The European Union’s One-Stop Shop (OSS) VAT schemes continue to simplify cross-border e-commerce, with VAT declarations reaching €38.8 billion in 2025.
As online shopping and cross-border sales continue to expand, VAT compliance remains an important consideration for businesses operating within the European Union. To address the challenges associated with international online transactions, the EU introduced the VAT e-commerce package in July 2021, including the One-Stop Shop (OSS) and Import One-Stop Shop (IOSS) schemes.
These measures aim to simplify VAT reporting, reduce administrative burdens and facilitate compliance for businesses selling goods and services to consumers across different EU Member States.
Significant Increase in VAT Declarations
According to the European Commission’s latest report, a total of €38.8 billion in VAT was declared through the OSS and IOSS schemes during 2025, representing an increase of approximately 17% compared to the €33.1 billion declared in 2024.
The total comprised €27.9 billion under the Union OSS scheme, €3.2 billion under the non-Union OSS scheme and €7.7 billion through the Import One-Stop Shop scheme.
The IOSS scheme recorded particularly strong growth, with VAT declarations increasing by approximately 22% compared to the previous year. This reflects the continued importance of VAT collection on low-value goods imported into the EU through e-commerce.
Since the introduction of these schemes in 2021, approximately €125.45 billion in VAT has been declared through the three systems, highlighting their growing contribution to VAT collection across the European Union.
More Businesses Are Using the OSS Schemes
The number of businesses registered under the OSS and IOSS schemes also continued to increase throughout 2025. By 31 December 2025, more than 193,000 traders were registered across the three schemes.
Registrations under the Union OSS scheme rose from 153,550 in 2024 to 173,630 in 2025. Meanwhile, the non-Union OSS scheme reached 6,076 registrations, while the IOSS scheme recorded 13,733 registered traders.
This continued growth demonstrates the increasing importance of simplified VAT procedures for businesses engaged in cross-border e-commerce.
How Does the OSS System Work?
The OSS system allows eligible businesses to declare and pay VAT on qualifying cross-border business-to-consumer (B2C) sales through a single Member State’s tax administration, rather than having to register separately in each EU Member State where VAT is due on those transactions.
The system can help reduce administrative work and compliance costs, particularly for businesses selling to consumers in several EU countries.
The three schemes serve different purposes:
- Union OSS: Primarily covers eligible intra-EU distance sales of goods and certain qualifying supplies of services to consumers.
- Non-Union OSS: Covers certain B2C services supplied by businesses not established in the EU.
- Import One-Stop Shop (IOSS): Facilitates VAT declaration and payment on eligible distance sales of goods imported into the EU in consignments with an intrinsic value not exceeding €150.
Businesses should assess their activities carefully to determine whether these schemes apply to their particular circumstances.
What Lies Ahead for EU VAT?
The EU’s VAT in the Digital Age (ViDA) package, adopted in 2025, introduces further measures intended to modernise the VAT system and simplify compliance for businesses operating across Member States.
Certain changes affecting the OSS and IOSS schemes are scheduled to take effect from 1 January 2027, while the main Single VAT Registration reforms, including an expansion of the OSS schemes, are scheduled to begin on 1 July 2028.
These changes are expected to further streamline VAT procedures while strengthening cooperation between national tax administrations.
What Should Businesses Do?
Businesses involved in online sales, particularly those selling goods or services to customers in other EU countries, should remain informed about changes to VAT legislation and review their existing VAT procedures.
Understanding the available simplification schemes and ensuring that VAT is correctly reported and paid can help businesses meet their obligations while reducing unnecessary administrative complexity.
Source: European Commission – Report on the Application of the VAT E-Commerce Package, based on 2025 statistics.
We encourage businesses to stay informed about developments in taxation and assess how changes in EU VAT legislation may affect their activities. Contact Joe Cordina & Associates at info@jcordina-andco.com for more information.
