Post-Brexit: every EU sale is an export + import
Before 31 December 2020, UK ecommerce sellers were inside the EU VAT area. Selling to a French consumer from a UK warehouse worked like selling to a UK consumer, no customs, no import VAT, no special VAT scheme. You either charged UK VAT (under a "distance selling" threshold) or French VAT (if you exceeded the threshold for sales to France).
After 1 January 2021, every UK-to-EU consumer sale is:
- An export from the UK perspective, zero-rated for UK VAT.
- An import from the EU perspective, VAT and possibly duty owed in the destination country.
The default is that the EU customer pays import VAT (and any duty) when their parcel arrives, plus a handling fee from the carrier (£8-£12 typical). This is a terrible buyer experience and the customer often refuses the parcel.
IOSS and OSS are the schemes that let UK sellers charge EU VAT at checkout, so customers see the final price up-front and there's no nasty surprise on delivery.
What is OSS (One Stop Shop)?
OSS, the One Stop Shop, lets a business sell to consumers across multiple EU countries while filing one VAT return in a single EU member state, instead of registering in each destination country.
OSS applies when you have stock already located inside the EU (e.g. an EU warehouse, EU FBA centre, or EU 3PL) and sell to consumers in other EU member states from that stock. The default is that each EU country has its own VAT rules and registration threshold; OSS consolidates them.
For UK sellers, OSS is relevant if you use Pan-European FBA (where Amazon moves your stock between EU warehouses) or hold inventory at an EU 3PL. You register for OSS in one EU member state (usually Ireland for English-speaking convenience), charge destination-country VAT on each sale, and file one quarterly OSS return that splits the VAT across countries.
UK-established businesses can't register for OSS directly (the scheme is for businesses based in the EU). To use OSS, you typically need an EU-established intermediary or to register for OSS via a local EU establishment.
What is IOSS (Import One Stop Shop)?
IOSS, the Import One Stop Shop, lets a business charge EU VAT at the point of sale on consignments of intrinsic value €150 or less shipped from outside the EU. The buyer sees the EU VAT-inclusive price at checkout, the seller charges and collects the VAT, and the customs clearance happens automatically with no further VAT charged to the buyer.
IOSS applies specifically to UK sellers shipping direct to EU consumers (from UK stock, dropshipped from a non-EU supplier, etc.), for consignments under €150 in value.
Above €150 per consignment, IOSS doesn't apply, those imports go through normal customs and the buyer pays VAT (and possibly duty) on delivery, unless the seller offers Delivered Duty Paid (DDP) via a separate broker arrangement.
For UK sellers running Shopify or their own online store and shipping to EU consumers, IOSS is usually the right scheme. Marketplace sales (Amazon, eBay, Etsy) are handled by the marketplace's own IOSS registration, see below.
When UK sellers actually need OSS or IOSS
| Scenario | Scheme needed |
|---|---|
| Selling Shopify direct to EU consumers, under €150 per parcel | IOSS (or accept customs at delivery) |
| Selling Shopify direct to EU consumers, over €150 per parcel | None, buyer pays at delivery or use DDP broker |
| Selling Amazon EU / eBay EU / Etsy / TikTok to EU consumers | None, marketplace uses its own IOSS |
| Pan-European FBA, your stock in EU warehouses, selling within EU | OSS (or VAT-register in each FBA country) |
| EU warehouse / 3PL, selling from that stock to other EU countries | OSS |
| UK direct B2B sales to EU businesses | None, reverse charge applies; buyer self-accounts |
Where to register for OSS / IOSS (UK sellers)
UK-established businesses can't register for OSS or IOSS directly because both schemes require an EU place of establishment. The standard options for UK sellers:
- Register via an EU intermediary. Services like Eurora, Taxually, hellotax, Avalara act as your IOSS/OSS intermediary in an EU member state. Cost: typically £600-£1,500/year all-in, plus a per-transaction fee for IOSS. They handle the registration, filings, and act as your EU-side tax representative.
- Set up an EU subsidiary or branch. Only sensible if you have a real EU business presence. Otherwise the intermediary route is much simpler.
- Ireland-registered IOSS via local agent. Ireland is a popular IOSS registration country for English-speaking UK sellers because the filing language is English and the local tax authority (Revenue) is reasonably accessible.
Practical advice: if your EU consumer revenue is under ~£50k/year via your own store, the cost of IOSS via an intermediary (£600-£1,500/year) is often more than the benefit. Either accept the customs friction on delivery, or sell via Amazon/eBay/Etsy where the marketplace's IOSS handles it.
What Amazon, eBay, Etsy and TikTok handle for you
Since 1 July 2021, EU online marketplaces have been deemed the seller for VAT purposes on consignments of €150 or less shipped from outside the EU, OR on any sale by a non-EU-established seller from EU-located stock. In practice:
- Amazon uses its own IOSS for sales under €150 to EU consumers, regardless of whether the goods ship from UK stock or EU FBA stock. You don't need IOSS yourself for Amazon sales.
- eBay uses its own IOSS for sales under €150 from UK sellers to EU consumers.
- Etsy handles IOSS-equivalent collection for EU consumer sales under €150.
- TikTok Shop handles EU VAT for in-platform sales under €150.
If you sell exclusively via these marketplaces, you don't need to register for IOSS yourself. You only need IOSS for your own-store (Shopify, WooCommerce, etc.) direct-to-consumer EU sales.