IOSS, EORI, and VAT: A Simple Guide for Non-EU Sellers Shipping to Europe
Publication Date: May 25, 2026
Read Time: 7 minutes
Target Audience: Non-EU e-commerce brands and B2B exporters shipping to Europe (US, UK, Vietnam, Canada, Australia…)
Introduction
If you ship goods from outside the European Union to European customers, you have likely encountered three acronyms: IOSS, EORI, and VAT.
These are not optional extras. They form the core compliance framework for cross-border e-commerce to Europe. Get them wrong, and your parcels get held at customs, your customers receive surprise bills, and your retention rates drop.
With ongoing EU customs reforms, including reforms expected to affect low-value imports, businesses are placing greater emphasis on customs data quality and compliant delivery models. This guide explains what each term means, when you actually need them, and how to structure your shipping workflow without the unnecessary complexity.
VAT: The Tax You Cannot Avoid
Value Added Tax (VAT) is a consumption tax applied to most goods sold within the European Union. Rates vary by country, typically ranging from 17% in Luxembourg to 27% in Hungary, with the European average sitting around 21%.
For cross-border e-commerce, VAT is due on all commercial shipments entering the EU. There is no longer a permanent tax exemption for low-value parcels.
Who ends up paying that tax depends entirely on your shipping terms and the specific customs framework you utilize:
- IOSS Framework: IOSS is frequently used to support DDP-style consumer deliveries for consignments not exceeding €150, allowing VAT to be collected at checkout rather than upon delivery.
- Alternative DDP Setup: For shipments that fall outside the IOSS framework, VAT may be accounted for through alternative customs and brokerage arrangements, depending on the specific supply chain structure—for example via deferred VAT accounting through a customs broker, where available.
- DAP: Import VAT and related clearance costs are typically collected from the customer before or during delivery.
Why this matters for your brand
If your customer has to pay VAT under DAP terms, they will also be hit with a carrier handling fee, which is typically €10 to €20 and, as we explain in our guide to DAP vs DDP, that turns a simple €30 order into a €55 surprise. Many consumers will simply refuse the delivery. When that happens, you lose the sale, the international shipping cost, and the customer.
By collecting VAT at checkout using a compliant pre-paid framework, your customer avoids unexpected charges during the delivery process. The experience is seamless, just like domestic e-commerce.
IOSS: The Import One-Stop Shop
The Import One-Stop Shop (IOSS) is a VAT collection and reporting scheme designed for non-EU sellers. It allows you to collect, declare, and pay VAT on low-value B2C shipments under €150 through a single monthly return, utilizing one EU-based intermediary.
Do you need it?
For low-value B2C shipments under €150, IOSS is one of the most commonly used mechanisms to facilitate a smooth customer experience. Without it, your customer faces those unexpected handling fees during the delivery process.
However, IOSS does not apply to B2B shipments or orders above €150. For those higher-value shipments, you must rely on different mechanisms, such as broker accounting or the customer’s own VAT number.
How to get an IOSS number
Non-EU businesses cannot register for IOSS directly. You must appoint an EU-based IOSS intermediary to register and file on your behalf. Intermediaries typically charge a setup fee alongside a fixed monthly fee or a small percentage of the VAT collected.
How IOSS works in practice
- You calculate the destination country’s VAT rate at checkout and add it to the order total.
- You remit that collected VAT to your IOSS intermediary on a monthly basis.
- Your intermediary files one consolidated return to the EU tax authorities.
- You display your IOSS number clearly on your commercial invoices, allowing customs authorities to identify the shipment as VAT collected under the IOSS framework.
What IOSS does NOT do
It is important to remember that IOSS does not cover customs duties, nor does it apply to orders over €150 or excise goods like alcohol and tobacco. It also does not replace the absolute need for correct HS codes and detailed commercial invoices.
EORI: Economic Operators Registration and Identification
An EORI number is a unique identifier used by EU customs authorities to track shipments and identify importers. Businesses involved in customs declarations within the EU customs territory typically require an EORI number.
Do you need your own EORI?
Whether a non-EU seller requires its own EORI depends on the customs structure, the parties involved, and the member state through which goods enter the EU.
Example: If your Belgian relay hub’s customs broker clears your bulk DDP shipment under their EORI, you may not need your own. Confirm this with your logistics partner before shipping.
For B2B shipments, EORI requirements follow different rules. If you are clearing larger shipments through a customs broker under a bulk DDP model, the broker will typically use their own EORI or yours, depending on the specific arrangement.
If you ever do need to apply for an EORI, the process is handled through the customs authority of the EU country where your IOSS intermediary or logistics partner is based.
Three Common Shipping Scenarios
1. B2C E-commerce under €150 (Subscription boxes & small webshop orders)
- VAT: Collected at checkout via IOSS.
- EORI: Dependent on specific shipping and broker setup.
- Shipping Terms: Managed under DDP-style arrangements.
- Customer Experience: Seamless, with no surprise fees during delivery.
2. B2C E-commerce over €150 (High-value goods or extended subscription bundles)
- VAT: Paid via broker accounting or collected from the customer.
- IOSS: Not applicable due to the €150 limit.
- EORI: Handled according to the broker setup.
- Shipping Terms: Alternative DDP arrangements via broker, or DAP.
- Customer Experience: Risk of delivery delays and manual customs processing if not structured correctly.
3. B2B Shipments (Wholesale and retail stock)
- VAT: Handled via reverse charge or deferred payment by the buyer, depending on the structure.
- IOSS: Not applicable.
- EORI: B2B supply chains typically require one or more EORI registrations among the parties involved, depending on the customs structure and importer arrangement.
- Shipping Terms: DDP or DAP, depending on your commercial agreement.
Four Common Compliance Mistakes to Avoid
- Promising DDP without the right customs setup: If duties and taxes are not properly accounted for through IOSS, brokerage arrangements, or other compliant import mechanisms, shipments may face delays or additional customs intervention.
- Incorrect IOSS data on invoices: Missing, hidden, or mistyped IOSS data can result in customs delays, additional checks, or declaration rejection. This information must also be transmitted correctly within the electronic customs data accompanying the shipment.
- Using IOSS for orders over €150: Attempting to use IOSS for consignments that exceed the applicable threshold may result in customs delays, declaration rejection, or corrective action by customs authorities.
- Confusing EORI with IOSS: EORI identifies the party involved in the customs declaration, while IOSS declares that the consumer VAT has been pre-paid. They are completely different tools.
How Kontor of Bruges Optimizes Your European Distribution
When you route your EU shipments through our Belgian relay hub, we help you navigate these compliance frameworks smoothly without adding operational friction.
By utilizing a bulk-to-parcel relay model, you can ship your orders consolidated on a single pallet to our hub under your own DDP arrangement, with import VAT, duties, and customs formalities managed before the shipment reaches our facility.
What we do:
- Pre-clearance data check: We review your commercial data, HS codes, and address formatting before your pallet leaves the UK, flagging potential data triggers early.
- Last-mile injection: Once the cleared pallet arrives at our Belgian hub, we split the consignment, apply individual local carrier labels, and inject them directly into the European network via DHL eCommerce.
- A seamless local experience: Your customers receive their boxes quickly with full track-and-trace visibility and no import charges collected upon delivery.
We do not operate as a traditional, slow-moving storage warehouse, and we do not act as your Importer of Record. Every box already has a final destination when it arrives at our hub, allowing us to keep transit times fast and significantly reduce costs compared to shipping individual parcels internationally.
Ready to prepare your shipping flow for long-term EU compliance?
- Learn more about our Subscription Boxes & Batch Services.
- Discover how our Individual Order Relay works.
If you want to set up a test pallet or discuss your current setup, get in touch with our team today.