Guide
IOSS or OSS? Which EU VAT scheme fits your Shopify store
It depends on where the goods leave from and what a consignment is worth. Four store setups, worked through.
The 2021 EU e-commerce VAT package created two “one stop shop” schemes so a seller doesn’t have to register in every country it ships to. They cover different flows, and many Shopify stores need one, some need both, and some need neither.
The Union scheme (OSS)
For goods dispatched from inside the EU to consumers in a different Member State. You charge the destination country’s VAT at checkout and file one quarterly return in your Member State of identification. Also used by non-EU businesses that hold stock in an EU warehouse.
The Import scheme (IOSS)
For goods dispatched from outside the EU to EU consumers in consignments whose intrinsic value is at most €150. You charge destination VAT at checkout, the parcel clears customs without the customer paying at the door, and you file one monthly return. Non-EU sellers generally appoint an EU intermediary. Consignments over €150 fall outside IOSS: import VAT (and duties) are collected at the border.
Four setups
| Store | Ships from | Scheme | Return |
|---|---|---|---|
| German store, EU customers | Germany | OSS (Union) | Quarterly, in Germany |
| German store, Polish 3PL | Poland | OSS (Union) — rows show dispatch from PL | Quarterly, in Germany |
| US store, ships DHL to EU | United States | IOSS for consignments ≤ €150; none for larger ones | Monthly, via intermediary |
| UK store, stock in NL and in GB | Both | OSS for NL-dispatched, IOSS for GB-dispatched ≤ €150 | Both |
What Shopify does and doesn’t do
Shopify charges the right VAT if your tax settings are right: EU VAT registration with OSS turned on, or IOSS registration with your IOSS number, plus the “collect VAT on imports up to €150” setting for non-EU dispatch. It puts the IOSS number on the customs data your carrier needs. What it doesn’t do is produce either return; you have to assemble the per-country, per-rate figures from orders yourself, or use an app.
The €150 test
Intrinsic value means the price of the goods, excluding VAT, and excluding transport and insurance if they are charged separately. A €140 order with €15 shipping is under the ceiling; a €160 order is over it even with free shipping. For stores that price in another currency, the threshold is applied in euro; the Commission publishes the yearly conversion rates, and a period-end ECB rate is the practical approximation most tools use.
Below €10,000: neither
An EU business established in one Member State whose cross-border B2C sales of goods and digital services were under €10,000 in both the current and the previous calendar year may charge its home VAT and skip OSS. Cross the line mid-year and destination VAT applies from that sale. Track it; the number creeps up.
VATquarter produces both returns from your Shopify orders, decides scheme eligibility per order (and tells you why an order was excluded), and tracks the €10,000 threshold.