EU E-Commerce VAT at Five: OSS, IOSS and CESOP Obligations

On 3 September 2026 the European Commission put a number on five years of the EU e-commerce VAT reforms: more than 125 billion euro in VAT collected through the One Stop Shop and the Import One Stop Shop since the rules took effect on 1 July 2021. In 2025 alone the schemes brought in more than 38 billion euro, up 17 percent on the previous year, across more than 193,000 registered businesses. Those figures show extensive use of the EU’s simplified VAT schemes for cross-border e-commerce, but OSS and IOSS remain optional schemes with defined statutory scopes.

Behind the headline sit three groups with three different filing jobs. An online seller may use OSS for supplies falling within an OSS scheme and may use IOSS for eligible distance sales of imported goods; the schemes are optional, and supplies not declared through them must be accounted for under the ordinary VAT rules. An electronic interface that facilitates a qualifying supply within Article 14a can be deemed to have received and supplied the goods itself. Payment service providers apply the separate CESOP rules to qualifying cross-border payments. Whether a particular PSP must keep and transmit the payment records depends on the Article 243b conditions, including the quarterly threshold and the allocation rule between payer and payee PSPs. A single purchase can generate related VAT and CESOP records across different parties, but the applicable VAT scheme and any CESOP reporting depend on the statutory conditions for each regime.

Get the registration or return frequency wrong and the consequences can be operational. Persistent OSS/IOSS non-compliance can lead to exclusion; one specified persistent-failure case is where reminders have been sent for three immediately preceding return periods and the respective return has not been submitted within 10 days after each reminder. Which obligation applies, and when, depends on the party’s role and establishment, the type and destination of the supply, the relevant turnover or intrinsic-value tests, and, for CESOP, the payment-count and PSP-allocation rules.

Related reading: CESOP reporting for payment service providers

The dates and thresholds that decide which return you file

Almost every operational question about EU e-commerce VAT resolves to one of a small set of dates and euro amounts. The calendar and the thresholds are worth keeping in front of you before any scheme detail, because they determine registration, cadence, and whether a given consignment qualifies at all.

• 1 July 2021: OSS and IOSS took effect, postponed from 1 January 2021 by Council Decision (EU) 2020/1109 during the pandemic.
• 10,000 euro: where the supplier meets Article 59c(1)(a) and (b), the aggregate threshold for the qualifying intra-Community distance sales of goods and TBE services covered by Article 59c; it must not have been exceeded in either the current or preceding calendar year.
• 150 euro: the maximum intrinsic value of an imported consignment eligible for IOSS.
• OSS return: quarterly, due by the end of the month following the reporting quarter.
• IOSS return: monthly, due by the end of the month following the reporting month.
• 1 January 2024: the CESOP record-keeping and reporting rules began to apply. For Q1 2024, PSPs had to make the required information available to the relevant home or host Member State(s) no later than 30 April 2024; Member States then had to transmit the collected information to CESOP no later than 10 May 2024.
• More than 25 cross-border payments to the same payee in a calendar quarter, calculated per Member State and per Article 243c(2) identifier, with aggregation across identifiers where the PSP has information that they belong to the same payee: the CESOP record-keeping trigger.
• 1 July 2028: the single VAT registration and OSS extension under the VAT in the Digital Age package take effect.

What the 2021 package replaced

The reforms come from two Council directives. Council Directive (EU) 2017/2455 of 5 December 2017 amended the VAT Directive (2006/112/EC) and Directive 2009/132/EC, and Council Directive (EU) 2019/1995 of 21 November 2019 added the detail on distance sales of goods and on marketplaces. Together they retired two older mechanics that had shaped cross-border VAT for years.

The first casualty was the per-country distance-selling threshold. Before July 2021 a seller could ship into another Member State up to a national ceiling, typically 35,000 or 100,000 euro, before it had to register there and charge local VAT. Those national thresholds are gone. For a supplier meeting Article 59c(1)(a) and (b), the former national thresholds were replaced by a single €10,000 aggregate test for the qualifying intra-Community distance sales of goods and TBE services covered by Article 59c. Where Article 59c applies, the €10,000 test covers the specified intra-Community distance sales of goods and TBE services, and the threshold must not have been exceeded in either the current or preceding calendar year. Once it is exceeded, Article 33(a) and Article 58 apply from that time to those qualifying supplies.

For a supplier meeting Article 59c(1)(a) and (b), the €10,000 threshold aggregates the qualifying intra-Community distance sales of goods and TBE services covered by Article 59c across destination Member States into one total. Once the Article 59c threshold is exceeded, the destination-place rules apply from that time to the qualifying intra-Community distance sales of goods and TBE services covered by Article 59c; the threshold does not govern all categories of cross-border B2C supply. Treating it as 10,000 euro per destination country risks under-declaring in the country of consumption.

The second casualty was the VAT exemption on imported consignments below 22 euro. The €22 import VAT exemption was abolished from 1 July 2021, so low-value commercial goods no longer obtain a VAT exemption merely because their value is below €22. IOSS exists precisely to make that VAT collectible at the point of sale rather than chased at the border.

OSS, IOSS and the non-Union scheme: which return applies

The architecture is three special schemes, each with its own scope and its own filing rhythm. Different return frequencies and different registration routes mean the choice between them carries real operational weight.

The Union scheme (Articles 369a to 369k of the VAT Directive) covers intra-Community distance sales of goods, certain supplies made by Article 14a(2) deemed suppliers, and services supplied to non-taxable persons by taxable persons established in the EU but not established in the Member State of consumption. A non-EU taxable person can use the Union scheme for eligible intra-Community distance sales of goods, while services supplied by a taxable person not established in the EU fall within the non-Union scheme. The non-Union scheme (Articles 358a to 369) is for suppliers established outside the EU providing services to EU consumers, and it also files quarterly. The Import One Stop Shop (Articles 369l to 369x) covers distance sales of goods imported from outside the EU in consignments not exceeding 150 euro, and it files monthly.

A worked non-example clears up most confusion. A US retailer shipping a 200 euro jacket directly to a French consumer cannot use IOSS, because the consignment sits above the 150 euro line. That parcel is imported under the ordinary import rules. The special arrangements for declaration and payment of import VAT under Article 369y are themselves limited to non-excise goods in consignments with an intrinsic value not exceeding €150. Article 369l limits IOSS to eligible imported goods in consignments with an intrinsic value not exceeding €150; a consignment above that limit cannot be declared under IOSS.

The 150 euro line and what intrinsic value means

The IOSS threshold turns on intrinsic value, and that term is narrower than the total a customer pays. For commercial goods, intrinsic value is the price of the goods themselves when sold for export to the customs territory of the Union, excluding transport and insurance costs unless they are included in the price and not separately indicated on the invoice, and excluding any other taxes and charges ascertainable by customs from relevant documents. A 140 euro order that shows 20 euro of shipping separately stays inside IOSS at 140 euro of intrinsic value, even though the customer paid 160 euro.

Two carve-outs sit alongside the number. Goods subject to excise duty, such as alcohol and tobacco, fall outside IOSS whatever their value, and so does any consignment above 150 euro. Commission explanatory notes state that where a single order from one supplier exceeds €150, IOSS should not be used even if the order is dispatched in several consignments below €150, and note that customs may verify artificial splitting.

When the marketplace becomes the taxpayer

The 2021 rules pulled electronic interfaces into the VAT chain directly. Under Article 14a of the VAT Directive, an electronic interface that stands between a seller and a consumer on qualifying sales is deemed to have bought the goods from the underlying seller and sold them on, so the platform accounts for the consumer-facing VAT. Two situations trigger it. Article 14a(1) applies where the interface facilitates distance sales of goods imported in consignments not exceeding 150 euro. Article 14a(2) applies where the interface facilitates a supply of goods already within the EU made by a seller not established in the EU, at any value.

The mechanic splits one commercial sale into two deemed supplies: a supply from the seller to the platform, and a supply from the platform to the customer. The consumer-facing leg is the one the platform reports, typically through IOSS for the imported-goods case or the Union scheme for the intra-EU case. Where Article 14a bites, the marketplace is the deemed supplier for that VAT, and the seller’s leg to the platform is treated separately. Platforms also carry the record-keeping duty on facilitated supplies, a strand that overlaps in practice with the platform-operator information rules covered in our DAC7 platform-operator reporting guide, even though DAC7 and the VAT deemed-supplier rule are separate obligations built for different purposes.

Filing rhythm: quarterly OSS, monthly IOSS, and how corrections work

Both OSS scheme returns run on the calendar quarter and are due by the end of the month that follows it, so the first quarter’s return is filed by 30 April. IOSS runs monthly, due by the end of the following month. Payment of the VAT is due no later than the return deadline. The return is made out in euro, but a Member State that has not adopted the euro may require it to be made out in its national currency and may also require payment to an account denominated in that currency. A deadline that lands on a weekend or public holiday is not pushed to the next working day.

Corrections are where the schemes behave differently from a domestic return. A filer does not reopen and amend a return already submitted; an adjustment to a prior period is made in a later return, flagged against the Member State and period it relates to. Records behind every OSS and IOSS return must be kept for ten years and produced electronically to any Member State of consumption on request, so the audit trail has to survive well beyond the filing itself. Persistent non-compliance can lead to exclusion from the schemes. Where a taxable person is excluded for persistent failure to comply, Article 58b generally imposes a two-year exclusion from the special schemes. For the import scheme, applicability of the two-year rule where exclusion was due to the intermediary’s persistent failure should be confirmed against Article 58b of Implementing Regulation (EU) No 282/2011 directly. For failure to submit returns, one specified persistent-failure case requires reminders for three immediately preceding return periods and failure to submit each respective return within 10 days after the reminder.

CESOP: the payment-side reporting regime for qualifying cross-border payments

The schemes above collect the VAT. A separate regime checks whether it was collected at all. Council Directive (EU) 2020/284 of 18 February 2020 inserted Articles 243a to 243d into the VAT Directive and, with Council Regulation (EU) 2020/283, built the Central Electronic System of Payment information, or CESOP. From 1 January 2024, payment service providers must, for each calendar quarter, keep and make available the prescribed records where the Article 243b conditions are met, including the more-than-25 cross-border-payment threshold and the payer/payee PSP allocation rule. The records are made available to the relevant home Member State or host Member State(s) in accordance with Article 243b(4)(b) and Article 24b of Regulation (EU) No 904/2010; the Member States then transmit the collected information to CESOP.

The obligation is bounded by a counting rule rather than a value. Where, in a calendar quarter, the PSP provides payment services corresponding to more than 25 cross-border payments to the same payee, Article 243b(2) requires the count to be calculated per Member State and per Article 243c(2) identifier, with aggregation across identifiers where the PSP has information that they belong to the same payee; where the threshold is met, the PSP to which the record-keeping requirement applies must keep and transmit the prescribed information. Under Article 243b(3), the payer’s PSP is not subject to that requirement for a payment where at least one payee PSP is located in a Member State, although the payment still counts towards the payer PSP’s threshold calculation. For CESOP, payer and payee location is determined under Article 243c using the relevant IBAN or other identifier and, where those are absent, the BIC or other identifier of the PSP; the payment is cross-border where those rules locate the payer in one Member State and the payee in another Member State, a third territory or a third country. CESOP is a data feed. Tax administrations use it to match declared sales against payment flows, and a payment institution’s obligation is complete and accurate transmission of those records. Assessing or collecting VAT sits outside the PSP’s CESOP duty entirely. Teams building that pipeline for the first time will recognise the reconciliation traps set out in our note on common CESOP filing errors and fixes.

Where a single sale hits all three regimes

Consider one €90 imported order sold through a marketplace and paid by card. If the interface facilitates the qualifying distance sale, Article 14a(1) deems it to have received and supplied the goods. If the platform has opted to use IOSS, it declares the consumer-facing supply through IOSS; IOSS itself remains optional. The underlying seller is treated as making a deemed B2B supply to the platform; for the Article 14a(1) import case, the Commission explanatory notes state that this supply takes place outside the EU and EU VAT rules do not apply to that leg. A relevant payment service provider counts the payment towards its CESOP threshold only if the payment is cross-border under Articles 243b and 243c; any CESOP transmission then also depends on the more-than-25 threshold and the payer/payee PSP allocation rule. Accordingly, the purchase appears in the marketplace’s IOSS return only if IOSS is used, and in CESOP only where the CESOP statutory conditions are met.

That overlap is deliberate, and it is what turns the milestone numbers into a live concern for reporting teams. CESOP stores, aggregates and cross-checks reported payment information with other European databases and makes the resulting information available to Member States’ anti-fraud experts to help detect possible e-commerce VAT fraud. The reporting discipline that keeps a business out of that conversation is consistency across the legs it controls: the scheme return, the marketplace treatment, and the underlying invoice all describing the same transaction the same way.

What ViDA changes from 2028

The framework is not static. The VAT in the Digital Age package, adopted on 11 March 2025, comprises Council Directive (EU) 2025/516, Council Regulation (EU) 2025/517 and Council Implementing Regulation (EU) 2025/518; its Single VAT Registration pillar extends and amends the OSS/IOSS framework. From 1 July 2028 a single VAT registration lets a business handle more of its EU obligations through one OSS-style portal, extending the scheme to further B2C supplies and reducing the number of local VAT registrations a cross-border seller needs. The package also strengthens the platform deemed-supplier model and phases in digital reporting and e-invoicing for intra-EU B2B trade over the rest of the decade.

For a team filing today, the future ViDA measures are planning inputs, but their principal application dates are already set in the enacted package: OSS/IOSS clarifications apply from 1 January 2027, the main Single VAT Registration reforms start on 1 July 2028, and cross-border B2B Digital Reporting Requirements start on 1 July 2030. Implementing work continues on technical delivery. Sellers weighing that alongside the wider EU move to simpler filing will find the context in our coverage of the EU tax simplification and DAC recast package.

Frequently Asked Questions

Do I need OSS if I only sell to consumers in my own country?

No. OSS is built for cross-border B2C supplies. Purely domestic sales stay on your national VAT return. The exception runs the other way: where a marketplace is the deemed supplier and the goods are already in the country of the consumer, that domestic leg can be reported through the Union scheme, so a platform can end up using OSS for supplies that look domestic.

A customer orders a 200 euro item shipped from outside the EU. Can I use IOSS?

No. IOSS is limited to consignments with an intrinsic value of 150 euro or less. Above that line the goods fall outside IOSS and are imported under the ordinary import rules; the Article 369y special arrangements are also limited to consignments with an intrinsic value not exceeding €150. Splitting the order into two parcels to get under the line does not create IOSS eligibility.

If the marketplace is the deemed supplier, does the underlying seller still register for VAT?

The deemed-supplier rule reassigns the consumer-facing VAT on the qualifying supply to the marketplace. The underlying seller is treated as making a separate deemed B2B supply to the marketplace. For Article 14a(1) imports, the Commission explanatory notes state that this deemed B2B supply takes place outside the EU and EU VAT rules do not apply to that leg; for Article 14a(2) supplies within the EU, Article 136a exempts the deemed B2B supply. The seller may still have VAT obligations arising from other transactions, registrations or input-tax positions.

Is the 10,000 euro threshold measured per Member State?

For a supplier that meets Article 59c(1)(a) and (b), no. The €10,000 test is a single aggregate threshold for the qualifying intra-Community distance sales of goods and TBE services covered by Article 59c, rather than a separate threshold for each destination Member State. Once the Article 59c threshold is exceeded, Article 33(a) and Article 58 apply from that time to the qualifying intra-Community distance sales of goods and TBE services covered by the threshold.

My business is a payment service provider, not a seller. Do I report a payment to a payee in the same Member State?

No. CESOP applies only to payments that are cross-border under Articles 243b and 243c. For that test, payer and payee location is determined from the specified account or PSP identifiers; a payment that is domestic under those rules does not count toward the Article 243b(2) threshold and is not subject to the CESOP record-keeping requirement.

When can repeated failure to file OSS returns lead to exclusion?

Persistent failure to comply can lead to exclusion and, for a taxable person persistently failing to comply, a two-year quarantine period under Article 58b of Implementing Regulation (EU) No 282/2011. For the import scheme, applicability of the two-year rule where exclusion was due to the intermediary’s persistent failure should be confirmed against Article 58b of Implementing Regulation (EU) No 282/2011 directly. Article 58c requires a taxable person excluded from the non-Union or Union scheme to discharge post-exclusion VAT obligations directly with the Member State of consumption; it does not state the same rule for exclusion from the import scheme.

Does IOSS cover business-to-business imports?

Ordinary B2B imports do not fall within IOSS. However, the statutory definition of a distance sale of imported goods extends beyond ordinary consumers to certain other categories of person; verify Article 369l of the VAT Directive for the precise scope.

Related Articles

• CESOP Reporting Explained: how payment service providers record and transmit cross-border payment data to the EU anti-fraud database.
• CESOP 2026 Filing Errors and Fixes: the recurring data-quality mistakes in quarterly CESOP transmissions and how to correct them.
• DAC7 Reporting for Luxembourg Platform Operators: the separate information-reporting duty that digital platforms owe on the sellers they host.
• EU Tax Simplification Package 2026: the DAC recast and the wider push to simplify EU reporting obligations.
• CARF Crypto Tax Reporting: the parallel automatic-exchange framework reaching crypto-asset transactions.

Key Takeaways

• For a supplier meeting Article 59c’s conditions, the €10,000 threshold aggregates the qualifying intra-Community distance sales of goods and TBE services specified in that Article; once the threshold is exceeded, Article 33(a) and Article 58 apply from that time to those supplies.
• IOSS applies only to imported consignments of 150 euro or less, measured by intrinsic value excluding separately shown transport and insurance.
• OSS returns are quarterly and due by the end of the month after the quarter; IOSS returns are monthly and due by the end of the following month, with payment on the same date.
• Under Article 14a, a facilitating marketplace is the deemed supplier for the consumer VAT on imports up to 150 euro and on EU-held goods sold by non-EU sellers.
• Corrections to a filed OSS or IOSS return are made in a later return, not by amending the original, and records are kept for ten years.
• CESOP record-keeping applies once the Article 243b(2) threshold is met, calculated per Member State and per Article 243c(2) identifier, with aggregation across identifiers where the PSP has information that they belong to the same payee; Article 243b(3) then applies the payer/payee PSP allocation rule.
• Persistent failure to comply can trigger exclusion. A taxable person excluded for persistent failure is generally subject to the two-year rule in Article 58b. For the import scheme, applicability of the two-year rule where exclusion was due to the intermediary’s persistent failure should be confirmed against Article 58b of Implementing Regulation (EU) No 282/2011 directly. For failure to submit returns, one specified case is where reminders were sent for three immediately preceding return periods and each respective return remained unfiled 10 days after the reminder.
• ViDA’s principal application dates are set in the enacted package: OSS/IOSS clarifications from 1 January 2027, single VAT registration and wider OSS from 1 July 2028, and cross-border B2B Digital Reporting Requirements from 1 July 2030.

Sources and References

• European Commission, taxation and customs news, “EU VAT rules for e-commerce: five years, more than EUR 125 billion in VAT revenue” (3 September 2026): taxation-customs.ec.europa.eu
• Council Directive (EU) 2017/2455 of 5 December 2017 (VAT e-commerce), OJ L 348, 29.12.2017: eur-lex.europa.eu
• Council Directive (EU) 2019/1995 of 21 November 2019 (distance sales of goods): eur-lex.europa.eu
• Council Decision (EU) 2020/1109 of 20 July 2020 (postponement to 1 July 2021): eur-lex.europa.eu
• Council Directive (EU) 2020/284 of 18 February 2020 (payment service provider records, CESOP): eur-lex.europa.eu
• Council Regulation (EU) 2020/283 of 18 February 2020 (CESOP central system): eur-lex.europa.eu
• Council Directive (EU) 2025/516 of 11 March 2025 (VAT in the Digital Age, VAT Directive amendments): eur-lex.europa.eu
• Council Regulation (EU) 2025/517 of 11 March 2025 (VAT in the Digital Age, administrative cooperation): eur-lex.europa.eu
• Council Implementing Regulation (EU) 2025/518 of 11 March 2025 (VAT in the Digital Age, Implementing Regulation amendments): eur-lex.europa.eu
• Commission Delegated Regulation (EU) 2015/2446 of 28 July 2015 (UCC Delegated Regulation), Article 1(48) (intrinsic value): eur-lex.europa.eu
• European Commission, VAT One Stop Shop portal (OSS, non-Union scheme, IOSS): vat-one-stop-shop.ec.europa.eu
• Directive 2006/112/EC (VAT Directive), consolidated text as at 14 April 2025, including Articles 14a, 59c, 136a, 243a to 243d and the special schemes: EUR-Lex current consolidated version
• European Commission, VAT e-commerce explanatory notes (28 October 2020): taxation-customs.ec.europa.eu

Filing into year six

On 3 September 2026, the Commission reported more than €125 billion collected through the EU e-commerce VAT schemes since July 2021 and said ViDA is expected to build further on those reforms by expanding OSS and introducing a transfer-of-own-goods scheme. For a reporting team the practical horizon is closer. Confirm which scheme each sales channel uses, apply the €10,000 test only where the supplier meets Article 59c’s conditions, test IOSS consignments against the €150 intrinsic-value limit, file the next OSS quarter by the end of the month that follows it, and reconcile the marketplace treatment with any CESOP records that are reportable under Articles 243b and 243c.

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.