How do OSS and IOSS change your business?

Since 1 July 2021, businesses and online marketplaces making cross-border B2C sales of goods within the EU can use the One Stop Shop (OSS) to declare and pay the VAT due in every member state through a single registration, instead of registering for VAT in each EU member state where they have customers. OSS is optional and only covers the B2C sales within its scope, so a business may still need local VAT registrations for other activities, such as storing stock in a member state or importing goods. The marketplaces can then focus on expanding into new markets without worrying about registering for every local tax regime that applies to its activities across EU borders.

How OSS and IOSS Change the EU VAT Rules

The main changes that OSS and IOSS bring to the EU VAT rules are as follows:

Online marketplaces as deemed suppliers

Where an online marketplace facilitates B2C sales of goods by non-EU sellers whose goods are already in the EU, or distance sales of imported goods in consignments worth up to €150, the marketplace is treated as the supplier (the "deemed supplier") and must charge and pay the VAT instead of the seller. Marketplaces must also keep records of the sales they facilitate and make them available to tax authorities on request. A marketplace acting as deemed supplier can report this VAT through OSS or IOSS rather than registering in every member state. In return, online marketplaces will benefit from simpler procedures for allocating B2C VAT liability and can reduce costs. They will no longer need to register for VAT in every member state where they have customers – this is the simplification the "One Stop Shop" offers.

OSS Registration

The One Stop Shop (OSS) allows businesses to register in only one EU member state and report the VAT on their B2C distance sales of goods and cross-border services to customers in other member states in a single quarterly OSS return. The member state will act as the lead authority for all VAT returns and payments. VAT is still charged at the rate of the customer's member state, and the member state of identification passes the VAT on to the other countries.

Registration conditions: an EU-established business only has to charge VAT at the customer's rate once its cross-border B2C sales of goods and certain digital services exceed €10,000 a year EU-wide, while non-EU businesses cannot use this threshold and owe VAT in the customer's country from the first sale.

The Import One Stop Shop (IOSS) is a separate, optional scheme for sellers and marketplaces selling imported goods in consignments worth no more than €150 to EU consumers: VAT is charged at checkout and declared in one monthly IOSS return, and non-EU sellers generally need to appoint an EU intermediary. Its benefits include:

-More flexible rules for VAT allocation.

-Simplified procedures for VAT return and payment.

-Do the business in all 27 EU member states with just one VAT registration

-- Enhance the customer experiences by providing transparent costs price .

IOSS removes import VAT at the border, but not customs duty: since 1 July 2026 the EU charges a flat €3 customs duty on each different tariff category of item in low-value parcels, so this cost should also be built into your checkout prices.

Online marketplaces are no longer required to be registered in every EU member state where they have customers. It reduces administrative burdens for online marketplaces by allowing them to report the VAT due across the EU through a single registration, instead of registering in each individual member state where they have customers.

These changes will make it easier for small businesses to do business across borders without having to deal with 27 different VAT obligations！

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