Can You Combine IOSS and the EU SME VAT Exemption?

No, you can’t run both at once. According to the European Commission’s explanatory notes on the SME VAT scheme, the Import One Stop Shop, or IOSS, is the EU’s simplified system for collecting VAT on low-value goods shipped in from outside the EU, and it remains mutually exclusive with the EU’s small business VAT exemption (the SME exemption) even after 2027. The European Commission’s OSS registration guide spells it out: a taxable person using the SME exemption has to give it up before registering for IOSS, and IOSS registration requires the VAT number issued by the member state where the business is established. The reverse applies just as strictly. If you’re using the SME exemption in another member state, you can’t register for IOSS at the same time. Latvia’s tax authority, the VID, says it just as plainly: the two are savstarpēji izslēdzoši, meaning mutually exclusive regimes, full stop.

Why can’t these two schemes work together?

The reason is straightforward: avoiding double exemption. IOSS lets parcels worth up to €150 enter the EU without import VAT being charged at the border, but VAT still has to be collected at the point of sale and declared through that same IOSS return, as the European Commission explains. Lithuania’s tax authority, the VMI, spells out the mechanics even more directly: one condition for using the SME exemption in another member state is that the business must not be registered under the IOSS special scheme. Run both together and either the goods slip through without VAT being charged anywhere, or the tax authorities lose track of who actually owes it. That’s exactly what these rules are designed to stop.

Who is IOSS actually for?

€150 is the threshold on a shipment’s actual value, not your annual turnover, your order count, or your webshop’s total sales. IOSS is assessed parcel by parcel: every shipment sent from outside the EU to an EU consumer is looked at on its own, and it only covers goods that aren’t subject to excise duty. A shop shipping a few hundred €40 orders a month from a supplier outside the EU sits squarely inside the scheme. A single €400 order doesn’t qualify; that parcel falls outside IOSS no matter how the rest of the shop’s sales are taxed.

Is IOSS the same as the Union OSS?

No, and that distinction matters. Latvia’s VID explains that the SME exemption and the Union OSS can sit side by side: a business can use the SME exemption in its home country, or in another country offering the exemption, while at the same time declaring turnover through the Union OSS (a separate simplified VAT return for cross-border EU sales) for countries where the exemption doesn’t apply. What you can’t do is cover the same jurisdiction with both schemes at once. And IOSS can’t be paired with the SME exemption anywhere, in any country, under any circumstances.

What are the turnover thresholds in Estonia, Latvia and Lithuania?

All three countries operate under the same EU-wide annual turnover ceiling of €100,000, on top of which each country applies its own national registration threshold: €40,000 in Estonia, and Latvia’s and Lithuania’s own respective limits. Under Article 284b(3) of Directive 2006/112/EC, once a business goes over the EU-wide ceiling it has 15 working days to notify its home member state, and under Article 288a(2) the cross-border SME scheme stops applying from that exact point, not from the end of the quarter, not from the next filing period.

Does 1 July 2028 change the 2027 decision?

Directive (EU) 2025/1539 was adopted on 18 July 2025, but its changes to who’s liable for IOSS import VAT don’t take effect until 1 July 2028. None of that touches the mutual exclusivity between IOSS and the SME exemption; that rule stays exactly as it is, before and after. For a webshop building its setup for 2027, the practical takeaway is that the choice has to be made now, based on the rules as they stand, not put off in the hope that a later reform will merge the two.

FAQ

Kas IOSS ja ELi SME-erand saab kasutada korraga pärast 2027. aastat?

Ei. Euroopa Komisjoni selgituste ja liikmesriikide praktika järgi on IOSS (Import One Stop Shop) ja ELi SME-erand teineteist välistavad skeemid ka pärast 2027. aastat. Kui kasutad ühte, pead teisest loobuma.

Miks IOSS-i ja SME-erandit ei saa kokku kombineerida?

Põhjus on topeltmaksuvabastuse vältimine. IOSS võimaldab kuni 150-euroseid impordisaadetisi deklareerida käibemaksuvabalt impordil, kuid käibemaks tuleb koguda ja deklareerida müügihetkel IOSS-i kaudu.

Kas IOSS on liidu OSS?

Ei. IOSS ja liidu OSS on erinevad skeemid. SME-erand ja liidu OSS võivad eksisteerida kõrvuti, kuid IOSS-i ja SME-erandi puhul see ei kehti.

Kas 1. juuli 2028 muudatused muudavad 2027. aasta valiku (IOSS vs SME-erand)?

Direktiiv (EL) 2025/1539 võeti vastu 18. juulil 2025, kuid IOSS-i puudutavad muudatused hakkavad kehtima alles 1. juulist 2028. Need ei muuda IOSS-i ja SME-erandi vastastikust välistavust.