IOSS to cover imported goods above EUR 150 from 2028: Ecofin reaches agreement

Since 1 July 2021, the import VAT exemption for low-value consignments has been abolished. VAT has therefore generally been due on imports of goods into the EU, irrespective of their value. Under IOSS, online retailers and platforms selling goods from outside the EU to EU consumers can charge VAT at checkout and declare and pay it through one Member State. Currently, this simplification is available only for consignments with an intrinsic value not exceeding EUR 150.

Under the agreement, IOSS will be extended from 2028 to distance sales of imported goods regardless of the value of the consignment. For example, an online retailer selling a device worth EUR 500 from China to a Belgian consumer would be able to charge Belgian VAT on the sale and declare it through IOSS. It is currently not possible to use IOSS for such a consignment. Goods subject to excise duty will remain excluded from the scheme.

VAT is already due on these transactions. What will change is how that VAT is collected and reported. Where IOSS is used, the consumer pays VAT at checkout and the importation is exempt from VAT, provided the applicable conditions are met. Any customs duties remain payable separately.

A second change concerns goods brought into the EU in bulk and sold to individual consumers only at a later stage. Under the new rules, sales from special customs warehouses for distance sales may also qualify for IOSS.

For example, an online retailer could bring goods from China into a special customs warehouse in Belgium. The goods would remain under customs supervision until a consumer places an order. The retailer could then charge VAT on the sale and report it through IOSS. The goods would subsequently be released in accordance with the applicable customs rules and delivered to the consumer.

This option will not be available for every customs warehouse or for ordinary stock that has already been released for free circulation in the EU. It specifically concerns the customs warehouses for distance sales referred to in Article 145 of Regulation (EU) 2026/2108.

Only importers for distance sales who use IOSS and hold Trust and Check trader status, or their indirect representatives holding that status, may obtain authorisation for such a warehouse. The goods must also be packed in collective packaging containing similar goods and must not yet have been prepared as individual consignments when the sale is concluded. All other statutory conditions must also be met.

Businesses holding stock in the EU will therefore still need to determine where the goods are located and which customs procedure applies to them. IOSS will not become a general substitute for local VAT registrations.

Online platforms facilitating certain distance sales of imported goods are already treated as deemed suppliers for VAT purposes where the consignment does not exceed EUR 150. This means that, for VAT purposes, the platform is deemed to have received and supplied the goods to the consumer itself.

The agreement removes that value threshold. Platforms facilitating such sales will therefore also be treated as deemed suppliers for imported consignments above EUR 150. In these cases, they will have to charge, declare and remit the VAT themselves.

For example, a consumer might order a device worth EUR 500 from a seller outside the EU through an online marketplace. Under the new rules, the platform will be deemed, for VAT purposes, to have received and supplied the device itself, even if the foreign seller ships it directly to the consumer. The platform will then be required to account for the VAT on the sale to the consumer.

The rules apply to platforms that facilitate sales between sellers and consumers. Websites that merely advertise products or redirect customers to other online retailers, without further involvement in the supply, are not covered.

The agreement also strengthens the checks on IOSS intermediaries. Where an intermediary acts for a seller established in a third country that has no mutual assistance agreement with the EU, the Member State of identification must assess whether the intermediary has sufficient administrative capacity, financial solvency and reliability.

The European Commission must submit a proposal specifying the criteria to be met by these intermediaries by 31 December 2027. The Council must then adopt those criteria unanimously.

The EUR 150 threshold also played a role under customs law, but this is a separate regime. The relief from import duties for consignments with an intrinsic value not exceeding EUR 150 was abolished on 1 July 2026.

During the transitional period until 1 July 2028, a temporary customs duty of EUR 3 per category of goods according to tariff classification, irrespective of the number of units, applies to the relevant distance sales of imported goods in low-value consignments. For example, EUR 3 is payable on a consignment containing five identical T-shirts, whereas a consignment containing a T-shirt and a watch attracts EUR 6 in import duties. The measure is subject to specific conditions and exceptions, including for certain goods of preferential origin.

The normal customs tariff rates are scheduled to apply from 1 July 2028.

The Ecofin agreement of 9 November 2026 concerns the VAT rules for IOSS. The abolition of the import duty relief was dealt with separately. The fact that an online retailer will be able to declare VAT on an imported product worth, for example, EUR 500 through IOSS does not mean that no import duties will be payable.

Council Directive (EU) 2025/1539 is also relevant alongside the new agreement. That Directive was adopted on 18 July 2025 and will change the rules on the payment of import VAT where IOSS is not used from 1 July 2028.

Currently, consumers often pay import VAT themselves on such distance sales. From 1 July 2028, the supplier, or the online platform acting as a deemed supplier, will generally be liable for import VAT on sales that are eligible for IOSS.

The supplier or platform will also have to account for VAT on the sale to the consumer in the Member State of destination.

This may require VAT registrations in several Member States. Certain businesses established outside the EU will also have to appoint a fiscal representative.

These rules apply to sales falling within the scope of IOSS even where the seller chooses not to use it. If the EUR 150 value threshold is definitively removed as proposed, the new obligations will consequently also apply to consignments above that amount.

The extension will therefore make IOSS more attractive to businesses selling directly from third countries to EU consumers and seeking to avoid local VAT registrations.

The IOSS extension is scheduled to apply from 1 July 2028, alongside the launch of the relevant functions of the EU Customs Data Hub, the new European system for exchanging customs data.

The draft nevertheless provides for a postponement if the required functions are not operational by 1 June 2028. In that case, the application date would be deferred until the end of the envisaged temporary customs solution.

The political agreement of 9 November 2026 does not mean that the Directive has been definitively adopted. The European Parliament must be consulted again, after which the Council can formally adopt the text. Under the draft, Member States must publish their transposition measures by 30 June 2028.

For businesses selling goods directly from third countries to EU consumers, the IOSS extension could considerably simplify VAT reporting. They will also be able to declare and pay VAT on consignments above EUR 150 through one Member State, without having to register separately in every Member State of destination for those sales.

For online platforms, the main change is that they will have to charge and remit VAT on more sales. They will need to adapt their systems so that the correct VAT is also calculated and reported for imported consignments above EUR 150.

Businesses that do not use IOSS will need to take account of the stricter import VAT rules from 2028 and the potential requirement to register for VAT in several Member States.