EU E-Commerce VAT Rules Generate More Than €125 Billion in Five Years
On the 3rd September, the European Commission published new information on the operation of the EU’s VAT e-commerce rules, highlighting the continued growth of the One Stop Shop (OSS) and Import One Stop Shop (IOSS) systems.
While there has been no major new EU-wide VAT legislative package announced in the past week beyond the ongoing VAT in the Digital Age (ViDA) programme, the latest Commission figures provide important insight into the direction of EU VAT compliance, particularly for businesses engaged in cross-border e-commerce.
More than €125 billion in VAT collected through e-commerce schemes
The European Commission’s latest review of the EU VAT rules for e-commerce covers the first five years since the reforms took effect in July 2021.
The Commission reports that more than €125 billion of VAT has been collected through the EU’s e-commerce VAT schemes since their introduction. In 2025 alone, businesses declared more than €38 billion of VAT, representing an increase of approximately 17% compared with 2024.
The number of businesses using the simplified VAT arrangements has also continued to grow. By the end of 2025, approximately 193,000 businesses were registered to use the relevant schemes across the EU.
The figures demonstrate that OSS and IOSS have become an increasingly important part of the EU’s VAT compliance framework for cross-border online B2C sales.
OSS and IOSS schemes continue to grow
The continued growth of OSS and IOSS is significant because these regimes allow businesses to simplify their VAT compliance when selling across EU borders.
The OSS allows businesses to declare and pay VAT due on certain cross-border B2C supplies through a single Member State rather than registering for VAT separately in every EU country in which their customers are located.
The IOSS provides a similar simplification for certain low-value goods imported from outside the EU and sold to EU consumers.
The Commission’s latest figures indicate that these mechanisms are becoming increasingly embedded in the EU VAT system.
The Impact of the €3 Customs Duty on E-Commerce
E-commerce businesses and consumers should also now be aware of a related development that took effect on 1st July 2026.
The EU introduced a temporary €3 customs duty per commodity code on certain low-value consignments entering the EU. The measure applies to qualifying consignments with an intrinsic value below €150 and represents a significant change from the previous customs treatment of low-value imports.
The practical impact of these changes can already be seen in everyday transactions.
I was recently sent a certificate from the UK with a value of less than €10. However, when the package arrived, I was charged a €3 customs fee, together with a €6.95 postal handling fee.
This meant that the additional charges totalled almost €10, effectively exceeding the value of the item itself.
While the €3 customs charge reflects the new rules affecting certain low-value consignments entering the EU, the additional postal handling fee highlights another important consideration for consumers and particularly businesses. Even relatively low-value items sent from outside the EU can result in significant additional costs once customs and carrier charges are taken into account.
The customs duty may be relatively small in isolation, but additional carrier or postal charges can have a much greater impact on the final cost to the customer.
For e-commerce businesses, this is particularly important. A product advertised at a low price can become significantly more expensive by the time customs, VAT and handling charges have been taken into account.
This can create a poor customer experience and potentially lead to complaints, refused deliveries, refunds or lost future sales.
Businesses should therefore consider not only their own VAT and customs obligations but also how those costs will ultimately affect the customer.
What businesses should do now
The latest developments suggest that businesses selling across EU borders should review their VAT processes rather than waiting for the next major ViDA deadline.
In particular, businesses should consider:
- whether their OSS/IOSS registrations remain appropriate;
- whether VAT is being correctly charged based on the customer’s location;
- whether their systems distinguish VAT from customs duties on imported goods;
- whether their accounting and invoicing systems can support increasing digital reporting requirements in regards to B2B sales;
- whether cross-border transactions are being correctly classified as B2B or B2C; and
- whether their VAT processes can accommodate future ViDA requirements.
For businesses selling goods online from outside the EU, the interaction between IOSS, VAT and the new low-value customs duty deserves particular attention.
The issue is not simply one of technical compliance. Businesses also need to consider whether customers have a clear understanding of the total cost of their purchase before completing the transaction.
Conclusion
The latest EU VAT news is less about a new VAT law and more about the continued evolution of the EU’s VAT compliance framework.
The Commission’s latest figures show that OSS and IOSS are being adopted on a substantial scale, with more than €125 billion of VAT collected through the e-commerce schemes since 2021 and €38 billion declared in 2025 alone.
For businesses, the message is clear that cross-border VAT compliance in general is becoming increasingly digital, centralised and data-driven.
While ViDA remains the major long-term reform, businesses should not overlook the practical changes already affecting e-commerce imports, IOSS and customs duties in 2026.
Businesses operating across EU borders should therefore use the current period to review their VAT registrations, transaction flows, systems and reporting processes ahead of the next stages of EU VAT reform.