No, not at the same time. European Commission explanatory notes on the special scheme for small enterprises According to the IOSS, the Import One Stop Shop, and the EU VAT exemption for small enterprises (SME exemption) are mutually exclusive schemes even after 2027. European Commission OSS registration guide says that a taxable person using the SME exemption must opt out of the SME scheme in order to use the IOSS and needs a VAT number in the Member State where he is established to register for the IOSS. The opposite is exactly the same: if you use the SME VAT exemption in another Member State, you cannot register for the IOSS at the same time. The Latvian VID says this directly: these are mutually exclusive, mutually exclusive modes.
Why don't these two schemes fit together?
The reason is to avoid double tax exemption. IOSS allows shipments up to 150 euros to be imported VAT-free, but VAT must be collected at the time of sale and declared through the same IOSS, as explained by European Commission. The Lithuanian VMI has spelled it out even more specifically: using the SME exemption in another Member State condition is that the entrepreneur is not registered in the IOSS special scheme.
Who is IOSS suitable for?
150 euros is actual value limit of the shipment, not a limit on annual turnover, number of orders or total online store sales. IOSS concerns individual shipments coming from a non-EU country to an EU consumer and which are not excise goods. Each shipment is assessed separately.
Is IOSS an OSS of the Union?
No, and this is an important distinction. The Latvian VID explains that The SME exemption and the Union OSS can coexist: an entrepreneur can use the SME exemption in the country of registration or in another exempt country and in parallel declare turnover in countries where the SME exemption does not apply through the Union OSS. However, one and the same jurisdiction cannot be covered by both schemes at the same time. The SME exemption cannot be combined with the IOSS anywhere.
What are the turnover limits in Estonia, Latvia and Lithuania?
Valid everywhere EU annual turnover limit of €100,000, plus the local state threshold: in Estonia 40,000 euros, in Latvia and Lithuania the state's own registration limit. Directive 2006/112/EC Article 284b(3) provides that when the EU annual turnover limit is exceeded, the Member State of establishment must be notified within 15 working days, and according to Article 288a(2), the special cross-border scheme ceases to apply from that moment.
Does July 1, 2028 change the 2027 selection?
Directive (EU) 2025/1539 was adopted on 18 July 2025 and its changes regarding the liability for import VAT under the IOSS will only apply from 1 July 2028. These rules do not change the mutual exclusion of the IOSS and the SME exemption. For an e-commerce store planning in 2027, this means that the choice must be made earlier, not while waiting for the reform.
FAQ
Can IOSS and the EU SME exemption be used at the same time after 2027?
No. According to the explanations of the European Commission and the practice of the Member States, the IOSS (Import One Stop Shop) and the EU SME exemption are mutually exclusive schemes even after 2027. If you use one, you have to give up the other.
Why can't IOSS and the SME exemption be combined?
The reason is to avoid double tax exemption. IOSS allows import shipments of up to 150 euros to be declared VAT-free upon import, but VAT must be collected and declared at the point of sale through IOSS.
Is IOSS an OSS of the Union?
No. IOSS and Union OSS are different schemes. The SME exemption and Union OSS can coexist, but this is not the case for IOSS and the SME exemption.
Will the changes of July 1, 2028 change the 2027 option (IOSS vs. SME exemption)?
Directive (EU) 2025/1539 was adopted on 18 July 2025, but the amendments concerning IOSS will only enter into force on 1 July 2028. They do not change the mutual exclusion between IOSS and the SME exemption.