Preparing for the 2028 IOSS VAT Changes for Online Sellers

 

 

 

 

 

Key changes in IOSS VAT for 2028

Get ready for the 2028 IOSS VAT changes that will affect online sellers across Europe. This guide outlines the key updates, their impact on your operations, and how you can prepare to stay compliant.

Impacts Overview

Main Effects

Compliance Requirements

  • New registration processes will be needed.
  • Keep track of country-specific VAT rates.
  • Consider updates to your pricing strategy.
  • Prepare for more rigorous reporting requirements.

Preparedness Steps

Get Ready

Stay Informed

  • Train your team on new guidelines.
  • Revisit your supply chain practices.
  • Audit your current VAT process.
  • Update your e-commerce platforms.

Why the 2028 IOSS changes matter for online sellers?

The European Union’s Import One-Stop Shop (IOSS) has been instrumental in simplifying VAT compliance for non-EU businesses selling low-value goods into the EU. However, starting July 2028, significant updates to IOSS regulations will affect how online retailers manage VAT obligations across Europe. For businesses operating cross-border e-commerce, these updates bring both compliance risks and operational opportunities. Early preparation is critical to ensure a smooth transition and maintain uninterrupted access to EU markets.

What is changing in the IOSS framework?

  1. End of the special arrangement scheme

Currently, non-EU sellers using postal operators or couriers to collect VAT at the point of delivery can avoid registering for IOSS. From July 2028, this Special Arrangement Scheme will be abolished. Sellers must either register for IOSS or face potential customs delays and administrative penalties.

  1. Higher compliance requirements for non-IOSS sellers

Businesses that do not register for IOSS will be required to register for VAT in each EU member state where their customers are located. This change dramatically increases compliance costs and complexity, making IOSS registration the more efficient route for most sellers.

  1. Introduction of joint liability for intermediaries

Under the new rules, customs intermediaries may be held jointly liable for unpaid VAT. This change will likely lead intermediaries to impose stricter requirements and charge higher fees, increasing sellers’ operational costs.

  1. Possible adjustment to the €150 threshold

Although not confirmed, the EU may revise or eliminate the €150 low-value goods threshold. If this change proceeds, all imports, regardless of value, may become subject to VAT- further emphasizing the importance of structured VAT compliance strategies.

Who will be affected by these changes?

The upcoming reforms impact:

  • Sellers currently relying on postal services to handle VAT.
  • Businesses exporting goods under €150 to EU customers without an IOSS registration.
  • Companies using customs agents to manage their import VAT processes.

Even though IOSS registration remains optional, it is strongly recommended for businesses that want to reduce administrative burdens and avoid VAT registration in every EU country.

Steps you can take to prepare

  1. Register early for IOSS

Avoid last-minute delays by initiating the registration process well before 2028. This ensures minimal disruption to sales and shipping processes.

  1. Reassess your VAT and logistics setup

Review existing VAT management workflows and intermediary agreements. Ensure they align with upcoming rules-especially around joint liability.

  1. Upgrade digital infrastructure

Ensure your systems can track VAT rates, apply the correct charges based on customer location, and generate compliant invoices and reports.

  1. Plan for administrative and cost impacts

If your business chooses not to register for IOSS, prepare for the additional costs and complexity involved in multi-country VAT registration.

How FZCO accountants can help?

At FZCO Accountants Limited, we support non-EU online sellers in handling VAT compliance efficiently. Our services include:

  • IOSS registration and advisory
  • VAT return filing across multiple EU jurisdictions
  • Guidance on VAT system upgrades and reporting compliance
  • Strategic support for transitioning from the Special Arrangement Scheme

With expertise in cross-border e-commerce taxation, our team ensures your business remains compliant while minimizing operational disruption.

Take action before the deadline

The 2028 IOSS reforms are part of a broader effort by the EU to strengthen VAT enforcement and create a level playing field for all sellers. Businesses that plan ahead will be better positioned to stay compliant, avoid penalties, and retain competitive advantage in the European market.

Do not wait until the changes become mandatory-start evaluating your position now, assess your IOSS eligibility, and make the necessary adjustments to future-proof your operations. If your business sells into the EU and you are unsure how the IOSS changes will affect you, we are here to help.