EU VAT 2026: OSS, IOSS and e-commerce obligations for online sellers

Updated: 25 May 2026 — Reviewed by a chartered accountant, Hayot Expertise (Paris).

Since 1 July 2021, the VAT rules applying to B2C online sales into the European Union have been fundamentally overhauled. In 2026, these rules are fully operational and tax administrations across the EU are actively enforcing them. Whether you ship goods from France to EU consumers, import small parcels from outside the EU, or sell through a marketplace, you need to understand which regime applies to you.

Direct answer: once your B2C intra-EU distance sales turnover exceeds €10,000 in a calendar year (single global threshold, Article 259 D of the French Tax Code / Article 59c of Directive 2006/112/EC as amended by Directive 2017/2455), you must apply the VAT of the customer's country. The OSS one-stop shop lets you file a single quarterly return in France. For imports of goods valued at or below €150 from outside the EU, the IOSS is the applicable regime. Below the threshold, French VAT applies by default.

The current framework derives from Directive 2017/2455/EU, which amended the main VAT Directive 2006/112/EC. Key provisions:

• Article 59c (now 59ca): introduces the €10,000 single threshold replacing 28 separate national thresholds.
• Article 14 bis: deems marketplace operators the deemed supplier for certain transactions, making them liable for VAT instead of the underlying seller.
• IOSS provisions: create the Import One Stop Shop for goods imported from third territories with intrinsic value not exceeding €150.

In French law, these rules are transposed primarily in Article 259 D of the Code Général des Impôts (CGI) and related BOFiP administrative doctrine.

The same business can operate under several columns simultaneously. A French SASU selling its own-brand goods on its website and through Amazon, importing some items from China, will typically manage a CA3, an OSS declaration, and an IOSS declaration in parallel.

The threshold is global, cumulated across all Member States, and covers both goods and digital services sold B2C. It is assessed on the current calendar year and on the previous year.

What tax authorities look for: since the DAC7 Directive (EU 2021/514) took effect for data transmitted in 2024, marketplace platforms report seller revenues to national tax authorities. French and German tax administrations can now cross-reference OSS declarations against Amazon or Etsy revenue data. A threshold breach that went unreported is a quantified discrepancy.

Practical points:

• The threshold is crossed on the euro that takes you above €10,000. You must apply destination-country VAT from that sale onward.
• A German sale, a Spanish sale, and ten Polish sales: all cumulate.
• If you exceeded €10,000 in the previous year, you are in OSS territory from 1 January of the current year, without waiting for a new breach.

OSS registration is completed via your professional account on impots.gouv.fr. It takes effect from the first day of the following quarter (or the current quarter if requested before the 10th of the first month of that quarter).

The OSS return is filed in euros and details, by destination Member State, the turnover and VAT collected at the local rate. It does not replace the French CA3 return for domestic transactions.

Practical constraint: the OSS does not allow input VAT recovery in destination countries. If you hold stock in another Member State (e.g. Amazon FBA in Germany), the OSS does not cover sales dispatched from that warehouse — a local German VAT registration is required.

IOSS applies when you dispatch goods from a third territory directly to an EU consumer, with the intrinsic value of the consignment not exceeding €150 (excluding transport and insurance).

1. Register with the tax authority of your chosen Member State (France: DGFiP). You receive a 12-character IOSS number.
2. Collect VAT at the destination country rate at the point of sale (e.g. 20% for a French buyer, 19% for a German buyer, 25% for a Danish buyer).
3. File a monthly return by the last day of the month following the month of sale.
4. Pay the VAT declared in your Member State of identification.
5. Communicate your IOSS number to your carrier so customs authorities can clear the parcel without collecting import VAT on delivery.

Cabinet note: Missing or incorrect IOSS numbers on customs documents are among the most common operational errors in dropshipping businesses. The outcome is predictable: customs collects VAT on delivery, the customer disputes the charge, and the seller issues a refund. At scale, this erodes margins and generates significant back-office work.

Goods excluded from IOSS: consignments above €150 intrinsic value; excise goods (alcohol, tobacco, energy products); means of transport.

Consider a French simplified joint-stock company (SASU) selling fashion accessories online in 2026:

• Total e-commerce turnover: €180,000.
• French B2C sales: €130,000 (covered by CA3).
• B2C sales to consumers in other EU Member States: €50,000 across 12 countries.
• Goods stored and shipped from France (no imports from outside EU).

Obligations that apply:

• The €10,000 threshold was exceeded in the prior year. OSS applies from 1 January.
• CA3 continues to cover domestic sales and input VAT recovery.
• OSS return covers €50,000 in intra-EU sales, broken down by country, at local rates.
• Estimated VAT payable via OSS at an average 20% rate: approximately €8,333 per year, paid quarterly.

What this illustrates: VAT collected via OSS cannot be offset against French input VAT. The two streams are separate. A seller who structured their pricing on the assumption that destination VAT could be offset against French input credits will face a cash shortfall.

Article 14 bis introduced a legal fiction with material consequences. When a marketplace facilitates a qualifying sale, it is deemed to have purchased the goods from the seller and resold them to the end customer. The platform becomes the taxable person for VAT purposes.

Two categories covered:

1. Sales of imported goods from third territories, value ≤ €150, to EU consumers: the marketplace collects and remits VAT via IOSS.
2. Intra-EU sales by a seller not established in the EU, regardless of value: the marketplace is deemed supplier.

Implications for the seller:

• You are no longer liable for VAT on these specific sales.
• You must maintain reconciliation records: which sales were handled by the platform, which remain your responsibility.
• If you sell through multiple channels (marketplace + own website), own-website sales are not covered. Mixing the two in a single VAT position is a control risk.

Both OSS and IOSS require detailed records to be kept for 10 years from the end of the calendar year of the transaction (Implementing Regulation EU 2021/1080). Records must be available on request to the tax authority of any Member State.

Minimum record content:

• Date and amount of each transaction.
• VAT rate and amount applied, by destination country.
• Customer identification where available.
• Transport or dispatch evidence.
• Customs declaration number for IOSS transactions.
• Refunds and corrections.

This obligation is separate from French accounting document retention rules. It applies even if you later deregister from OSS or IOSS.

• €2 per item levy on small parcel imports (1 March 2026): a charge distinct from VAT applies to imports of goods under €150 from third countries. It compounds IOSS VAT and directly affects dropshipping unit economics. Verify current status with official sources.
• DAC7 data matching: platforms report seller revenues from 2024 data onwards. Inconsistencies between platform revenue data and OSS/IOSS filings are now detectable at EU level.
• IOSS threshold at €150: the European Commission had considered removing this threshold. As of the update date of this article, it remains at €150. Monitor official sources for any legislative change.

For further reading, see our articles on different VAT rates on an invoice, VAT reverse charge, and mandatory tax filings in 2026.

This article is intended to inform. It does not replace a personalised review of your business situation, transaction flows, and the rules in force at the time of your reading. EU VAT rules evolve: any threshold, rate or deadline mentioned should be verified against impots.gouv.fr, bofip.impots.gouv.fr, or the European Commission's VAT portal.