VAT One Stop Shop (OSS): EU Rules, IOSS and €10,000 Limit

The EU VAT One Stop Shop (OSS) lets businesses selling goods or services to consumers in other EU countries report and pay the VAT owed in each of those countries through one quarterly return filed in a single member state. Above the €10,000 EU distance selling threshold, you charge VAT at the customer's country rate, and OSS saves you from registering for VAT in every country you sell to.

This guide explains the three OSS schemes, including the Import One Stop Shop (IOSS), how the €10,000 threshold works, deadlines, a worked example and what the EU's VAT in the Digital Age (ViDA) package changes from 2027 and 2028. It is based on European Commission guidance at the time of writing (October 2026). It is general information, not tax advice; check with a qualified VAT adviser before you register.

What the VAT One Stop Shop covers

OSS replaced the Mini One Stop Shop (MOSS) on 1 July 2021. MOSS covered only telecoms, broadcasting and electronic services; OSS widened the system to most business-to-consumer (B2C) cross-border sales. There are three schemes:

Scheme	Who uses it	What it covers	Return frequency
Union scheme	EU-established businesses, and non-EU businesses holding goods in the EU	Intra-EU distance sales of goods to consumers; B2C services supplied in member states where the supplier is not established; some platform-facilitated domestic sales	Quarterly
Non-Union scheme	Businesses not established in the EU	All B2C services supplied to consumers in the EU	Quarterly
Import scheme (IOSS)	Sellers and platforms importing goods to EU consumers	Distance sales of imported goods in consignments of €150 or less, excluding excise goods	Monthly

OSS is for consumer sales. Sales to VAT-registered businesses in other EU countries normally use the reverse charge instead, which our reverse charge invoice guide explains. Your domestic sales also stay on your normal national VAT return.

The €10,000 threshold for EU distance selling

Since 1 July 2021, there is a single EU-wide threshold of €10,000 for small sellers. It replaced the old country-by-country distance selling thresholds, which were often €35,000 or €100,000.

The threshold applies only if you are established in one EU member state. You add up, excluding VAT:

• intra-Community distance sales of goods to consumers in other EU countries, and
• telecoms, broadcasting and electronic services supplied to consumers in other EU countries.

If the total was €10,000 or less in the previous calendar year and stays at or below €10,000 in the current year, you can charge your home country's VAT on those sales. Once the total goes over €10,000, the sale that crosses the line and every later one is taxed in the customer's country. You can also opt out of the threshold voluntarily and charge destination VAT from the first euro, but that choice binds you for at least two calendar years.

The threshold does not apply to businesses established outside the EU. A UK, US or Pakistani seller of digital services to EU consumers owes VAT in the customer's country from the first sale.

Threshold example

A small Dutch shop sold €8,500 of goods to consumers in other EU countries in 2025, charging Dutch VAT. In 2026 sales grow, and on 14 August a German order takes the year's cross-border total to €10,300. From that order onwards, the shop must charge German VAT to German customers, French VAT to French customers and so on. The earlier 2026 sales stay taxed in the Netherlands. Because the threshold was crossed in 2026, it cannot use the threshold again in 2027 either.

How the VAT One Stop Shop works step by step

1. Register in your member state of identification. For EU businesses, that is the country where you are established. You register online through that country's tax portal, and you can only register for each scheme in one member state.
2. Charge the right rate. Apply the VAT rate of the customer's country to each sale, for example 19% in Germany, 20% in France, 21% in Spain or 22% in Italy for standard-rated goods. Reduced rates vary by country and product.
3. Keep evidence of location. Record the delivery address for goods, or two pieces of non-contradictory evidence such as billing address and IP location for digital services.
4. File one return per quarter. List sales and VAT for each member state of consumption, in euros.
5. Pay in one go. Pay the total to your member state of identification, quoting the return reference. It passes each country's share on.
6. Keep records for 10 years. The tax authority of any customer country can ask to see them.

OSS return deadlines

Quarter	Return and payment due
January to March	30 April
April to June	31 July
July to September	31 October
October to December	31 January

Deadlines do not move for weekends or holidays, and you must file a nil return for a quarter with no OSS sales. Corrections to earlier returns are made in a later return, within three years of the original due date. There are no payment plans through OSS itself.

Worked example: one OSS return

Back to the Dutch shop. In the July to September 2026 quarter, its cross-border consumer sales after crossing the threshold were:

Customer country	Net sales	VAT rate	VAT due
Germany	€4,000	19%	€760
France	€3,000	20%	€600
Italy	€2,000	22%	€440
Total	€9,000		€1,800

The shop files one OSS return in the Netherlands by 31 October 2026 and pays €1,800 there. Without the VAT One Stop Shop, it would need VAT registrations and returns in Germany, France and Italy. Its input VAT on purchases is still reclaimed through its normal Dutch VAT return, not through OSS. Foreign VAT on costs incurred in other countries is reclaimed through the separate EU refund procedure.

IOSS: selling imported goods to EU consumers

The Import One Stop Shop covers goods shipped from outside the EU to EU consumers in consignments with an intrinsic value of €150 or less. Without IOSS, import VAT is collected when the parcel arrives, usually from the customer along with a handling fee from the carrier. With IOSS:

• the seller (or the marketplace) charges the destination country's VAT at checkout
• the IOSS number is passed to customs, so the parcel clears without import VAT being charged again
• the seller files one monthly IOSS return and pays the VAT collected

Sellers established outside the EU must usually appoint an EU-established intermediary to use IOSS, unless they are established in a country with a qualifying mutual assistance agreement with the EU. Excise goods, such as alcohol and tobacco, are excluded. Where an online marketplace facilitates the sale, the marketplace is usually treated as the deemed supplier and handles the VAT.

Customs rules for low-value parcels are also changing. The EU introduced a temporary €3 customs duty on low-value e-commerce items from 1 July 2026, ahead of wider customs reform. Check the European Commission's customs pages for the current scope before pricing EU deliveries.

ViDA: how the One Stop Shop is being extended

The EU's VAT in the Digital Age package, adopted in 2025, includes a "single VAT registration" pillar that builds directly on OSS. According to the European Commission, the key dates are:

Date	Change
1 January 2027	Clarifications for OSS and IOSS users, including a new OSS correction mechanism, more IOSS information before import and monthly IOSS listings per member state of consumption
1 July 2028	OSS schemes extended to more supplies; new scheme for transfers of own goods; mandatory reverse charge for more supplies by non-identified suppliers
1 July 2028	Platforms for short-term accommodation and road passenger transport become deemed suppliers where the provider does not charge VAT (member states may delay to 1 January 2030)
1 July 2030	Mandatory e-invoicing and digital reporting for intra-EU B2B transactions

The transfer of own goods change matters for sellers who keep stock in fulfilment centres in other EU countries. Today, moving your own stock across a border usually triggers a VAT registration in the destination country. The Commission adopted the implementing regulation for the new scheme in July 2026, and the aim is that these movements can be reported centrally instead. Our full guide to ViDA (VAT in the Digital Age) covers the e-invoicing and reporting side, and our e-invoicing mandates 2027 list tracks national deadlines.

OSS for UK and other non-EU sellers

Since Brexit, a business in Great Britain is a non-EU business for VAT, which changes how OSS applies:

• Services to EU consumers, such as online courses, software subscriptions or digital downloads, can be declared through the non-Union scheme. You register in one EU country of your choice and charge each customer's local VAT from the first sale, because the €10,000 threshold is not available to non-EU sellers.
• Goods shipped from Great Britain to EU consumers are imports into the EU. Consignments of €150 or less can go through IOSS, usually with an EU intermediary; above €150, import VAT and any duty are handled through customs.
• Stock held in an EU warehouse and sold to consumers in other EU countries can be reported through the Union scheme.
• Northern Ireland businesses selling goods to EU consumers can use the Union scheme, under the Windsor Framework arrangements.

Sales of services to EU business customers are normally outside OSS and use the reverse charge, so the invoice carries no UK or EU VAT. Our guide to invoicing international clients covers that case. Cross-border setups vary a lot, so take advice from a VAT adviser who knows both UK and EU rules before you register.

Invoices and records for OSS sales

When you use OSS, the invoicing rules of your member state of identification apply. For many consumer distance sales an invoice is not strictly required, but most online shops issue one or a detailed receipt anyway. If you do, make sure it shows:

• the VAT rate and amount for the customer's country, not your home rate
• your VAT number and business details
• a clear description of the goods or service and the date of supply
• the customer's country, which also supports your location evidence

Your shop platform should store the evidence of customer location automatically. Our guide to Shopify and WooCommerce invoices explains how to set up destination-based tax rates, and our invoice requirements by country guide lists local rules. If you invoice in a currency other than euros, convert for the return using the European Central Bank rate for the last day of the period; see our foreign currency invoice guide.

For one-off invoices to EU consumers, our free invoice generator lets you set the destination VAT rate, choose euros or another currency and download a PDF. It applies one tax rate per invoice and does not file OSS returns, so keep using your national tax portal for those.

Common VAT One Stop Shop mistakes

• Charging your home VAT rate after crossing the €10,000 threshold.
• Putting business-to-business sales through OSS instead of using the reverse charge.
• Declaring only some eligible sales through OSS; once registered, all sales covered by the scheme must go through it.
• Missing nil returns for quiet quarters.
• Trying to reclaim input VAT through the OSS return.
• Using the threshold as a non-EU seller, which is not allowed.

Conclusion

The VAT One Stop Shop turns what would be a VAT registration in every EU country into one quarterly return. Small EU sellers can stay on home-country VAT until cross-border consumer sales pass €10,000; after that, charge each customer's local rate and report it through OSS, or through IOSS for low-value imports. ViDA will widen the system further in 2027 and 2028. Whatever scheme you use, accurate invoices with the right destination rate make every return easier. Create one in minutes with our free invoice generator and a clean modern invoice template.