The two One-Stop-Shop schemes that let small businesses file a single quarterly VAT return rather than registering in every EU country they sell to.

The short version

OSS (One-Stop Shop) covers B2C supplies of services and intra-EU distance sales of goods. IOSS (Import OSS) covers B2C imports of low-value goods (under EUR 150) from outside the EU. Both let a business identify in one EU member state, file a single quarterly return, and pay all destination-country VAT through that single channel.

Why they exist

From 1 July 2021 the EU's "VAT e-commerce package" replaced 27 different distance-selling thresholds with one EU-wide threshold (EUR 10,000) and the OSS/IOSS regime. Before that, an SME selling cross-border had to monitor 27 separate thresholds and register for VAT in each country they crossed. OSS made the admin tractable; IOSS closed the low-value import loophole.

OSS: who and how

• If your total cross-border B2C distance sales of goods + electronically supplied services across the EU exceed EUR 10,000 per calendar year, you charge destination-country VAT and use OSS to remit it.
• Below the threshold, you charge your origin-country VAT and treat the sales as domestic.
• OSS is optional - you can choose to register in each customer country individually, but almost nobody does.
• OSS returns are quarterly. You list per-country sales totals and VAT due; your home tax authority remits the relevant share to each member state.

IOSS: who and how

• For B2C imports of goods up to EUR 150 from a non-EU country.
• The seller collects destination-country VAT at point of sale and remits via the IOSS scheme. The package then clears EU customs without a VAT charge at import.
• Without IOSS, the package's VAT is collected by the courier on delivery, plus a handling fee that often dwarfs the goods value.
• IOSS is voluntary but extremely popular with major e-commerce platforms because it dramatically improves the customer experience.

Practical effect

For a small business in Lisbon selling EUR 30,000 of e-books per year to consumers across the EU, the choice is: register in 26 other countries (impractical), stay below EUR 10,000 (capping growth), or sign up for OSS in Portugal once and file four quarterly returns covering everywhere. Obvious answer.

Limitations

• OSS covers B2C only. B2B intra-EU sales use the reverse-charge mechanism instead - see the reverse-charge guide.
• Some goods (excise goods, new means of transport) are excluded.
• Post-Brexit, UK-EU B2C sales don't use OSS at all. The UK has its own equivalent system; the EU regards UK as a third country.

Sources

• European Commission OSS portal
• European Commission IOSS portal
• EU VAT Directive 2006/112/EC, Title XII Chapter 6 (consolidated 1 July 2021 amendments).

The 2021 e-commerce reform, what changed and why

The 1 July 2021 EU e-commerce VAT reform was the most significant restructuring of cross-border B2C VAT in two decades. It consolidated three previously separate schemes (MOSS for digital services, the distance-selling thresholds for B2C goods, the LVCR for low-value imports) into a unified One-Stop Shop framework with three branches: Union OSS for EU-established suppliers selling B2C digital services or distance-selling goods across the EU; Non-Union OSS for non-EU established suppliers selling B2C digital services to EU consumers; Import OSS (IOSS) for B2C imports of low-value consignments (≤€150 intrinsic value). The €10,000 unified threshold below which suppliers may charge home-country VAT replaced the patchwork of country-specific distance-selling thresholds (which ranged from €35,000 in some member states to €100,000 in others) and the zero-threshold MOSS regime that had created disproportionate compliance burden on small digital-services suppliers. The reform also eliminated the LVCR (Low-Value Consignment Relief), which had exempted goods under €22 from import VAT, a relief that had been heavily abused by suppliers under-declaring consignment values.

OSS Union vs Non-Union, eligibility detail

The Union OSS is open to taxable persons established in the EU (and to non-EU established taxable persons making B2C intra-Community distance sales of goods). The Non-Union OSS is open to taxable persons NOT established in the EU and supplying B2C digital services to EU consumers. The two streams are mutually exclusive, a single taxable person uses either Union or Non-Union depending on their EU establishment status. The Member State of Identification (MSI) - where the supplier registers, can be any EU member state for Non-Union OSS. For Union OSS, MSI is the supplier's EU establishment country if they have only one; if they have multiple EU establishments, MSI can be any of them. Once registered, the MSI handles the OSS return processing, payment collection, and distribution to the consumer member states. Quarterly returns are filed via the MSI's online portal in the MSI's language and currency, but they cover supplies to all 27 member states.

IOSS, the €150 import threshold mechanism

The Import OSS handles a different problem: imports of goods to EU consumers from non-EU suppliers. Under IOSS, the supplier (or designated intermediary) collects VAT at the point of sale at the destination-country rate, declares it via a monthly IOSS return, and the goods enter the EU with import VAT pre-collected (no customs-border collection delay for the consumer). The €150 intrinsic-value threshold is the cap, IOSS doesn't cover larger consignments, which must follow standard EU import-VAT rules (border collection at import). IOSS requires either direct registration in an EU MSI (with sometimes a fiscal-representative requirement for non-EU established suppliers) or registration through an EU-established intermediary. Major marketplaces (Amazon, eBay, Etsy) operate their own IOSS facilities for marketplace-facilitated supplies, which shifts the IOSS compliance obligation to the marketplace rather than each individual seller, substantially reducing seller-side compliance overhead for the marketplaces' supplier base.

Practical OSS compliance, return cadence and data demands

Union and Non-Union OSS returns are due quarterly: Q1 by 30 April, Q2 by 31 July, Q3 by 31 October, Q4 by 31 January. Payment is due at the same time. The IOSS is more frequent, monthly returns due by the end of the following month. Each return must break down total supplies by Member State of Consumption (the 27 destinations), by VAT rate applicable in that state, and by net value supplied. The MSI cross-validates the OSS return against VIES queries and any related intra-EU statistical filings; mismatches trigger HMRC-style queries from the MSI tax authority. Late returns incur €100 per consumer member state penalties at common implementations (specifics vary by MSI). Multiple consecutive late returns can lead to the OSS registration being withdrawn, at which point the supplier reverts to direct VAT registrations in each consumer member state, an unmanageable compliance burden for most small/mid suppliers.

Frequently asked questions

What's the minimum standard VAT rate in the EU?

Article 97 of the EU VAT Directive sets a 15% minimum standard rate. Live national standard rates sit above that floor; see the extremes note below.

Where can I check a VAT number's validity?

Use the European Commission's VIES portal at ec.europa.eu/taxation_customs/vies for EU numbers, and HMRC's UK VAT checker at gov.uk/check-uk-vat-number for UK numbers.

Which countries have the highest and lowest VAT rates in the EU?

Article 97 of the EU VAT Directive sets a 15% minimum standard rate. In PlainVAT's serving EU 27 dataset, Hungary has the highest standard rate at 27.0% and Luxembourg the lowest at 17.0% (median 21.0%). This guide does not compare countries outside that source-backed scope.