Selling online with no local stock — direct shipments, dropshipping, sourcing outside the EU? Two single windows are all you need.
The OSS (One-Stop Shop) lets you declare in a single place your distance sales of goods and services to private individuals within the EU, as soon as you exceed €10,000 of cross-border sales per year.
The IOSS (Import One-Stop Shop) covers imports of goods ≤ €150 shipped directly from a non-EU country to a European customer — the typical case of dropshipping.
One handles intra-EU flows, the other low-value imports — and both can be run with peace of mind from an established European company, such as a VAT-registered Bulgarian EOOD.
The scope of this guide. Here, we deal only with distance sales without local stock: direct shipments, dropshipping and imports of small parcels, run via the OSS and IOSS single windows.
If you store your goods in several countries (Amazon FBA warehouses) or if you also sell to the United Kingdom post-Brexit, this is not the right regime on its own: refer to the sibling guide multi-country EU + UK VAT, dedicated to FBA storage and local VAT registrations.
What is OSS for distance sales (without local stock)?
The OSS (single window, or One-Stop Shop) is the VAT regime introduced in July 2021 for distance sales within the European Union.
As soon as an online retailer sells goods or certain services to private individuals located in other EU countries and crosses the single threshold of €10,000 of cross-border sales per year (across all countries combined), they must apply the VAT of the customer's country of destination — and no longer that of their country of establishment.
Without OSS, this would mean registering for VAT in every member state where you have customers. OSS removes that friction: you file a single quarterly return with a single tax authority, which then distributes the VAT collected among the countries concerned. One number, one return, one payment.
Below €10,000 of annual intra-EU sales, you charge the VAT of your country of establishment. Above it, OSS becomes the go-to simplification tool — but it covers only distance sales, not offshored stock.
What is IOSS and how does it apply to dropshipping (imports ≤ €150)?
The IOSS (Import One-Stop Shop) addresses a different scenario: goods imported from a third country (China, the United Kingdom, the United States…) and shipped directly to an EU private individual, where the intrinsic value of the consignment does not exceed €150. Since the abolition of the former €22 exemption, every imported parcel is subject to VAT, whatever its value.
IOSS lets you collect the VAT at the point of sale, directly in your store or marketplace, then declare it via a single window. The benefit is twofold: customs clearance is faster (the parcel passes customs without a VAT block), and the end customer faces no unpleasant surprise — no VAT charges or handling fees claimed by the carrier on delivery.
Above €150, IOSS does not apply: the VAT and, where applicable, the customs duties are handled under the standard import procedure.
IOSS remains optional to date — the proposal to make IOSS mandatory for marketplaces was not retained in the ViDA package — but it is a major conversion lever for any seller in dropshipping or non-EU sourcing.
Both OSS and IOSS stem from the EU "e-commerce VAT package": Directive (EU) 2017/2455, supplemented by Directive (EU) 2019/1995.
What changes on 1 July 2026 is the abolition of the customs-duty exemption under €150 — not the VAT. A temporary flat duty of €3/item will apply until 1 July 2028, as part of the customs union overhaul.
The import VAT remains unchanged: IOSS continues to collect B2C VAT on consignments of ≤ €150. Announced milestones:
- 01.07.2026 (end of the duty exemption)
- 01.11.2026 (advance data — PID — mandatory)
- 01.07.2028 (EU Customs Data Hub)
Note: mandatory IOSS for marketplaces was ultimately not retained in the "VAT in the Digital Age" package (ViDA, adopted on 11 March 2025) — it is deferred to the customs reform.
On the ViDA side, the confirmed timetable provides for clarifications in 2027, the strengthening of IOSS in March 2028 and Single VAT Registration in July 2028.
Official sources: EU customs reform (European Commission) and ViDA package (European Commission).
OSS or IOSS: what are the differences in one table?
| Criterion | OSS | IOSS |
|---|---|---|
| Type of flow | Intra-EU distance sales | Imports from a third country |
| Threshold / cap | Above €10,000/year cross-border | Consignment of value ≤ €150 |
| VAT applied | VAT of the country of destination | VAT of the country of destination, collected at the sale |
| Filing frequency | Quarterly | Monthly |
| Nature | Almost unavoidable above the threshold | Optional, strongly recommended |
| Typical case | Shopify store shipping across the EU | Dropshipping / non-EU sourcing |
The two regimes are not mutually exclusive: the same seller can perfectly well use OSS for their intra-EU shipments and IOSS for their low-value imports. If you also sell to the United Kingdom or store goods in several warehouses, see our guide multi-country EU + UK VAT.
When and where to register for OSS and IOSS?
The right reflex is to register before crossing the threshold, to avoid any retroactive correction. In practice:
As soon as your intra-EU distance sales approach €10,000/year, you register with the OSS window of your country of establishment. For a Bulgarian company, registration is done with the Bulgarian tax authority (NRA).
As soon as you ship goods ≤ €150 from a third country to the EU. A company established in the EU, such as an EOOD, can register directly, without going through a mandatory tax intermediary (unlike a seller established outside the EU).
A valid VAT number is the prerequisite for everything. If you physically import or export goods, you will also need a Bulgarian EORI number for customs clearance. At Fenchell, per-country EU VAT registration starts at €125 excl. VAT and OSS/IOSS support at €250 excl. VAT (indicative firm fees, excluding any local taxes).
OSS covers distance sales, but not local storage. If Amazon moves your goods to a warehouse in Germany, Poland or Italy, you trigger a local VAT registration in that country — on top of OSS. This is the most common mistake pan-European sellers make.
Why run your e-commerce VAT from a Bulgarian company?
OSS and IOSS are regimes reserved for taxable persons: they presuppose a VAT-registered company, with kept accounts and genuine economic substance. This is precisely where a Bulgarian company becomes an ideal base for a European online retailer.
For a 100% remote formation, with no capital deposit or prior bank account, the DPK/EDPK is often the simplest choice; the EOOD (or the OOD with several shareholders) remains the "classic" form with a capital deposit — see EOOD, OOD or DPK. Whatever form you choose, running OSS/IOSS is identical.
First, the taxation: the 10% corporate income tax (flat rate), then a withholding between 0 and 5% on dividends once profits are distributed (0% to an EU/EEA parent company, with no threshold or holding period; 5% paid to an individual, a rate maintained in 2026).
That is an effective burden of around ≈ 10 to 14.5% depending on the dividend rate — the overall tax burden among the lowest in the EU (Hungary does advertise a 9% headline corporate tax, but its taxation exceeds 20% once dividends are added).
Legal basis: dividend withholding between 0 and 5% (0% to an EU/EEA parent company, with no threshold or holding period — чл. 194, ал. 3, т. 3 ЗКПО; 5% paid to an individual — чл. 38, ал. 1, т. 2 and чл. 46, ал. 3 ЗДДФЛ), ЗКПО on lex.bg. A genuine asset for the net margin your sales activity generates.
Next, operational simplicity: as a company established in the EU, your EOOD registers for OSS and IOSS without an imposed tax intermediary, and declares everything from a single Bulgarian window.
OSS registration is done with the Bulgarian tax authority (NRA) using a qualified electronic signature (QES BORICA / B-Trust key), and the registration act is generally issued within about a fortnight.
Since 1 January 2026, Bulgarian VAT registration becomes mandatory above €51,130 of turnover (≈ 100,000 BGN), now assessed on the turnover of the calendar year (no longer on a rolling 12 months), with a 7-day application deadline. Independent of the €10,000 intra-EU OSS threshold, which follows a different logic. Basis: чл. 96 ЗДДС (published in the Държавен вестник бр. 115/30.12.2025).
A low tax is useless if the company is not genuinely workable remotely. Declaring to OSS requires:
- a qualified electronic signature (QES BORICA / B-Trust key) to be activated on the ground
- a FID (personal tax identifier)
- a registered AML point of contact (POC)
- bank/fintech accounts that you open yourself, remotely — the client remains the applicant and the holder
- VAT bookkeeping managed locally
A generic incorporation — wherever it is set up — delivers the legal shell and stops there. The Fenchell offer, by contrast, is an integrated, inseparable system: a file of more than 20 bilingual Bulgarian/English documents — more than 30 for multi-shareholder companies — including:
- the articles of association, the 8 notarised powers of attorney, the stamped registration certificate with its sworn translation
- the QES key, the FID
- the (corporate) Bulgarian mobile line with a dedicated web interface to read your SMS (OTP / 2FA codes) live from any device
- the registered address in Plovdiv and the AML point of contact
All of it is designed from the outset by our legal team for remote management — embodying years of experience and thousands of real client files, points a generic incorporation does not anticipate.
Operability is not bolted on afterwards: it is built into the file itself. It is precisely this infrastructure that creates the genuine economic substance — the kind that makes the tax advantage defensible and the company truly workable, rather than an empty shell.
Fenchell's Eurotrade pack brings together this entire infrastructure in one coherent file:
- full company incorporation (name reservation, articles of association, filing with the Commercial Register, EIK, EORI number, Bulgarian VAT registration) from €890 excl. VAT
- stamped registration certificate and its sworn translation, 8 bilingual notarised powers of attorney, FID, QES key
- (corporate) Bulgarian mobile line with a dedicated web interface to read your SMS (OTP / 2FA codes) live from any device
- registered address and office in Plovdiv (with mail collection and scanning), AML point of contact
- connectable accounting dashboard (Stripe, PayPal, Amazon, Wise, Airwallex) and locally kept bookkeeping that runs your OSS/IOSS returns, your multi-country registrations and your EORI
Each element has been designed to work with the others: a single system, built for a company that is both compliant and genuinely operable remotely — without having to juggle one provider per country.
To run OSS and IOSS, being registered is not enough: you need everything that makes the company genuinely workable remotely. A generic incorporation stops at the first line; the Eurotrade pack ticks every box — verifiable, line by line.
| What it takes to run OSS / IOSS remotely | Generic registration | Eurotrade pack |
|---|---|---|
| The prerequisite for any VAT regime | ||
| Registered company + EIK + Bulgarian VAT number | ||
| What makes OSS / IOSS declarable remotely | ||
| QES key (qualified electronic signature) activated on the ground to file with the NRA | ||
| FID (personal tax identifier) + 8 bilingual notarised powers of attorney | ||
| Direct OSS & IOSS registration, without an imposed tax intermediary | ||
| Bulgarian EORI number for import/export customs clearance | ||
| Local VAT registrations (FBA stock Germany, Poland, Italy…) | ||
| The infrastructure that makes the company operable | ||
| Real office & registered address in Plovdiv (mail collection + scanning) | ||
| Bulgarian mobile line + SMS OTP/2FA readable live | ||
| Registered official point of contact (AML/MAMLA) | ||
| Locally kept bookkeeping that runs your OSS/IOSS returns | ||
| Connectable accounting dashboard (Stripe, PayPal, Amazon, Wise, Airwallex) | ||
Structure your e-commerce VAT from the outset
Form your Bulgarian company 100% remotely from €890 excl. VAT, then entrust us with your EU VAT: OSS, IOSS and multi-country registrations, run from Plovdiv by a dedicated team.
FAQ
What is the difference between OSS and IOSS?
At what threshold do you have to register for OSS?
Is IOSS mandatory?
Can a Bulgarian company use OSS and IOSS?
Does OSS remove the need for local VAT registrations?
General information current as of 6 June 2026, not constituting personalised tax, legal or accounting advice. Thresholds, rates and amounts are indicative and vary according to your situation and your activity. Fenchell Capital OOD — Bulgarian firm based in Plovdiv (EIK 207945095).