VAT: future IOSS expansionEU

EU Council backs plan to remove €150 IOSS limit from July 2028

The Council has backed removing the €150 IOSS ceiling for eligible imported online sales. The planned 1 July 2028 start still depends on formal adoption and IOSS system readiness; today’s eligibility limit remains unchanged.

By Scott GillettPublished 9 Nov 2026Last reviewed 9 Nov 2026Destination: European Union

WHEN IT APPLIESProposed / awaiting confirmation

Who this affects: UK online retailers and marketplaces selling eligible imported goods to EU consumers, especially consignments above the current €150 IOSS ceiling.
Seller action: No immediate general seller change
Keep current checkout eligibility unchanged. Plan with your VAT adviser or IOSS intermediary, marketplace and customs provider; follow final adoption and system readiness before changing higher-value sales.
Effective dates / current position: Council general approach agreed 9 November 2026. Planned application: 1 July 2028, subject to formal adoption and the draft IOSS-readiness fallback. Current €150 eligibility remains in place.
Last reviewed: 9 Nov 2026 — an editorial source check, separate from automatic timing.
Official source: Open the primary source ↗

A planning update, not a change to today’s checkout rules. On 9 November 2026, the EU Council agreed a draft that would remove the €150 IOSS ceiling. Parliament consultation and formal Council adoption remain outstanding. 1 July 2028 is the planned start, with a system-readiness condition.

What is IOSS in plain English?

The Import One-Stop Shop (IOSS) is a way to collect, declare and pay EU VAT on eligible online sales of imported goods through one registration. VAT can be collected from the customer at checkout and reported through the scheme.

Under the current rules, it covers eligible consignments with an intrinsic value not exceeding €150. This is a value test for the consignment, not an annual sales allowance. Goods subject to excise duty are excluded.

What has the Council agreed?

The Council’s general approach backs removing that €150 value ceiling. If the directive is formally adopted and becomes applicable, qualifying higher-value distance sales could also use IOSS. The draft retains the exclusion for goods subject to excise duty.

The package would also remove the corresponding value limit from marketplace “deemed supplier” rules. These are the rules under which a platform accounts for VAT on qualifying sales it facilitates. Sellers should confirm with their marketplace which future sales it would handle.

This is a separate VAT measure from the EU’s customs-duty changes. It is not an announcement that higher-value imports will become tax-free or that IOSS will cover every import charge.

Illustration of an online checkout marked VAT, a parcel and a 2028 calendar, with an arrow passing a broken limit line

Is 1 July 2028 guaranteed?

No. The Council’s announcement still lists European Parliament consultation followed by formal Council adoption. The eight-page compromise is labelled a draft directive and general approach.

Article 2 gives 1 July 2028 as the planned application date. It also includes a fallback: if the relevant IOSS functionality is not operational by 1 June 2028, application would move to the date on which the specified customs transitional solution ends.

That means the final legislation and the operational timetable both need checking. The announcement is not permission to start using IOSS above €150 now, and this article does not assign a replacement date if the fallback is triggered.

A simple example

A UK retailer sells an eligible non-excise product to an EU consumer in a consignment with an intrinsic value of €200. Today, that consignment exceeds the IOSS ceiling. The retailer must use the appropriate existing VAT and customs arrangements.

The agreed expansion could make IOSS available for that higher-value sale once the new rules actually apply. It would simplify the VAT route; it would not by itself remove customs duty, handling charges or product-compliance requirements.

What should UK ecommerce businesses do?

Keep the current €150 limit in your live processes. Do not change checkout eligibility because an agreement has been announced.
Identify affected orders. Check how often EU consignments exceed €150 and how VAT is currently handled.
Discuss the future route. Ask your VAT adviser or IOSS intermediary, marketplace and customs provider what changes they would need for higher-value sales.
Keep VAT and customs costs separate. A wider VAT scheme does not settle every duty, fee or clearance requirement.
Follow final adoption and system readiness. Treat July 2028 as a planning date until the legal and operational conditions are confirmed.

How does this relate to the €3 customs duty?

IOSS concerns VAT. Our EU low-value customs-duty briefing explains the separate temporary €3 duty. The EU handling-fee article covers another separate charge. Do not use a change to one rule as evidence that the others have disappeared.

Official sources

This briefing distinguishes the current rules from an agreed draft. Confirm the final legislation and the arrangements applying to your business before changing VAT or customs processes.

Updates to this article

9 November 2026
First published after checking the Council’s 9 November general approach, complete eight-page compromise including the IOSS value-cap amendment and readiness fallback, and current Commission IOSS guidance. Distinguished the agreed draft and planned July 2028 date from formal adoption and current eligibility; no automatic activation scheduled.

Recorded editorial changes. Automatic timing labels do not change the publication or review dates.