By fulfilmentcrowd Since July 2021, the Import One-Stop Shop scheme (or IOSS), has been simplifying VAT collection for non-EU eCommerce businesses selling low-value goods into EU member states. IOSS, however, doesnt remove customs obligations and doesnt protect brands from how individual EU member states are beginning to process low-value inbound shipments. Five years since its introduction, this distinction is set to completely change how retailers ship products into the EU. In this article, fulfilmentcrowd explores the EUs upcoming changes set to hit brands from July 1^st, and five action points retailers should consider ahead of the deadline.

First, a definition

IOSS is the EUs VAT simplification scheme for distance sales of imported goods in consignments that dont exceed ‚¬150. It allows sellers to report and pay import VAT across eligible EU consumer sales through one registration, meaning shoppers get a clean, familiar checkout experience with no unexpected charges. In July 2025, however, the EU Council formally decided on changes to make suppliers more responsible for import VAT on a wider range of low-value eCommerce sales. Perhaps the most discussed change 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. For brands shipping into the EU, July 2026 will introduce a direct cost increase on low-value imports that sits outside of VAT compliance. The question for many brands has shifted from whats changing? to what do I need to do about it? Its not easy to provide an answer that will work for every brand, but there are some action points every retailer can take to understand where their focus should be ahead of 1^st July. Not aware of these changes? Read fulfilmentcrowds previous IOSS article for our blog.

Action 1: Start with your own data, not market reports

Before looking for guidance elsewhere, its vital to assess where your business currently stands. Your brands data will highlight any gaps or problem areas ahead of the upcoming changes, meaning you can identify where you need to invest time or strategy. Some key areas to review include:

• Revenue by country
• Order volume by country
• Growth rate by country
• Conversion rate by country
• Returns rate by country

Many retailers are surprised to discover that they already have demand in some EU territories. With customs changes around the corner, understanding your EU data should be top of your priorities list.

Action 2: Identify areas that could limit growth

Put simply, shipping into the EU is about to become more complex and more expensive. If youve got areas of demand that could be impacted by customs changes, its important to ask yourself:

• Will shipping costs change?
• Will delivery times be impacted?
• How do we avoid customer uncertainty?
• Will returns become more difficult or expensive?

According to fulfilmentcrowd data, 40% of shoppers are deterred by high shipping costs when buying internationally, and 34% are put off by customs fees. If youre forecasting that IOSS changes could impact your costs or customer experience, your EU demand could be at risk. The last thing your customers want is an unexpected cost increase or a new customs charge at checkout. This situation is one that many brands will be facing ahead of July 1^st, meaning a difficult balancing act could be just around the corner.

Action 3: Calculate your new cost-to-serve

Revenue is only half the story. Many retailers know how much revenue a region generates, but fewer know if it costs more to serve than it should. With low-value imports set to incur an extra ‚¬3 per-item customs duty, shipping into the EU is about to impact margin calculations even further. If youre serving multiple territories with higher levels of demand, its worth pulling a country-by-country profitability report that explores:

• Revenue
• Gross margin
• Average consignment value
• Fulfilment costs
• Returns costs
• Customs duties
• Net contribution

With this overview, youll be able to assess your cost-to-serve per region and where IOSS changes set to have the biggest effect.