VAT OSS Schemes in 2026: Union OSS, IOSS and How They Work

VAT OSS schemes help online sellers simplify VAT reporting for certain cross-border sales in the EU. In this guide, we explain the main VAT OSS schemes in 2026, including the Union OSS and IOSS, who can use them, what they cover, and when local VAT registrations are still required.

Need help choosing the right VAT OSS scheme for your business? hellotax can review your sales flows, storage countries, and VAT registration setup. Contact our VAT experts.

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Why VAT OSS Schemes Matter

VAT OSS schemes can reduce the need for multiple local VAT registrations when sellers make eligible cross-border B2C sales within the EU. Instead of filing separate VAT returns in every customer country, sellers can often report those sales through a single OSS return in one Member State. However, OSS does not replace local VAT registrations in countries where goods are stored or domestic supplies take place.

If you store goods in several EU countries, our guide to EU VAT Thresholds and Multi-Country Storage explains why OSS does not replace local VAT registrations in stock countries.

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Key Benefits of VAT OSS schemes

1. Single VAT Registration
   If your annual cross-border B2C sales remain below €10,000, the home-country simplification may still apply, provided the other conditions are met. Once the threshold is exceeded, VAT is generally due in the customer’s country. In practice, many sellers use OSS to report those sales, although local registrations may still be needed in stock countries.
2. Quarterly VAT Returns
   File once every quarter for all applicable sales in the EU, which cuts down paperwork significantly.

Ready to simplify your VAT reporting? Schedule a free consultation with hellotax and discover how our automated solutions can streamline your OSS registration and VAT returns.

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Changes for EU-Based Online Sellers

EU E-Commerce VAT Package

• Lower Distance Selling Threshold
  Since July 1, 2021, the threshold across the EU is €10,000 for B2C supplies. Surpassing this amount means VAT must be accounted for in the respective country of delivery—or through the OSS.
• Single OSS Registration
  Register for OSS in one EU country to handle VAT for all your cross-border B2C transactions where you don’t store goods.
• Storage Requirements
  Keep in mind that if you store products in multiple EU countries (e.g., Amazon FBA warehouses), you will still need VAT registrations in those countries.

Looking ahead: The VAT OSS schemes are expected to cover even more types of supplies by 2027, including energy-related transactions. Staying updated now will prepare you for these imminent changes.

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Implications for Non-EU Sellers

Non-EU sellers can also benefit from VAT OSS schemes, but the correct route depends on how goods are sold and where they are stored. If goods are imported from outside the EU and the consignment value does not exceed €150, IOSS may be available.

If goods are stored within the EU, local VAT registrations are still commonly required in the stock countries, even if OSS is used for eligible cross-border B2C sales. Sellers using marketplaces must also check whether deemed supplier rules apply to specific transactions.

If your business is based outside the EU, our guide to EU VAT Registration for Non-EU Businesses explains when local VAT numbers are still required alongside OSS.

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Overview of VAT OSS Schemes

Union OSS

The Union OSS is generally used for eligible cross-border B2C sales of goods within the EU and certain B2C services. It allows sellers to file one quarterly OSS return instead of registering in every customer country for those eligible sales.

IOSS

The Import One Stop Shop (IOSS) is designed for eligible distance sales of imported goods in consignments not exceeding €150. VAT is collected at the point of sale and reported through a monthly IOSS return.

Local VAT registration still matters

Neither Union OSS nor IOSS replaces local VAT registration where stock is stored or domestic sales arise. For many online sellers, the real setup is a mix of local VAT registrations plus one OSS scheme for eligible cross-border transactions.

Not sure whether Union OSS, IOSS, or local VAT registration is the right mix for your setup? hellotax can review your stock locations, imports, and transaction flows. Speak to our team here.

How to Register for the OSS

Registration for a VAT OSS scheme is made through the tax portal of the Member State where the business is eligible to use that scheme. The exact registration process depends on the country, but sellers generally need tax portal access, business identification details, and a clear understanding of which transactions will be reported through OSS. Registration should be completed before the relevant reporting period begins.

Pro Tip: to benefit from VAT OSS Schemes work with a professional tax advisor or use an automated service like hellotax to ensure a smooth registration process and ongoing compliance.

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Compliance and Record-Keeping

• Detailed Transaction Records: Tax authorities may audit your OSS transactions. Accurate documentation safeguards you against fines and retroactive VAT claims.
• OSS-Specific VAT Number: Use this identifier for all cross-border B2C sales (unless you store goods in other EU countries where separate VAT registrations are still mandatory).
• Regular Audits: The OSS system simplifies reporting, but you must adhere to each member state’s VAT rates and rules.

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Best Practices for OSS Compliance

1. Monitor Sales Thresholds
   Once you pass €10,000 in cross-border sales, use the OSS or register for local VAT in the destination country.
2. Engage Experts
   VAT rules can change quickly. A trusted partner can help you adapt and avoid costly errors.
3. Automate Where Possible
   Rely on modern tools to track inventory, manage invoicing, and file VAT returns accurately.

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Common Challenges and Solutions

• Complex Registration Processes: Centralized OSS reporting reduces the need for multiple registrations, saving you time and resources.
• Evolving Regulations: The VAT in the Digital Age initiative and potential single EU VAT registration may bring even more changes. Stay informed to maintain compliance.
• Record-Keeping Overload: Use integrated systems to keep track of all EU transactions and store data securely for potential audits.

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Looking Ahead: Potential Developments in VAT Regulation

2026 update: future changes under ViDA

The EU’s VAT in the Digital Age (ViDA) package was adopted on 11 March 2025 and is being rolled out progressively until 2035. From 1 January 2027, clarifications affecting OSS and IOSS users will apply. From 1 July 2028, broader Single VAT Registration reforms and further OSS extensions will begin. Sellers should therefore keep their current OSS setup compliant while preparing for future changes.

For further information, please, refer to this article on VIDA.

Frequently Asked Questions

What are VAT OSS schemes?
VAT OSS schemes are EU VAT simplification schemes that allow certain cross-border sales to be reported through a single portal instead of multiple local registrations.

What is the difference between Union OSS and IOSS?
Union OSS is generally used for eligible intra-EU B2C sales, while IOSS is designed for eligible imported consignments not exceeding €150.

Does OSS replace local VAT registration?
No. OSS can simplify reporting for eligible cross-border B2C sales, but local VAT registration is still commonly required where goods are stored or domestic sales arise.

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Conclusion: Secure Your Business for the future with VAT OSS schemes

VAT OSS Schemes offer a powerful way to simplify and centralize your EU VAT obligations. With streamlined reporting, improved cash flow, and fewer administrative hassles, you can focus on growing your e-commerce business.

Don’t wait until the last minute. Embracing OSS—and staying informed about upcoming changes—will help you remain compliant, cut costs, and stay competitive in an ever-changing market.

Get started with hellotax today and future-proof your VAT compliance. Our expert team and automated tools will ensure you never miss a deadline or regulatory update!

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Additional Resources on VAT OSS Schemes

• European Commission – VAT OSS Guidelines
• Full VAT compliance list for online sellers

Focus on these strategies now to position your online store for success in 2025 and beyond. By optimizing your VAT compliance with the OSS, you’ll be fully prepared for whatever regulatory changes come your way.

If you want to simplify VAT OSS schemes without missing local VAT obligations, hellotax can help you choose the right reporting structure and keep your registrations and filings aligned. Contact our VAT experts.