EU VAT, OSS and IOSS for marketplace sellers in 2026: what marketplaces collect and what you still owe

By Operator One Editorial — 2026-06-14

Key takeaways

• Article 59c of the EU VAT Directive sets one EU-wide EUR 10,000 per calendar year threshold for intra-EU B2C distance sales of goods plus telecommunications, broadcasting and electronic services, and it only helps a seller established in a single EU Member State.
• Union OSS does not cover a seller's own domestic supplies or transfers of its own goods between EU Member States (it covers domestic supplies only where a marketplace is the deemed supplier), so holding stock in an Amazon FBA, Pan-EU, Central European Programme or bol LVB warehouse normally requires a local VAT registration in that country.
• The EU import scheme (IOSS) covers only distance sales of imported goods in consignments of an intrinsic value up to EUR 150, excludes products subject to excise duty, and is filed monthly by the end of the following month.
• Under Council Regulation (EU) 2026/382, EU customs duty relief for consignments up to EUR 150 ended on 1 July 2026, replaced by a temporary EUR 3 customs duty per tariff item that applies until 1 July 2028, whether or not IOSS is used.
• Articles 369k and 369x of the EU VAT Directive require OSS and IOSS records to be kept for 10 years from the end of the year of the transaction, while corrections to a filed OSS return are allowed for 3 years from its original due date.
• Persistent failure to file or pay under the EU OSS schemes, measured over three consecutive return periods with reminders unanswered for 10 days, leads to exclusion from all OSS schemes and 2 years of ineligibility under Implementing Regulation (EU) No 282/2011.

Five years into the EU's e-commerce VAT package, most marketplace sellers can describe what OSS stands for, but far fewer can say what it does not cover. That gap is where the real exposure sits: local VAT registrations that were never made, mis-routed B2B invoices, IOSS numbers used on parcels they were never meant to clear, and deemed-supplier assumptions that leave the seller carrying VAT it believed the marketplace had handled.

This piece walks through the EU regime as it applies in 2026: the legal foundation, the thresholds that matter, when OSS is the right answer, when it is the wrong one, the July 2026 customs duty change for parcels up to EUR 150, and what marketplaces collect on your behalf versus what stays your obligation.

The 2021 package, five years in

The current EU architecture comes from Council Directive (EU) 2017/2455 and Council Directive (EU) 2019/1995, both amending the VAT Directive 2006/112/EC and applied from 1 July 2021. The package did four things that still shape every cross-border filing decision:

• It abolished the national distance-selling thresholds (the old EUR 35,000 and EUR 100,000 country grid) and replaced them with a single EU-wide threshold of EUR 10,000 per calendar year in Article 59c of the VAT Directive, covering intra-EU B2C distance sales of goods plus telecommunications, broadcasting and electronic services combined.
• It extended the Mini One-Stop-Shop (MOSS) into the Union OSS, covering intra-EU distance sales of goods, B2C services supplied in a Member State where the supplier is not established, and domestic supplies of goods where an electronic interface is the deemed supplier.
• It set the non-Union OSS to cover B2C supplies of services in the EU by businesses not established in the EU.
• It introduced the Import One-Stop-Shop (IOSS) for distance sales of goods imported into the EU in consignments of an intrinsic value up to EUR 150, and removed the EUR 22 VAT exemption for low-value imports.

The package also inserted the deemed supplier rule into Article 14a of the VAT Directive. Where a taxable person facilitates certain B2C supplies through an electronic interface such as a marketplace, that interface is treated for VAT purposes as if it received the goods from the underlying seller and supplied them to the consumer itself. That shift in the legal supply is one of the most misunderstood mechanics in EU e-commerce VAT, and we come back to it below.

When OSS is the right answer

Union OSS is designed for one situation: you ship goods from one EU Member State to a consumer in another EU Member State, and you want to report destination-country VAT through a single quarterly return in your Member State of identification rather than registering in every Member State you ship to.

Union OSS works cleanly when:

• You hold stock in one EU Member State only, typically your home market or a single 3PL hub.
• Your intra-EU B2C distance sales exceed the EUR 10,000 Article 59c threshold, so destination-country VAT applies rather than home-country VAT.
• You sell to consumers, and any B2B sales are invoiced under the normal intra-Community rules outside OSS.
• Your goods are dispatched from inside the EU. Goods shipped to EU consumers from the UK, Switzerland, the US or any other third country are imports, which fall under IOSS or standard import VAT, not the Union OSS.

The EUR 10,000 threshold in Article 59c only applies to a supplier established in only one EU Member State whose intra-EU B2C distance sales of goods and cross-border telecommunications, broadcasting and electronic services did not exceed EUR 10,000 in the current calendar year nor in the preceding calendar year. Below it, that supplier may keep charging home-country VAT on intra-EU B2C distance sales; once the threshold is exceeded, destination-country VAT applies. Because the threshold is EU-wide rather than per country, it is a small-seller relief rather than a strategy for marketplace sellers with meaningful cross-border volume.

When OSS is the wrong answer

OSS is a reporting simplification, not a substitute for being VAT-registered where EU and national VAT law require it. The most common situations where a seller still needs a local VAT number are:

• You hold stock in that country. Moving your own goods from one EU Member State into a warehouse in another (for example through Amazon FBA, Pan-EU, Amazon's Central European Programme, bol's LVB fulfilment or a local 3PL) is a transfer of own goods, and sales made from that stock to consumers in the same country are domestic supplies. The Union OSS covers neither, so a local VAT registration is normally needed in the country where the stock sits.
• You sell B2B. A cross-border B2B supply of goods within the EU is an exempt intra-Community supply in the Member State of dispatch, with VAT accounted for by the business customer on the intra-Community acquisition in the destination Member State. It is reported in your local VAT return and recapitulative statement (EC Sales List), not in OSS.
• You import consignments above EUR 150. These clear under standard EU import rules, with import VAT and customs duty due at import. Neither IOSS nor the Union OSS applies.
• You assume the marketplace is liable when the Article 14a deemed-supplier rule does not apply. For intra-EU B2C sales by an EU-established seller through a marketplace, the seller, not the marketplace, remains liable for the VAT.

This is where the stock and OSS rules most often collide: a brand registers for Union OSS, joins Amazon's Central European Programme, and stock moves into warehouses in Poland and the Czech Republic. Those stock transfers and local sales fall outside OSS, so Polish and Czech VAT registrations are needed from the moment stock is held there.

IOSS: the EUR 150 import lane

IOSS is the import-side counterpart to OSS, with a narrower scope than many non-EU sellers assume. Under Article 369l of the VAT Directive it covers distance sales of goods imported from a third territory or third country, except products subject to excise duty, in consignments of an intrinsic value not exceeding EUR 150. IOSS returns are monthly and due by the end of the month following the tax period.

Used correctly, IOSS lets the seller (or the marketplace acting as deemed supplier) charge destination-country VAT at checkout, pass the IOSS number to the customs declarant, and have the parcel released without import VAT being collected again at the EU border.

What changed on 1 July 2026: IOSS was always a VAT scheme, but until 30 June 2026 consignments up to EUR 150 also benefited from EU customs duty relief. Council Regulation (EU) 2026/382 removed that relief from 1 July 2026 and introduced a temporary flat customs duty of EUR 3 per item, where an item means each distinct tariff classification in the parcel (five T-shirts count as one item, one T-shirt plus one watch count as two). According to the European Commission, the EUR 3 duty applies to all distance sales of imported goods up to EUR 150 regardless of the VAT scheme used (IOSS, special arrangements or standard import VAT), and applies until 1 July 2028, after which normal customs duty rates by type of good apply. An IOSS parcel is therefore VAT-settled at checkout but no longer duty free.

Three failure modes are common with IOSS:

• IOSS number misuse. A marketplace's IOSS number relates to the sales that marketplace facilitates as deemed supplier under Article 14a. Using it on parcels from your own webshop sales is misuse, because the marketplace has not declared or paid VAT on those sales.
• Misreading the EUR 150 limit. The IOSS threshold is measured on the intrinsic value of the consignment, not of each item, and the EUR 3 duty is charged per tariff item in the consignment, so splitting orders into more parcels does not reduce the customs duty per item.
• Excise goods. Products subject to excise duty, such as alcohol and tobacco products, are excluded from IOSS under Article 369l regardless of value.

A seller established outside the EU must appoint an EU-established intermediary to use IOSS. The European Commission's OSS portal states the only exception: a seller established in a country with a VAT mutual assistance agreement with the EU (such as Norway) making sales of goods dispatched from that country.

What the marketplace collects, what you still owe

Under Article 14a of the VAT Directive, a marketplace becomes the deemed supplier, and therefore liable for the VAT on the sale to the consumer, in two scenarios:

• Distance sales of goods imported into the EU in consignments with an intrinsic value up to EUR 150, where the marketplace facilitates the sale (Article 14a(1)).
• Supplies of goods within the EU (domestic or intra-EU) to consumers, where the underlying seller is not established in the EU (Article 14a(2)).

Outside those two cases, and most importantly for intra-EU B2C sales by EU-established sellers, the seller remains the VAT-liable party. The marketplace may still issue invoices and collect funds, but legally the supply and the VAT are the seller's.

Where the marketplace is the deemed supplier, the underlying seller's supply to the marketplace is exempt with a right to deduct input VAT under Article 136a of the VAT Directive. That supply still has to be recorded and evidenced in the seller's books. Separately, bringing a non-EU seller's own stock into an EU warehouse is an import in its own right, with import VAT and customs duty due, and it does not disappear because the consumer-facing VAT is the marketplace's.

National law adds pressure. Section 25e of the German VAT Act (UStG) makes the operator of an electronic interface liable for unpaid VAT on the supplies it facilitates, subject to exceptions, which gives marketplaces selling into Germany a legal reason to require evidence of a seller's VAT registration.

The quarterly OSS return in practice

The EU Union OSS return looks simple: one return per calendar quarter, submitted with payment by the end of the month following the quarter (30 April, 31 July, 31 October and 31 January), paid to the Member State of identification, which passes the VAT on to each Member State of consumption. The friction sits in three less visible places:

• Data reconciliation. The OSS return is broken down by Member State of consumption and VAT rate. Amazon, bol, Kaufland, Zalando, Allegro and other marketplaces report sales and refunds on different timing, so without one consolidated ledger the return has to be rebuilt from separate exports every quarter.
• Returns, refunds and corrections. Corrections to a filed OSS return are made electronically within 3 years of the date the original return was due. Records are a separate and longer obligation: Articles 369k and 369x of the VAT Directive require OSS and IOSS records to be kept for 10 years from the end of the year in which the transaction took place, with the content defined in Article 63c of Implementing Regulation (EU) No 282/2011, including proof of goods returned.
• FX. Where sales were made in other currencies, amounts are converted using the European Central Bank exchange rate published on the last date of the tax period, not the rate on the date of each sale.

Missing returns or payments has a hard consequence. Under Implementing Regulation (EU) No 282/2011, as amended by Implementing Regulation (EU) 2019/2026, a trader who receives reminders for three immediately preceding return periods and does not file or pay within 10 days of each reminder (payment failures under EUR 100 excepted) is treated as persistently failing to comply, is excluded from the OSS schemes and cannot use them for 2 years.

What comes next: ViDA from 1 July 2028

Council Directive (EU) 2025/516 (VAT in the Digital Age, adopted 11 March 2025, in force 14 April 2025) is being rolled out in stages. According to the European Commission, its single VAT registration pillar applies from 1 July 2028 and extends the OSS schemes, including to transfers of own goods, and introduces mandatory reverse charge for non-identified suppliers. From the same date, platforms facilitating short-term accommodation rental and passenger transport by road become deemed suppliers (Member States may delay this until 1 January 2030). The adopted text did not extend the Article 14a deemed-supplier rule to goods sold by EU-established sellers, so the liability position described above continues.

How to register for Union OSS, step by step

1. Confirm OSS is the right scheme. Check whether your intra-EU B2C distance sales exceed the EUR 10,000 Article 59c threshold, and list every EU Member State where you hold stock, because stock locations need local VAT registrations outside OSS.
2. Identify your Member State of identification. An EU-established business registers in the Member State where it is established; a business established outside the EU registers for Union OSS in a Member State from which its goods are dispatched.
3. Register through that Member State's tax portal. Registration takes effect from the first day of the next calendar quarter, or from the date of your first supply if you notify the Member State of identification by the tenth day of the month following that supply.
4. File and pay every quarter. Submit the Union OSS return and payment by the end of the month following each calendar quarter, broken down by Member State of consumption and VAT rate, using the ECB exchange rate of the last day of the tax period.
5. Keep records and correct through later returns. Keep transaction records for 10 years from the end of the year of the transaction, and make corrections to earlier OSS returns electronically within 3 years of their original due date.

Frequently asked questions

Do I need a local VAT number if I use Amazon FBA stock in Germany or Poland?

Yes, normally. The EU Union OSS covers a seller's intra-EU B2C distance sales, not the seller's own domestic supplies made from stock held in a country or transfers of your own goods between EU Member States. Moving inventory into a German or Polish warehouse through Amazon FBA, Pan-EU or the Central European Programme is a transfer of own goods, and local sales from that stock are domestic supplies, so a VAT registration in Germany or Poland is required. Stock held in bol's LVB warehouse in the Netherlands works the same way.

Is the EUR 10,000 OSS threshold applied per country?

No. Article 59c of the EU VAT Directive, applied since 1 July 2021, sets one EU-wide EUR 10,000 per calendar year limit covering all intra-EU B2C distance sales of goods plus telecommunications, broadcasting and electronic services combined. It only applies to a supplier established in only one EU Member State, and only if the limit was not exceeded in the current or the preceding calendar year. Below it, home-country VAT may be charged; above it, destination-country VAT applies.

When is the EU OSS return due, and which exchange rate applies?

The EU Union and non-Union OSS returns cover a calendar quarter and are due, with payment, by the end of the following month, so January to March is due by 30 April. The IOSS return is monthly on the same end-of-following-month basis. Sales in other currencies are converted at the European Central Bank rate published on the last date of the tax period, not the rate on the date of the sale.

Does IOSS still make sense now that the EU removed duty relief on parcels up to EUR 150?

Yes, but only as a VAT simplification. From 1 July 2026, Council Regulation (EU) 2026/382 ended EU customs duty relief for consignments up to EUR 150 and introduced a temporary EUR 3 duty per tariff item until 1 July 2028, whichever VAT scheme is used. IOSS still lets the seller charge destination VAT at checkout on imported consignments up to EUR 150, so parcels are not charged import VAT again at the border. Excise goods remain outside IOSS.

Does a seller established outside the EU need an intermediary to use IOSS?

Yes, in almost every case. Under the EU import scheme, a taxable person established outside the EU must appoint an EU-established intermediary to register for and use IOSS. The European Commission's OSS portal names one exception: a seller established in a country with a VAT mutual assistance agreement with the EU, such as Norway, making sales of goods dispatched from that country. EU-established sellers may appoint an intermediary but are not required to.

If the marketplace is the deemed supplier, am I off the hook for VAT?

Only for the consumer-facing VAT, and only in the two cases in Article 14a of the EU VAT Directive: facilitated distance sales of imported goods in consignments up to EUR 150, and supplies of goods within the EU to consumers by a seller not established in the EU. Your supply to the marketplace is exempt with a right of deduction under Article 136a and must still be recorded. For intra-EU B2C sales by an EU-established seller, the VAT stays yours.

Who carries the VAT obligation when a Merchant of Record is the seller?

Under EU VAT Directive 2006/112/EC, the VAT on the consumer sale belongs to the legal seller, so where Operator One sells as Merchant of Record, that consumer-facing VAT is reported under Operator One's registrations. The brand's sale to Operator One is a separate B2B supply. This does not remove every brand obligation: if goods are dropshipped from the brand's own stock in another EU Member State, the brand can still need a VAT registration where that stock sits.

What happens if a marketplace seller ignores EU VAT obligations?

Several things. Under Implementing Regulation (EU) No 282/2011, persistent failure to file or pay OSS returns over three consecutive periods, with reminders unanswered within 10 days, means exclusion from the OSS schemes and 2 years of ineligibility. Section 25e of the German UStG makes marketplaces liable for sellers' unpaid VAT, so they demand registration evidence. Since 1 January 2024, payment service providers in the EU report payees receiving more than 25 cross-border payments per quarter to national tax administrations, and that data is centralised in the EU's CESOP database.

How long must OSS records be kept, and how long can a return be corrected?

Ten years and three years respectively. Articles 369k and 369x of the EU VAT Directive require OSS and IOSS records to be kept for 10 years from the end of the year in which the transaction took place, and Article 63c of Implementing Regulation (EU) No 282/2011 defines what those records must contain. Corrections to a filed OSS return are made electronically within 3 years of the date the original return was due.

Where a Merchant of Record carries the obligation

When Operator One acts as Merchant of Record, it is the legal seller on the marketplace: listings show the client as the brand and Operator One as the seller. The VAT on those consumer sales is therefore Operator One's to report, and where Operator One imports goods into the EU it is the importer, liable for import VAT and the customs duty that now applies to consignments up to EUR 150. The brand's own position still depends on the goods flow: bulk supply and import lanes generally keep the brand out of local registrations, while dropshipping from the brand's own stock in another EU Member State can still require a VAT registration where that stock is held. Product compliance duties such as CE marking and the EU Declaration of Conformity stay with the manufacturer. See the compliance glossary for the underlying definitions.

Sources: Council Directive (EU) 2017/2455; Council Directive (EU) 2019/1995; Council Implementing Regulation (EU) 2019/2026; Council Directive (EU) 2025/516 (ViDA); European Commission OSS portal: declare and pay; European Commission OSS portal: registration; European Commission: EUR 3 temporary duty on low-value imports; Council of the EU press release, 12 December 2025; European Commission: VAT in the Digital Age; Section 25e UStG (Germany); BZSt: CESOP.