OSS vs IOSS vs Non-Union OSS: Which EU VAT Scheme Do You Need? (2026)

Quick Decision Tree: Which Scheme Applies?

Answer these three questions:

1. Where is your business established? EU or non-EU?
2. What are you selling? Goods (physical) or digital services?
3. Who is your customer? B2C (consumer) or B2B (business)?

Side-by-Side Comparison Table

Last verified: 25 September 2026. Sources: EU Commission VAT rates, ECB euro reference rates and national tax authorities. Confirm with your local authority before filing.

Union OSS (For EU Businesses)

When It Applies

• You're established in an EU Member State
• You make B2C distance sales of goods to other EU countries
• Your pan-EU turnover exceeds €10,000 per calendar year
• OR you provide B2C digital services to EU consumers (no threshold)

The €10,000 Threshold — How It Works

The threshold is cumulative across all EU destinations, not per country.

Below Threshold: Domestic VAT Option

If pan-EU B2C goods ≤ €10,000/year, you can:

• Charge your domestic VAT rate on all cross-border sales
• File only domestic VAT return
• No OSS registration needed

But: Once you exceed €10,000, you must register for OSS prospectively (from the quarter you cross). No retroactive OSS.

Registration Process (EU Business)

1. Log into your home Member State tax portal (e.g., ELSTER for Germany, impots.gouv.fr for France, BZSt for Germany)
2. Navigate to "OSS Registration" / "One Stop Shop"
3. Confirm business details, add expected EU destinations
4. Receive OSS registration confirmation (usually instant)
5. Your existing VAT ID gets OSS endorsement

Filing & Payment

• Frequency: Quarterly (calendar quarters)
• Deadline: End of month following quarter (Apr 30, Jul 31, Oct 31, Jan 31)
• Form: Single OSS return via home MS portal
• Payment: One EUR payment to home MS → they distribute to destination MSs
• Currency: EUR only (convert at ECB rate of last day of quarter)

What Goes on the OSS Return

Per destination Member State:

• Net turnover (goods vs services separated)
• VAT rate applied
• VAT due

No invoice-level detail — summary by country/rate.

Non-Union OSS (For Non-EU Digital Service Providers)

When It Applies

• You're established outside the EU (no EU branch, no fixed establishment)
• You provide B2C digital services to EU consumers
• No threshold — applies from first euro

What Counts as "Digital Services" (Annex II, Directive 2006/112/EC)

• Streaming (video, music, gaming)
• Software/SaaS downloads & cloud access
• E-books, online courses, digital publications
• Website hosting, domain registration
• Online advertising, affiliate platforms
• Telecommunications, broadcasting
• Not: Physical goods, live human services (consulting, coaching via Zoom = not digital)

Registration Process (Non-EU Business)

1. Choose one EU Member State as your "Member State of Identification" (MSI)
2. Popular choices: Ireland (English, tech-friendly), Netherlands, Germany, Belgium
3. Register via that MS's tax portal (e.g., ROS for Ireland, ELSTER for Germany)
4. Provide: business identity, address, bank details, contact person
5. Receive Non-Union OSS VAT ID: format EU[MS][10 digits] (e.g., EUIE1234567890 for Ireland)

Choosing Your MSI — Strategic Considerations

My experience: Most US/UK SaaS clients choose Ireland — English portal, responsive support, familiar with digital services.

Filing & Payment

• Frequency: Quarterly
• Deadline: End of month following quarter
• Payment: One payment to MSI → they distribute
• Currency: EUR (convert at ECB rate last day of quarter)

IOSS (Import One Stop Shop) — For Low-Value Goods Imports

When It Applies

• B2C goods (physical) sold to EU consumers
• Goods value ≤ €150 per consignment (intrinsic value, not including shipping/insurance)
• Shipped from outside EU (or from EU warehouse but sold by non-EU business)
• Optional — but highly recommended for customer experience

Why IOSS Exists

Before July 2021: goods ≤ €22 were VAT-exempt on import. Now: all goods imported into EU incur VAT. IOSS lets you collect VAT at checkout, avoiding:

• Customer surprise fees at delivery (postal/courier collection charges €10-20)
• Delivery delays (customs hold until VAT paid)
• Cart abandonment (customers hate hidden fees)

IOSS vs Standard Import (No IOSS)

Registration Process

1. Choose an EU Member State as MSI (same as Non-Union OSS)
2. Register for IOSS via that MS portal
3. Receive IOSS VAT ID: format IM[MS][10 digits] (e.g., IMIE1234567890)
4. Provide IOSS number to your shipping carrier / fulfillment partner
5. Carrier includes IOSS number on customs declaration (CN23/CN22)

Key IOSS Rules

• Value limit: €150 per consignment (not per item). Split shipments if needed.
• Shipping/insurance: NOT included in €150 — only intrinsic value of goods
• Exclusions: Excise goods (alcohol, tobacco), goods subject to export restrictions
• Filing: MONTHLY (not quarterly) — by end of following month
• Payment: Monthly to MSI
• Record keeping: 10 years + customs documentation

Marketplace Deemed Supplier Rule

If you sell via a marketplace (Amazon, Etsy, eBay) that facilitates the sale: the marketplace is deemed supplier and must register for IOSS. You don't. But if you sell via your own Shopify/WooCommerce site: you are the supplier — you need IOSS.

Real-World Scenarios

Registration Deep-Dive

Union OSS Registration by Country

Non-Union OSS / IOSS Registration by Country

Common Mistakes & How to Avoid Them

1. Confusing Union OSS with IOSS: Union OSS = intra-EU distance sales (goods + digital). IOSS = import of goods ≤ €150 from non-EU. Different schemes, different returns, different IDs.
2. Thinking IOSS covers goods > €150: It doesn't. €150 is hard limit per consignment. Split shipments or use standard import.
3. Forgetting the €10k threshold is PAN-EU: Not per country. €4k Germany + €4k France + €3k Italy = €11k = OSS required.
4. Registering for Non-Union OSS when you have EU branch: If you have a fixed establishment in EU, you MUST use Union OSS, not Non-Union. "Fixed establishment" = permanent physical presence with human/technical resources.
5. Not converting to EUR correctly on OSS return: Use ECB rate of last day of quarter (not average, not invoice date). Document the rate used.
6. Missing monthly IOSS filing: IOSS is MONTHLY, not quarterly. Set calendar reminders.
7. Not providing IOSS number to carrier: Without it on customs declaration, carrier treats as standard import → customer gets surprise fees.
8. Charging wrong VAT rate on digital services: Digital services are generally taxed at the consumer's location, subject to small-business and special-scheme rules. Use our VAT Validator to confirm consumer's country.
9. Filing OSS but not domestic VAT return: OSS covers cross-border B2C only. Domestic sales still need a domestic VAT return (UStVA, CA3, FR-CA3), which OSS does not replace.
10. Charging destination VAT on B2B sales: if your customer is a VAT-registered business, the reverse charge usually applies instead and the supplier invoices at 0%. Charging destination VAT on a B2B supply is a common source of double taxation - see the reverse charge guide.
11. Assuming a non-EU seller can use Union OSS: Union OSS is for sellers established in the EU. A non-EU business selling the same digital services uses Non-Union OSS - a separate registration and a separate return.
12. Treating the €10,000 threshold as a revenue target: it is a pan-EU ceiling on cross-border B2C supplies, not a profit target. Passing it by a single euro pulls all your intra-EU distance sales into OSS.

What to Do First

If you are unsure which scheme applies, work through it in this order:

1. Establish where you are established. An office, branch or other fixed establishment in an EU Member State points to Union OSS. A server alone does not create one.
2. Identify what you sell, and to whom. Digital services or goods, to consumers or to businesses, decides between Union OSS, IOSS, the reverse charge and ordinary domestic VAT.
3. Check the value threshold. For intra-EU B2C distance sales the pan-EU figure is €10,000. For imports of goods the IOSS ceiling is €150 per consignment - a different number answering a different question.
4. Confirm the rate you charge. Destination-country standard rates are on the VAT rates page; use the VAT calculator to work out the amount.
5. Note the filing frequency. IOSS and Union OSS returns are monthly. Quarterly filing is available only for Union OSS in limited cases, and never for IOSS.

Check your own case before you file. The choice between these schemes turns on facts this guide cannot see: where you are established, what you sell, to whom, and at what value. If any of that is uncertain, it is worth confirming with a tax adviser rather than inferring it from a general guide.