Applying the IOSS scheme in your store
Starting July 1, 2021, all goods imported to the EU are subject to cross-border VAT. This means that either you should charge your customers at checkout, or they will be charged when receiving their order in the EU. Charging customers at checkout is allowed if the order is below €150 and you register with the Import One Stop Shop (IOSS). Learn more about the EU VAT rules →
If you’ve registered with IOSS, you can charge your EU customers VAT right in your store so they don’t need to pay anything when receiving the order. For that, enable the IOSS scheme on the Taxes page in your store admin.
The IOSS scheme can be applied to the customer's cart at checkout if:
- You’re using automatic taxes in your store.
- Your store address is outside the EU.
- Shipping destination for the order is inside the EU.
- Order costs €150 or less — that is, excluding taxes, shipping, insurance, and any other charges applied to the order (unless they are included in the product price).
- You've enabled IOSS in your store.
To enable the IOSS scheme in your store:
- From your store admin, go to Settings → Taxes & Invoices.
- Scroll down to Settings.
- Enable the Charge VAT to the European Union customers at checkout toggle.
- The changes will be saved automatically.
That’s it! Now when all the conditions are met, the IOSS scheme will be applied to the customer's cart at checkout and they will be charged the VAT rate of the EU Member State where the order is to be delivered (e.g., 20% for France and 21% for Netherlands).
After you enable the IOSS scheme in your store, you'll be able to charge VAT for orders that cost €150 or less at checkout. However, you must register for the IOSS to declare and pay these taxes. If your business is located outside the EU, you can do it via an IOSS intermediary: a taxable person established in the EU.