OSS and IOSS: selling across EU borders with one VAT return
When a business sells goods or digital services to consumers in other EU countries and those sales exceed EUR 10,000 a year in total, VAT is due in each customer's country at that country's rate. The One Stop Shop (OSS) lets you declare all of it in one quarterly return at home. IOSS does the same for low-value goods imported from outside the EU.
The destination principle
Inside the EU, VAT on sales to private customers is due in the customer's country once you pass the EU-wide threshold. Rates differ widely, so the same product carries different VAT depending on where the parcel goes:
📊Standard VAT rates in selected EU countries
| Country | Standard rate |
|---|---|
| Germany | 19 % |
| Poland | 23 % |
| Italy | 22 % |
| Ireland | 23 % |
| Malta | 18 % |
| Hungary | 27 % (highest in the EU) |
| Luxembourg | 17 % (lowest in the EU) |
Rates as listed on Your Europe, checked by the Commission in July 2026. Each country also has its own reduced rates for food, books or accommodation. A VAT calculator helps with single figures.
The EUR 10,000 threshold is a single, union-wide figure for intra-EU distance sales of goods plus telecoms, broadcasting and electronic services to consumers, as explained on the European Commission's OSS portal. It replaced the national thresholds on 1 July 2021. Most e-commerce businesses with real cross-border volume cross it.
What OSS does
OSS is a simplification, not a new tax. You register in your home member state and then:
- charge the destination country's rate on each cross-border consumer sale,
- file one return per quarter with sales per country and rate, due by the end of the following month,
- pay the total to your home tax authority, which passes it on to the other countries.
Without OSS you would need a VAT registration and returns in every destination country. OSS removes that, but not the duty to know the right rate, nor the need for records showing where each customer was. There is a Union scheme for EU businesses, a non-Union scheme for non-EU businesses selling services to EU consumers, and the import scheme described below. See the OSS glossary entry.
Practical example
An online cosmetics shop in Warsaw sold EUR 14,000 to consumers in Germany and Italy last year, above the threshold. A cream sold for EUR 50 net to a customer in Munich now carries 19 % German VAT (EUR 9.50); the same cream to a customer in Milan carries 22 % Italian VAT (EUR 11.00). Both sales go into one Polish OSS return per quarter, paid to the Polish tax authority.
What OSS covers, and what it does not
OSS applies to:
- Distance sales of goods shipped from one member state to a consumer in another.
- Services to consumers taxed where the customer is, such as digital services and telecoms.
OSS does not apply to:
- B2B sales to VAT-registered customers in other countries. Those use the reverse charge and the EC sales list.
- Goods that stay in one country. Stock in a warehouse in Germany sold to a German consumer is a domestic German sale and needs a German VAT registration.
- Input VAT. OSS covers output VAT only. VAT paid in another country is reclaimed through the separate refund procedure.
The warehouse point catches many marketplace sellers: fulfilment centres in several countries create domestic sales in each.
What IOSS does
The Import One Stop Shop covers goods shipped from outside the EU directly to EU consumers in consignments up to EUR 150. The seller charges the destination VAT at checkout, declares it in a monthly IOSS return, and the parcel clears customs without the carrier collecting VAT from the customer. Without IOSS, the carrier usually collects import VAT plus a handling fee before delivery, which hurts the customer experience and increases returns.
Non-EU sellers usually need an EU intermediary to register. Marketplaces are the deemed supplier for many of these sales and use their own IOSS number, so a seller on a marketplace may not need one.
New since 1 July 2026: EUR 3 customs duty on small parcels
The EU has introduced a temporary EUR 3 customs duty on low-value parcels from outside the EU, for goods worth up to EUR 150. It applies per item category by tariff classification, not per parcel, as the European Commission explains. This is customs duty and comes on top of VAT; IOSS still handles the VAT side.
Record-keeping: the part that gets audited
Both schemes require evidence of where the customer is. For goods, the delivery address usually decides. For services, two non-contradictory pieces of evidence are needed, such as billing address, IP location, bank country or phone prefix, with a lighter rule for small volumes. OSS and IOSS records must be kept for 10 years and made available electronically to any member state that asks.
📋Getting OSS right
- Track the threshold – add up cross-border consumer sales across all EU countries, not per country.
- Store the customer country on every sales document, with evidence.
- Keep the rate table current – rates and reduced categories change.
- Separate B2B from B2C – validate the buyer's VAT number at the time of sale with a VAT ID check.
- Convert currencies correctly – OSS returns are generally in euro, converted at the ECB rate of the last day of the return period; member states outside the euro area may require their national currency.
- Watch warehouse locations – stock abroad means local VAT registration.
Where ViDA takes this
Under ViDA, minor OSS and IOSS clarifications apply from 1 January 2027, and from 1 July 2028 the scheme is extended to more situations, together with deemed supplier rules for platforms in short-term accommodation and passenger road transport. The direction is one registration and one place to report.
How Kontevia fits
Kontevia is in early access. Its country rules hold the standard and reduced rates for all 27 member states, sales documents carry the customer's country, and per-country VAT summaries are prepared as the basis for an OSS return. EU VAT numbers are checked in VIES so B2B and B2C sales are separated correctly. Filing remains with you or your accountant. See VAT in Kontevia.
Official sources
- European Commission: VAT One Stop Shop portal
- Your Europe: VAT rules and rates
- European Commission: EUR 3 customs duty on low-value parcels
- European Commission: VAT in the Digital Age
This article is general information and does not replace advice from a tax adviser. Information valid as of 11 October 2026.
Frequently asked questions
- Do I have to charge my customer's VAT rate when selling online to EU consumers?
- Once your total cross-border sales of goods and digital services to consumers in other EU countries exceed EUR 10,000 a year, yes. Below that you may keep applying your home country's VAT. OSS lets you declare the destination VAT in one return.
- Does OSS cover sales to businesses in other EU countries?
- No. OSS is for supplies to consumers. B2B sales to VAT-registered customers in other EU countries use the reverse charge and are reported in the EC sales list.
- What is the difference between OSS and IOSS?
- OSS covers goods and services supplied within the EU to consumers in other member states. IOSS covers goods imported from outside the EU in consignments up to EUR 150 sold to EU consumers, with VAT charged at checkout.
- How often is an OSS return filed?
- The Union OSS return is quarterly and due by the end of the month after the quarter. The IOSS return is monthly and due by the end of the following month.
Topics:OSSIOSSVATe-commercecross-borderdistance selling
Kontevia is in early access. Country-specific behaviour described here reflects the rules of each state, not a promise that every feature is live in your country today.
Bookkeeping that keeps up with EU rules
Send a receipt by chat or e-mail, and Kontevia reads it, posts it under the rules of your country and prepares VAT and the export for your accountant. Early access is open.
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