods up to €150, except for excise products like alcohol and tobacco.
- VAT is collected at the point of sale, using the buyer’s local VAT rate.
- Businesses register for IOSS in one EU member state, allowing them to declare and remit VAT for all EU sales through a single return.
- Goods imported under IOSS arrive VAT-paid, meaning customers avoid unexpected customs fees, leading to faster delivery and a smoother purchasing experience.
Who Should Register for IOSS?
IOSS is specifically for non-EU businesses selling goods to non-VAT registered customers in the EU. This includes companies based in the UK (excluding Northern Ireland, which follows different rules).
For goods exceeding €150, standard import VAT and customs rules apply, and IOSS cannot be used.
How to Register?
Non-EU businesses typically need to appoint an EU-based intermediary to handle VAT registration and compliance.
Once registered, businesses receive a unique IOSS identification number, which must be included on all shipments under €150.
VAT must be charged at checkout and documented on the customs invoice.
For accurate guidance, businesses can consult a tax professional, FISCALEAD.
What is the One-Stop Shop ?
The One-Stop Shop (OSS) simplifies VAT compliance for businesses selling goods and services across the EU. Initially introduced as the Mini One-Stop Shop (MOSS) in 2015 for digital services, OSS expanded in July 2021 to cover e-commerce and cross-border goods sales.
Instead of registering for VAT in multiple EU countries, businesses can register in just one EU member state and file a single quarterly return covering all eligible sales.
Who Needs?
- EU businesses selling goods or services to consumers in other EU countries.
- Non-EU businesses selling B2C digital services within the EU.
- If your cross-border sales remain under €10,000 annually, you can continue applying your home country’s VAT rules. Once you exceed this threshold, OSS registration is recommended.
How Does OSS Work?
- Register for OSS → Businesses register in their home country or, for non-EU sellers, in a chosen member state.
- Apply the VAT rate of the buyer’s country → VAT must be charged at the rate applicable in the customer’s country.
- File a single quarterly return → Businesses submit their VAT return through the OSS online portal in their country of registration.
- Pay VAT in one country → The tax authority in the OSS-registered country distributes VAT to the relevant EU states.
Consulting a tax professional is always advisable.
Comparison table
| Feature | OSS | IOSS |
| Who Can Use It? | EU-based businesses selling goods/services to consumers in other EU countries.
Non-EU businesses selling digital services. |
Non-EU businesses selling physical goods to EU consumers.
EU businesses selling imported goods from outside the EU. |
| Applicable to | B2C sales of goods and services within the EU. | B2C sales of imported goods valued up to €150. |
| Registration | EU businesses register in their home country. Non-EU businesses register in any chosen EU member state. | Non-EU businesses must register in one EU country (usually via an intermediary). |
| Collection | VAT is charged at the rate of the buyer’s country at the point of sale. | VAT is collected at the point of sale. |
| Reporting | A quarterly VAT. | A monthly VAT return is required. |
| Customs Clearance | Not applicable, as OSS deals with intra-EU sales. | Goods are cleared faster because they arrive VAT-paid. |
| Threshold | Businesses below €10,000/year in intra-EU sales can follow their home country’s VAT rules instead. | / |
| Limitations | Does not apply to imported goods from outside the EU. | Can only be used for goods valued at €150 or less. Higher-value goods follow standard VAT and customs rules. |
Fiscalead your VAT partner
Fiscalead acts as your tax representative and we are the guarantor of your VAT compliance in France. Trust us to ensure the proper fulfillment of your reporting obligations in terms of VAT and declarations.