Difference Between IOSS, OSS and EORI: Which System Applies to Your Business When Selling to Europe?

A complete guide explaining the difference between IOSS, OSS and EORI in EU e-commerce, who actually needs each system, and the 2026 EU customs update.

When sellers, entrepreneurs, and companies established outside the EU start selling to European consumers, they quickly run into three recurring acronyms: IOSS, OSS, and EORI. The real difficulty is rarely each term on its own — it is the common assumption that these are three separate, parallel systems. The regulatory reality is more precise than that.

This guide sets out the actual relationship between the three, and who genuinely needs each one, based on the official sources of the European Commission.

Scope note: the rules described below are EU-wide rules, applied uniformly across all 27 EU Member States, regardless of the seller's or exporter's home country outside the EU — that country does not constitute a separate legal regime here, but simply describes where the seller or exporter is established.

1. The One Stop Shop (OSS) umbrella: legislative origin and its three schemes

OSS is not a separate system running parallel to IOSS — it is the umbrella under which IOSS sits as one of its branches.
The One Stop Shop system entered into force on 1 July 2021, as an expansion of an earlier system known as the Mini One Stop Shop (MOSS), which had applied since 1 January 2015 to a narrower set of services. The expansion was part of the EU’s broader VAT e-commerce reform package.

The expanded OSS comprises three special schemes:

a) The Union scheme

Covers cross-border B2C supplies of goods and services to consumers within the EU. It is available for goods to both EU-established and non-EU established sellers, while for services it is available only to EU-established sellers. The relevant threshold is EUR 10,000 per year, but it applies exclusively to telecommunications, broadcasting and electronic (TBE) services and intra-EU distance sales of goods — it does not cover any other services supplied by an EU-established seller to consumers in another Member State, which are taxed at the customer’s country rate from the first transaction. Below this threshold (for the supplies it actually covers), a seller may continue applying their home country’s VAT rate, and above it they must apply the VAT rate of the customer’s country.

b) The Non-Union scheme

Available only to sellers established outside the EU, and covers services only (not goods) supplied to EU consumers — such as digital, consultancy, or professional services.

c) The Import scheme — commonly known as IOSS

Covers the import of low-value goods (up to EUR 150) from outside the EU directly to the consumer. Given its particular relevance to this guide’s audience (sellers based outside the EU), it is addressed separately below.
The core distinction from EORI: all three schemes above are tax (VAT) schemes, while EORI is a customs system entirely unrelated to VAT. This is the central point of confusion this guide aims to resolve.

2. A closer look at IOSS (the Import scheme)

What is it?

IOSS is the scheme designed to simplify the collection and remittance of VAT on B2C sales of goods imported from outside the EU, provided the intrinsic value of a single consignment does not exceed EUR 150, and excluding goods subject to excise duties (alcohol, tobacco).

How does it work in practice?

Instead of the EU consumer paying VAT (often plus a handling fee) on delivery, the seller collects VAT at the point of sale, then files a single monthly return in one Member State, through which VAT is remitted to all relevant EU countries.

ho needs it?

• Sellers established outside the EU (in any country) shipping goods directly to EU consumers, where the per-consignment value does not exceed EUR 150.
• Online marketplaces, which may be treated as the “deemed supplier” for VAT purposes in certain cases.

Key conditions

• Use of IOSS is voluntary, not mandatory, but not using it means the end consumer bears VAT and handling fees on delivery, which increases parcel refusal rates and harms the customer experience.
• A non-EU established seller must appoint an EU-based intermediary to register for and use IOSS, whereas an EU-established seller can register directly.
• Returns are filed monthly (unlike the other two OSS schemes, which are quarterly).

3. The EORI number: a fully separate customs system

What is it?

EORI stands for Economic Operators Registration and Identification. It is a single customs identification number valid throughout the EU, mandatory for clearing any customs operation: import, export, or transit.

Legal basis

EORI is based on Article 9 of the Union Customs Code (UCC) and Articles 3 to 7 of the UCC Delegated Regulation — that is, its legal foundation is purely customs-related, and entirely separate from the VAT Directive underlying OSS/IOSS.

Who needs it?

• Any economic operator established within the EU customs territory carrying out a customs-relevant activity.
• Economic operators not established in the EU, where they carry out specific customs activities such as lodging a customs declaration or acting as a carrier connected to the customs system.

How is it obtained?

An EORI number is issued free of charge by a single customs authority: the national authority of the Member State where the operator is established, or, for non-established operators, the Member State in which they intend to carry out their first customs operation. The number does not expire, and remains valid unless invalidated on request or upon cessation of the holder’s activity.
The essential takeaway of this section: EORI does not replace IOSS or OSS, and vice versa. A single trader may well need all three, since each serves an entirely different purpose (customs versus tax).

4. Direct comparison table

A precise, source-based breakdown of three terms non-EU sellers keep confusing — and a practical way to work out which ones your business actually needs.

5. Which system applies to your business? Practical scenarios

A seller established outside the EU shipping directly from their home country to EU customers (consignments ≤ EUR 150)

Needs: EORI (for customs clearance) + IOSS via an EU-based intermediary (to simplify VAT).

A seller established outside the EU storing inventory in an EU warehouse (e.g., in Germany, via logistics/fulfilment services)
Their goods are no longer “imported from outside the EU” at the time of sale, since they are already located within EU territory — so IOSS does not apply. They need: EORI (for the initial import into the warehouse) + the Union scheme under OSS (for cross-border EU sales exceeding EUR 10,000/year within the TBE/goods supplies covered by the threshold).

• Accuracy note (1) — Fiscal representative: the requirement to appoint a local fiscal representative to obtain the VAT number needed for Union scheme registration varies by Member State and is not a uniform rule. Germany specifically does not require this — a foreign company may register directly or appoint a fiscal representative only voluntarily, per official confirmation from German Customs (Zoll). By contrast, other Member States such as France, Italy, and Poland do require it, unless the seller’s home country has a mutual assistance agreement with the EU (currently Norway).
• Accuracy note (2) — Domestic sales: this seller’s sales to customers located within the same country as the warehouse (e.g., a German customer buying from a warehouse in Germany) are domestic supplies not covered by the Union scheme, and require separate direct VAT registration in that country.

See our full guide: [What Is EU OSS?].

A seller providing only digital services to EU customers (no goods shipped at all)

Does not need EORI (as they carry out no customs operations), and only needs: the Non-Union scheme under OSS, if established outside the EU.

6. Key update: the 2026 customs changes

As of 1 July 2026, the previous customs duty exemption for consignments not exceeding EUR 150 was abolished and replaced with a temporary flat customs duty of EUR 3 per item, applicable until 1 July 2028, under Council Regulation (EU) 2026/382.
An important distinction not to be confused: this change affected customs duty only, while IOSS remains in place as a separate VAT scheme, unchanged, with its EUR 150 VAT threshold intact. This means a seller today may face two parallel obligations on the same consignment: VAT via IOSS, and the new customs duty under the new regulation.
Because this topic continues to evolve through 2028, we have dedicated a separate, periodically updated article [internal link: The 2026 EU Customs Update — What Actually Changed?] to track developments in detail.

7. Frequently Asked Questions

8. Key Takeaways

• OSS is an umbrella covering three schemes: the Union scheme, the Non-Union scheme, and the Import scheme (IOSS) — it is not a system running parallel to IOSS.
• IOSS applies to goods imported from outside the EU valued at no more than EUR 150 per consignment.
• EORI is a fully separate customs system, with a legal basis entirely distinct from VAT schemes.
• The 2026 regulatory change affected customs duty only, and did not abolish IOSS.
• A single trader may need more than one system simultaneously, depending on their business model.

9. Conclusion

Understanding the precise distinction between IOSS, OSS and EORI is not an academic exercise — it is a practical prerequisite for avoiding shipment delays, unexpected charges for EU customers, and customs or tax non-compliance. The first practical step for any trader targeting the European market is to define their business model precisely (direct shipping / EU-based storage / digital services only) before determining which system actually applies.