EU VAT vs IOSS — What Non-EU Sellers Need to Know in 2025

If you're a non-EU e-commerce seller shipping goods to European customers, understanding EU VAT and IOSS (Import One-Stop Shop) is critical to avoid customs delays, surprise tax bills, and compliance penalties.

What is EU VAT?

Value Added Tax (VAT) is a consumption tax applied to goods and services sold in the EU. Rates vary by country (typically 17–27%), and sellers must collect and remit VAT if they exceed certain thresholds.

Key VAT Thresholds for Non-EU Sellers

• €10,000/year: Distance selling threshold across all EU member states combined
• Above €10,000: You must register for VAT in at least one EU member state
• UK VAT: Separate rules apply post-Brexit (£85,000 threshold)

What is IOSS?

The Import One-Stop Shop (IOSS) is a simplified VAT collection system for:

• Goods with an intrinsic value ≤ €150
• Shipped from outside the EU to EU consumers
• Allows you to collect and remit VAT at the point of sale instead of at customs

Benefits of IOSS Registration

✅ Faster customs clearance (no import VAT delays) ✅ Better customer experience (no surprise fees at delivery) ✅ Centralized VAT reporting through a single EU portal ✅ Competitive advantage over non-compliant sellers

IOSS vs Standard VAT: Which Do You Need?

Common Mistakes to Avoid

1. Mixing Up IOSS and OSS

• IOSS = For imports from outside EU (goods ≤ €150)
• OSS = For distance sales within EU (goods already in EU)

2. Forgetting UK VAT

Post-Brexit, the UK has its own VAT system. You need separate UK VAT registration if you exceed the £85,000 threshold.

3. Not Declaring IOSS Number to Carrier

If you register for IOSS but forget to provide your IOSS number to your shipping carrier, goods will still be held at customs and import VAT will be charged.

How to Register for IOSS

1. Choose an intermediary (if you have no EU establishment)
2. Register via an EU member state portal (e.g., Ireland, Netherlands)
3. Obtain your IOSS number (starts with "IM")
4. Add IOSS number to your checkout and shipping labels
5. File monthly IOSS returns (even if zero sales)

Need Help?

Use our EU VAT & IOSS Checker to instantly determine your obligations based on your revenue, shipping destinations, and product types.

Next steps:

• Compare schemes in EU VAT explained
• Run the Readiness Wizard to log origins, storage, and consignment values
• Deploy the GDPR & UK GDPR Generator if you collect EU/UK traffic

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Last updated: October 2025 Source: European Commission VAT regulations, UK HMRC guidance