By fulfilmentcrowd

Since Brexit, the Import One-Stop Shop scheme – commonly referred to as IOSS – has made cross-border EU commerce feel cleaner for non-EU brands.

Introduced by the EU in July 2021, IOSS was designed to simplify VAT collection for eCommerce businesses selling low-value goods into member states.

Upcoming changes, however, have forced retailers to reassess whether shipping individual parcels into Europe remains the most effective business model.

Before exploring the alternative to cross-border shipping, let’s start with a definition.

What is IOSS?

IOSS is the EU’s VAT simplification scheme for distance sales of imported goods in consignments that don’t exceed €150. It allows sellers to report and pay import VAT across all eligible EU consumer sales through one registration, rather than separate VAT processes by country.

Instead of registering for VAT in multiple EU nations, retailers can use a single IOSS registration to collect VAT from the customer at checkout and remit it centrally. When it works well, shoppers get a clean, familiar checkout experience with no unexpected charges on delivery.

But it’s important to remember that IOSS is a VAT mechanism, not a full customs simplification solution. It doesn’t remove customs obligations, and it doesn’t protect brands from how individual EU members states are beginning to process inbound low-value shipments.

This distinction is why brands are reconsidering cross-border models, especially with some important changes on the horizon.

fulfilmentcrowd Director of Client Services Chris White discusses IOSS and the upcoming EU clearance changes. Interview recorded on 16/03/2026.

What’s changed – or changing?

Some significant announcements have made many brands pay closer attention to IOSS.

1. EU has tightened its VAT rules

In July 2025, the EU Council formally adopted changes to make suppliers more responsible for import VAT on a wider range of low-value eCommerce sales.

Their goal here was to close VAT collection gaps and encourage greater adoption of IOSS. From the EU’s perspective, it’s looking for sellers to be accountable for VAT at the point of sale – and it’s building the foundation to enforce it.

2. Customs duty on low-value parcels is ending

Perhaps the most talked-about change in the eCommerce space is the removal of the customs duty exemption for parcels valued below €150. The EU has agreed to introduce a temporary €3 per-item customs duty from July 2026, while broader customs reform infrastructure – including the EU Customs Data Hub (2028) – is built.

This change will end a long-standing structural advantage that made shipping low-value goods into the EU commercially attractive. And, for brands that have based their EU operation on this structure, July 2026 will bring a direct cost increase that sits outside of VAT compliance.

3. Member states are already introducing changes

Before the EU-wide changes are fully introduced, individual member states have already enforced their own fees and clearance rules.

It’s worth noting that Italy had previously introduced a €2 handling fee on non-EU shipments valued at €150 or less, but this has since been suspended as the Italian government shifts to align with the future customs solution set by the EU.

With these changes bring debates surrounding how each country applies their handling fees; whether to use simplified or full declarations for low-value goods, whether to apply fees on entry into a country regardless of destination or only to the destination country, and whether to apply fees per HS code or per parcel.

One thing for sure is this: each of these distinctions will change the landed cost calculations for brands shipping into specific markets.

What was once a blanket solution has the potential to change into an operational headache for brands selling into multiple EU member states.