The email that kills the sale
A French customer orders €23 of phone cases from your Shopify store. The parcel clears import, and then the courier emails the buyer: €20.08 of VAT plus €15 clearance handling, payable before delivery. Buyers respond to that email in three ways: pay it grudgingly, tell you to deal with it, or refuse — and a parcel refused at the doorstep comes back to Shenzhen on your freight bill. Somewhere between a fifth and a third of parcels into the EU die this way for sellers who never registered for the one number that stops the email: the Import One-Stop-Shop, IOSS.
IOSS is a VAT collection number for goods sold online to EU consumers from outside the EU, and it has been live since July 2021. It does exactly one thing — let the seller charge and remit the destination country's VAT at the checkout instead of the courier collecting it at the door — but that one thing changes the entire buying experience, and with it your refusal rate.
What IOSS actually is: one number, 27 countries
Register for IOSS once and you get a single number valid across all EU member states. When you sell to a buyer in France, you charge French VAT (20%); to a buyer in Italy, Italian VAT (22%); the checkout rate follows the buyer's country, not yours. You declare the collected VAT to the member state where you registered — one monthly return, even though the money belongs to 27 different treasuries — and that state redistributes it. The number then travels on the parcel: the customs declaration carries it, the courier sees it, and the goods are released without any further VAT collection or clearance handling fee.
There is no duty in the picture for the typical IOSS parcel. Goods with an intrinsic value up to €150 are exempt from import duty in the EU — the exemption that IOSS is bolted onto — so the VAT is the entire customs bill, and it was already paid at checkout. That is why the buyer's doorstep experience is clean: no email, no fee, no refusal. The VAT calculator shows the rates you would actually charge per country; IOSS is the plumbing that gets them collected upfront.
The €150 number, read correctly
The threshold is worth reading precisely, because it is the one people get wrong in the most expensive direction. IOSS applies to consignments whose intrinsic value — the value of the goods themselves, excluding freight and insurance — is €150 or less. Your €140 product with €25 shipping still qualifies, because the shipping is not part of the intrinsic value.
That makes the EU number structurally different from the UK's £135, and the difference matters if you sell to both. The UK threshold is a consignment value: the goods plus the freight, measured at the border. £125 of goods with £15 shipping is a £140 consignment and sits above the UK line — the dropshipping guide covers what that does to your VAT obligation. The EU's €150 is a goods-value line, freight excluded. Same idea of a small-parcel tax holiday, different arithmetic, and if you learned one market's rule and applied it to the other, the mistake shows up as a surprise bill for the buyer at the worst moment.
Who registers, and the intermediary rule
Any business selling to EU consumers qualifies, but non-EU sellers cannot register directly with a member state — the rule requires an intermediary: an EU-established company, usually a VAT agency or e-commerce compliance service, that holds the IOSS number on your behalf and handles the filings. The intermediary model is not optional, and it is not free: monthly fees in the €30–100 range are typical, plus the VAT itself. One IOSS number belongs to one seller. You cannot borrow a friend's number, and a marketplace seller generally does not register at all, because the platform is the one that handles VAT — more on that below.
The compliance that comes with the number is real but mechanical: monthly VAT returns, receipts kept, and the standard rule of declaring true values. The last one deserves emphasis because it is the pattern that gets IOSS registrations audited. Low-value declarations ride on the €150 exemption, so customs systems watch for implausible numbers from registered sellers with more attention than they watch random parcels — the declared value is no longer protecting a parcel, it is protecting a registration.
What changes at the doorstep, and what doesn't
The whole point is the buyer experience. Without IOSS, an EU parcel under €150 arrives and the courier bills VAT plus a handling fee, usually €10–30, before release. With IOSS, the parcel arrives paid for. Refusal rates, parcel returns, and the support burden that goes with both — "why am I being asked to pay again" — are the costs IOSS removes. If you sell enough volume into the EU for the refusal problem to be a line item in your spreadsheet, the intermediary fee pays for itself on the first couple of orders it saves.
What IOSS does not do is anything about the goods themselves. It is a VAT mechanism, not a customs classification. If your product is subject to an agency rule — an electronics certification, a textile rule of origin — IOSS is silent on it. The corridor pages cover the parts IOSS doesn't: France, Germany, and Italy each have their own enforcement quirks on top of the common VAT plumbing.
The reform hanging over it
In November 2025 the European Commission proposed replacing the €150 exemption and IOSS threshold with a €50 line, and shifting collection onto marketplaces and platforms rather than individual sellers. The proposal is not law — it needs member-state and Parliament approval, with a target of 2028 — and it has the same shape as the US debate over its $800 de minimis, which the Section 321 reform guide tracks. Two large markets are moving in the same direction at the same time, and the practical reading for a seller is not to restructure today but to build your compliance so a threshold change is an adjustment, not a rebuild: keep real declared values, keep records, and keep the buyer experience independent of which line the goods fall under.
Frequently Asked Questions
Does IOSS cover customs duty, or only VAT?
Only VAT — but goods under the €150 intrinsic-value line are exempt from import duty anyway, so in practice the IOSS parcel's customs bill is exactly zero. Above €150, neither the duty exemption nor IOSS applies; the consignment clears as a formal import with duty and VAT collected in the normal way. That is the cliff, and the de minimis checker maps where the equivalent cliffs sit in other markets.
I sell on Amazon and eBay. Do I need to register for IOSS?
Almost certainly not. When a marketplace handles the sale, the platform becomes the "deemed seller" and is responsible for VAT on those transactions; the seller's own IOSS registration covers only direct-channel sales. The distinction matters for pricing: marketplace VAT handling is now built into their fees, so your margin math on Amazon differs from your margin math on your own store — the DDP pricing calculator is built for exactly that comparison.
What's the difference between IOSS and OSS?
IOSS is for goods imported from outside the EU and sold to EU consumers — the one this page is about. OSS is for EU-established businesses selling across member states, and for distance sales of EU goods. Same one-stop-shop family, different side of the border. If you are not established in the EU, IOSS is the number that applies to you.
Can I use my friend's IOSS number for my shipments?
No. The number is registered to one seller, and the customs declaration must match the registrant. Parcels declared under a number that doesn't match the seller are treated as undeclared VAT — the exemption is lost, the buyer gets the bill, and the number's owner gets questions. This is one of the fastest ways to turn a working setup into an audit.