What is IOSS?
IOSS (Import One-Stop Shop) is an EU VAT system for imports under €150. Xendo registers and manages IOSS on behalf of merchants, eliminating the need for a separate registration. The latest information are here: https://vat-one-stop-shop.ec.europa.eu/index_en

Who can use IOSS?
Any business selling goods to consumers in the EU, regardless of where your business is located and the goods being sent are valued at €150 or less.

What counts as an IOSS applicable shipment?

• The goods you’re selling must originate from a country outside the European Union, regardless of where your company is located.
• The person you’re shipping to must live in an EU country and be buying the goods for their own personal use. This means IOSS doesn’t apply to sales to businesses.
• The total value of the goods in the shipment must be €150 or less, excluding shipping costs and any other charges.
• It applies to the total value of all items in a single parcel, not the individual products purchased. For example two items valued at €70 each, packed and delivered in a single parcel would qualify for IOSS. However, IOSS cannot be used for multiple shipments on the same day, from the same sender to the same recipient, if the total value of all those shipments equals over 150 Euros.
• Exclusions can apply, for example, goods that are subject to excise duty, such as alcohol, tobacco, or perfume. If in doubt, check with the VAT office of the country you are exporting to.

What about goods valued over €150?

• If the total value of all items in a single parcel is more than €150, IOSS will not apply. Import taxes may be applicable on goods worth more than €150.  
• You can read more about who is responsible for paying the duties and taxes in country here. It can be the buyer (your customer) or the seller (your business) which is called Delivery Duty Paid (DDP) or Delivery Duty Unpaid/ Delivered At Place (DDU/DAP)

Do I have to use IOSS?
No, it’s not a mandatory requirement. You could opt to pay VAT manually, but this means you will have to register for VAT in at least one EU country and ensure that you file VAT returns for every country you ship to which could become very complex and time consuming.

The benefit of registering for IOSS is, it provides your customers with greater transparency regarding the import taxes applicable to them at the point of payment (during the checkout process). It also enables both you as a business owner and your customer to experience faster transit times as IOSS provides faster clearance through customs.

If you decide against becoming IOSS registered or the value of your goods are over €150, you can still choose to send under DDP (Delivered Duty Paid) or DAP (Delivered at Place) terms.

I’m sending B2B – can I use IOSS?
IOSS is only applicable for businesses selling to consumers. If your e-commerce store is selling to businesses, you can send goods under the DDP (Delivered Duty Paid) or DAP (Delivered at Place) terms.

Are there any additional customs charges to pay when you provide an IOSS number?
All fees and customs charges are taken at the point of sale so your customers won’t get a bill to pay any customs fees when their parcel arrives in the destination country.

What are the European Import VAT (in-country Tax payment) costs – by country?
An import VAT is an in-country tax paid when receiving goods from abroad. Duties and taxes are imposed by countries to generate revenue, protect local industries against foreign competition, or both. VAT rates vary by country but generally range between 17% to 27% in the EU.

Austria: 20%
Belgium: 21%
Bulgaria: 20%
Croatia: 25%
Cyprus: 19%
Czech: 21%
Denmark: 25%
Estonia: 20%
Finland: 24%
France: 20%
Germany: 19%
Greece: 24%
Hungary: 27%
Ireland: 23%
Italy: 22%
Latvia: 21%
Lithuania: 21%
Luxembourg: 17%
Malta: 18%
Netherlands: 21%
Norway: 25%
Poland: 23%
Portugal: 23%
Romania: 19%
Slovakia: 20%
Slovenia: 22%
Spain: 21% 

When are VAT returns due?
VAT return deadlines vary by country and are typically monthly, quarterly, or annually.

Xendo’s AI-powered tax engine automates VAT reporting and ensures that VAT refunds are processed instantly once returns are confirmed. The system also files VAT adjustments with tax authorities, guaranteeing compliance and optimizing cash flow.

What is the difference between the IOSS and OSS VAT schemes?
IOSS applies to imports of goods under €150, ensuring VAT is collected at checkout and eliminating import VAT at customs for faster clearance. It is mainly for non-EU sellers shipping to EU consumers and requires a monthly VAT return.

OSS covers intra-EU sales of goods and services, allowing businesses to register for VAT in one EU country instead of multiple. VAT is collected at checkout based on the buyer’s location and reported quarterly. It applies to both EU and non-EU sellers selling within the EU.

Xendo automates IOSS & OSS VAT compliance.

What is import duty?
Import duty (or customs duty) is a tax collected by customs authorities on all goods sold across borders. The aim of import duties is to raise income for local governments – but also to increase the end price of the goods for consumers, thus encouraging them to buy from the domestic market, which is not subject to this tax. Common examples of import duties are trade tariffs and excise duties.

How is import duty calculated?
Import duty is calculated based on the customs value, which includes the product cost, shipping (CIF), or just the product price (FOB). The duty rate is determined by the product’s classification (HS code) and the country of origin. Xendo automates duty classification and real-time calculations for seamless cross-border compliance.

Who is responsible for paying import duty?
The responsibility for paying import duty depends on the shipping terms: In DDP (Delivered Duty Paid), the seller pays all duties upfront, while in DDU (Delivered Duty Unpaid), the buyer pays upon arrival. The Importer of Record (IOR) ensures compliance and duty payment. Xendo automates duty calculations, payment processing, and IOR services for seamless customs clearance.

How does Xendo automate VAT classification?
Xendo Decision Engine checks if the product category is known. If category is unknown, Xendo uses machine learning (ML) classification. VAT rates are retrieved per country. If an exemption applies, the system updates the basket in real-time​.

What happens if a product has a reduced VAT rate?
Xendo checks: 

• Category-based VAT lookup,
• Keyword descriptions & harmonized tariff codes
• Local VAT exemptions & special rates
• If a reduced rate applies, the system updates the VAT calculation​

How does Xendo process payment settlements?

• The final VAT & duty amount is sent to the ledger.
• Xendo withdraws fees from the deposit balance.
• Payment confirmation is sent via webhook.
• The order is closed, and all transaction data is logged

What order details does Xendo store?

• VAT & duty amounts
• Order reference number
• HAWB (air waybill) tracking number
• Harmonized tariff codes
• Commercial & shipping invoices

This ensures full compliance with customs authorities​

Does Xendo provide reporting & reconciliation?
Yes, Xendo generates:

• VAT compliance reports
• Ledger-based reconciliation
• Detailed transaction logs

These reports help businesses track tax liabilities across multiple jurisdictions​.

What is customs clearance, and why is it required for imports?
Customs clearance is the process of verifying, inspecting, and approving goods before they enter a country. It ensures that import duties, VAT, and regulations are correctly applied. Without clearance, shipments may be delayed, rejected, or fined. Xendo automates customs compliance, duty calculation, and tax processing for faster cross-border trade.

What is the Importer of Record (IOR), and why is it important?
The Importer of Record (IOR) is the legal entity responsible for import compliance, customs clearance, and duty/VAT payments. IOR ensures all required documentation is submitted, pays import duties and VAT and prevents delays by handling regulatory requirements. Xendo acts as an IOR for businesses, removing the need for them to establish a local entity in every country they sell to.

Who is responsible for paying import duty?
The importer or buyer usually pays duty, but in DDP (Delivered Duty Paid), the seller covers it upfront. In DDU (Delivered Duty Unpaid), the buyer pays upon arrival.

What is the difference between VAT and customs duties?

• VAT is a sales tax applied to goods and services based on their selling price. 
• Customs duties are import taxes charged based on the product’s CIF value (Cost, Insurance, and Freight) and HS (Harmonized System) code.

Do C2C shipments require VAT and import duty?
Yes, VAT and import duty apply when shipping goods cross-border. EU-to-EU shipments are VAT-free, but imports from outside the EU or UK attract VAT. Xendo simplifies VAT handling by using Special Arrangements to collect and remit VAT on behalf of buyers.

Who is responsible for paying VAT in a C2C transaction?
The buyer is responsible for VAT payment, as C2C transactions do not impose VAT liability on marketplaces. Xendo facilitates VAT collection at checkout, ensuring smooth customs clearance and avoiding unexpected fees upon delivery.​

Can IOSS be used for C2C shipments?
No, IOSS is not available for C2C shipments because private sellers are not taxable persons. Instead, Xendo offers Special Arrangements to streamline VAT payments, ensuring compliance for second-hand goods sold internationally.​​

What is the difference between DDP and DDU?

• DDP (Delivered Duty Paid): The seller pays all import duties, VAT, and customs fees upfront, ensuring a seamless delivery for the buyer. 
• DDU (Delivered Duty Unpaid): The buyer is responsible for paying duties, VAT, and clearance fees upon arrival, which can lead to delays and unexpected costs.

Which is better, DDP or DDU?

• DDP provides a better customer experience since there are no surprise fees at delivery and faster customs clearance.
• DDU can be cheaper for sellers, but buyers may face customs delays, extra costs, and abandoned shipments.

How does Xendo help with DDP and DDU?
Xendo automates duty and VAT calculations, allowing sellers to choose between DDP (prepaid duties for a smooth delivery) or DDU (letting the buyer handle import taxes). Xendo also provides real-time tax estimates at checkout for transparency.

What is the difference between Merchant of Record (MOR) and Importer of Record (IOR)?

• MOR (Merchant of Record): The legal entity responsible for selling goods, collecting payments, and handling VAT compliance for transactions. Used mainly by marketplaces and eCommerce platforms.
• IOR (Importer of Record): The entity responsible for ensuring customs compliance, paying import duties, and VAT upon goods entering a country. Used for international trade and logistics.

Who needs an MOR vs. an IOR?

• MOR is needed when selling goods directly to customers, particularly for marketplaces (e.g., Amazon, Shopify, Vinted) that take VAT responsibility.
• IOR is required when importing goods internationally, ensuring duty, VAT, and compliance requirements are met before goods enter a country.

How does Xendo help with MOR and IOR?
Xendo provides IOR services, ensuring that import duties and VAT are properly handled for businesses shipping cross-border. For MOR, Xendo can assist in VAT compliance but does not take ownership of goods.

I have a technical question, who do I contact?
For any technical inquiries, please reach out to Xendo Support at support@xendo.co.

What is Xendo, and what services does it offer?
Xendo is a cross-border compliance solution that automates VAT, import duties, customs clearance, and logistics for eCommerce businesses, marketplaces, and logistics providers.

What regions does Xendo support for VAT and customs compliance?
Xendo covers EU, UK, US, and other major global markets, ensuring compliance with local tax laws and customs regulations.