IOSS and OSS get confused constantly, but they solve different problems. Here's when IOSS is the scheme you actually need, why the €150 line matters, and what's different about filing it.
IOSS gets confused with OSS constantly, and the confusion is understandable — they're both "one-stop-shop" EU VAT schemes with similar-looking acronyms. But they solve different problems, and using the wrong one (or not registering for either) has real consequences at the border. Here's the difference, and when IOSS is the one you actually need.
OSS vs. IOSS, in one sentence each
Union OSS is for goods you already have inside the EU — in your own warehouse or a fulfillment center — that you sell and ship to a customer in another EU country. It's a quarterly return.
IOSS (Import One-Stop-Shop) is for goods shipped from outside the EU directly to an EU customer, where the shipment's value is €150 or less. It's a monthly return.
If you're a US, UK, or China-based seller (or dropshipper) shipping individual parcels into the EU, IOSS is almost certainly the scheme that applies to you — not OSS.
Why the €150 line matters
Before IOSS existed, low-value imports under €22 were exempt from EU VAT entirely, and anything over that got VAT collected (often clumsily, with extra courier handling fees) at the border. That exemption was scrapped in 2021 — every commercial import into the EU now owes VAT, no matter how small.
IOSS is the mechanism that lets a seller collect that VAT at checkout, at the correct rate for the customer's country, and remit it monthly through a single registration — instead of the customer getting hit with an unexpected VAT-plus-handling-fee bill when the parcel arrives. It only applies below €150 intrinsic value (the value of the goods themselves, not including shipping or insurance, generally). Above €150, standard import VAT and customs procedures apply instead, and IOSS doesn't cover it.
This is a real trap for sellers with mixed order sizes: a €120 order and a €180 order from the same shop, shipped the same way, are handled under two completely different regimes. Getting this wrong on the higher-value order means it wasn't eligible for IOSS in the first place, and needs to be handled as a standard import.
What's on an IOSS return
Structurally simpler than Union OSS: since every sale under IOSS is, by definition, an import from outside the EU, there's no "which member state did the goods ship from" question the way there is with OSS's fixed-establishment vs. dispatch-country splits. It's just: for each EU country your customer was in, at each VAT rate, how much you sold and how much VAT you collected — for that month, not quarter.
One IOSS-specific requirement worth flagging: each shipment needs a consignment/tracking number on record, tying the VAT collected at checkout to the specific parcel that crossed the border. Customs and postal carriers use it to confirm VAT was already paid, so the parcel clears without the buyer being charged again.
Registering for IOSS as a non-EU seller
If you're established outside the EU, you generally need an EU-based intermediary to register for IOSS on your behalf — you can't register directly the way an EU-based seller can. This is a one-time setup step through your own tax authority or an intermediary service, separate from anything a reporting tool like Vatlio does.
What Vatlio handles once you're registered
Vatlio classifies incoming orders automatically: intra-EU B2C sales become Union OSS lines, non-EU-origin sales under €150 to EU customers become IOSS lines (and anything over €150 gets flagged for review rather than silently misclassified), and builds the monthly country-by-country IOSS summary alongside your quarterly OSS one. Germany's BZSt accepts a distinct BOP CSV format for IOSS imports (different from the OSS format — max 1,000 rows instead of 6,000, and organized by month instead of quarter) — Vatlio exports both formats correctly, not just one dressed up as the other.
If you're shipping into the EU from outside and want your monthly IOSS numbers assembled from your actual order data instead of a spreadsheet, try Vatlio free — connect a store or upload a CSV and see the current period's breakdown.
Not tax advice. Vatlio prepares OSS/IOSS return summaries from your sales data. It does not file returns with any tax authority and does not provide tax advice — your accountant stays in control of the filing.