EU Removes €150 VAT Limit for Online Imports: What Changes for Sellers?
Buying something online from another country often comes with an extra question: will there be additional taxes or charges when the parcel arrives? The European Union is taking another step towards making that process simpler.
On 9 November 2026, EU finance ministers agreed to extend the Import One-Stop Shop (IOSS) VAT system to all imported goods, removing the existing €150 limit. The change will allow businesses and online platforms to account for VAT on higher-value goods through the same system currently used for lower-value consignments.
What was the €150 limit? The €150 limit was the maximum parcel value eligible for the EU’s simplified IOSS VAT system. Under the previous rules, only parcels worth €150 or less could use IOSS; parcels above €150 had to follow a different VAT payment process.
One VAT System for All Imports
Until now, businesses selling goods from outside the EU to customers within the bloc could use IOSS only for consignments valued at €150 or less. The system allows sellers to collect VAT when a customer makes a purchase and declare and pay it through a single EU Member State, rather than registering separately in every country where they have customers.
The new agreement removes this value restriction. Businesses will be able to use IOSS for goods of any value, making it easier to handle VAT on cross-border online sales.
It is worth noting that this does not introduce VAT on higher-value imports for the first time. Since 1 July 2021, VAT has been payable on imported goods regardless of their value. What is changing is the way businesses can collect and report that tax.
The agreement also extends IOSS to goods stored in EU customs warehouses by non-EU operators before being sold to customers. Such warehouses are commonly used by online platforms that import products in bulk and then distribute them individually.
Online Platforms Take More Responsibility
Another important part of the agreement concerns the role of online marketplaces.
From 1 July 2028, non-EU online marketplaces will be responsible for collecting and paying VAT on goods sold through their platforms to EU customers, regardless of the goods' value. This means individual sellers will no longer handle VAT collection for these transactions themselves.
This means the platform will be responsible for collecting VAT from customers and paying it to the relevant tax authorities. The final price displayed at checkout should include the applicable VAT and customs charges.
For customers, this is intended to make the cost of an online purchase clearer before they complete an order. Instead of facing unexpected VAT payments when a parcel arrives, buyers will generally see the applicable charges included in the checkout price.
The change also places greater responsibility on online marketplaces to ensure that VAT is correctly collected and reported.
What Indian Online Sellers Should Know
For Indian businesses selling products to customers in Europe, the changes are relevant, particularly for those using international e-commerce platforms.
Consider an Indian seller offering handicrafts, textiles, jewellery or other products to European customers. Under the existing arrangement, the value of a shipment determines whether the seller can use IOSS. Once the new rules apply, that distinction will no longer restrict access to the scheme.
Businesses selling through online marketplaces will also need to understand how the platforms handle VAT collection and reporting under the new arrangements. Those selling directly to European consumers should review the available VAT registration and intermediary arrangements to determine how they can use the expanded IOSS system.
India has also been working to simplify its own cross-border e-commerce export procedures. In August 2026, the Indian government announced an Exporter-on-Record framework for eligible e-commerce entities. Under this arrangement, registered entities can undertake exports on behalf of Indian sellers and assume responsibility for export operations and compliance with destination-country requirements.
While this framework addresses export procedures on the Indian side, it does not replace the need to comply with EU VAT requirements. Indian sellers will still need to understand the tax obligations applicable to their products and sales in Europe.
New Rules Begin in 2028
The Council's agreement is a general approach, and the European Parliament will be consulted before the rules are formally adopted by the Council.
The new provisions are scheduled to apply from 1 July 2028, alongside the planned launch of the EU Customs Data Hub (This is a central online platform being developed by the European Union to manage customs information for goods entering and leaving the EU).
For Indian exporters and other businesses selling into Europe, this gives them time to review their sales arrangements, understand how online marketplaces will handle VAT and prepare for the revised system.
The €150 limit may have been a small detail in the rules governing online imports, but its removal will change how VAT can be handled across a much wider range of cross-border transactions.
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