Tax·22 September 2026·10 min read

EU VAT MOSS in 2026: OSS, IOSS, the €10,000 threshold and registering in Latvia

What happened to MOSS

People still search for “VAT MOSS” when they start selling online. But the MOSS scheme ended on 1 July 2021. It was replaced by a wider scheme called OSS (One Stop Shop) and a new import scheme called IOSS.

This guide is for you if you sell goods or digital services to consumers in other EU countries. It explains how to work out the €10,000 threshold, when to register and which mistakes to avoid.

Next deadline: the OSS return and payment for Q3 are due by 31 October. You must file even if you made no sales in the quarter.

MOSS, OSS and IOSS at a glance

MOSS only covered telecoms, broadcasting and electronically supplied services. On 1 July 2021 it was extended and renamed OSS.

For a Latvian business, two schemes matter in practice: Union OSS and, if goods are shipped directly from outside the EU, IOSS. Both are optional. The alternative is to register for VAT separately in every country where you have customers.

Example: how a business crosses the threshold

This example is made up to show how the rules work in practice.

A small company in Mārupe sells linen towels through its online shop and offers a digital sewing-pattern subscription. It is VAT-registered in Latvia. Its customers are consumers in Germany and Finland.

Until 18 September, the company charged Latvian VAT at 21%. From the sale that takes it over the threshold, VAT is due in the customer's country. The standard rate is 25.5% in Finland and 19% in Germany.

The effect on cash: if €900 is the price including VAT,

• at the Latvian rate of 21%, the VAT is €156.20;
• at the Finnish rate of 25.5%, the VAT is €182.87.

That is €26.67 more VAT on one order. If prices stay the same, the difference comes out of the company's profit.

What the company needs to do:

1. By 10 October, apply for the Union OSS in the SRS Electronic Declaration System (EDS), stating that the scheme applies from 18 September.
2. Set up the online shop to charge VAT at the customer's country rate.
3. By 31 October, file and pay the Q3 OSS return for 18–30 September.
4. Throughout 2027, charge the customer's country VAT from the first euro, because the threshold was exceeded in the previous year.

The €10,000 threshold: how to work it out

The threshold is €10,000 a year across the whole EU, excluding VAT. It is not calculated country by country. If you went over it in the previous or current calendar year, VAT is due in the customer's country.

Include:

• distance sales of goods to consumers in other EU countries;
• telecoms, broadcasting and electronically supplied services to EU consumers, such as software subscriptions, apps, e-books, streaming and downloadable courses.

Do not include:

• sales to customers in Latvia;
• sales to VAT-registered businesses in other EU countries (the reverse charge applies);
• exports of goods outside the EU.

The threshold only applies if your business is established in one EU country and ships goods from that country. If you ship from a warehouse in Germany to a customer in France, the threshold does not apply. VAT is due in the customer's country from the first euro.

Check your threshold

Don't confuse this with the €50,000 threshold. That is the Latvian VAT registration threshold for domestic sales. Our article on VAT registration in Latvia explains when and how to register. Both thresholds apply at the same time.

How to register for OSS

A Latvian business registers for the Union OSS in the SRS Electronic Declaration System (EDS). The SRS makes a decision within five working days. If your business is not yet VAT-registered in Latvia, first check whether it needs to join the Latvian VAT register.

1. Choose your route. OSS is optional. Without it, you need to register for VAT and file returns in each customer's country.
2. Apply in EDS. The scheme normally starts on the first day of the next calendar quarter.
3. If you have already made the first sale. You can apply by the 10th of the following month. The scheme then applies from the date of that first sale.
4. Update your systems. Your online shop and accounting software must use the customer's country VAT rate, not the Latvian rate.

You can also join OSS before you reach the threshold. You then charge the customer's country VAT from the first euro, and you must stay in the scheme for two calendar years. This can make sense if you sell into countries with a lower VAT rate than Latvia's 21%.

After registering: returns and records

OSS return deadlines: 31 October 2026 (Q3), 31 January 2027 (Q4), 30 April (Q1) and 31 July (Q2). Other tax deadlines are listed in our Latvia tax calendar 2026.

Points to note:

• Do not round. Declare and pay the exact VAT amount, including cents.
• Correct errors in later returns. You can correct earlier periods in later OSS returns for up to three years.
• No VAT invoice needed. Under OSS, you do not have to issue a VAT invoice for distance sales of goods. Without OSS, you do.
• Input VAT is not claimed in the OSS return. Latvian input VAT is deducted in your normal Latvian VAT return.
• Keep evidence of where the customer is. For example, the delivery address, payment details and IP address.

IOSS: when goods are shipped from outside the EU

IOSS is for businesses whose goods are outside the EU at the time of sale and are shipped directly to a customer in the EU. This is common with dropshipping.

• Value limit: the consignment is worth no more than €150. IOSS does not cover excise goods.
• How it works: you charge VAT at the customer's country rate when they buy. No VAT is charged again at customs if the carrier has your correct IOSS number.
• Registration: you must have your IOSS number before the first sale. It cannot be backdated.
• Returns: monthly, by the end of the following month.
• Businesses outside the EU usually need to appoint an EU intermediary.

Since 1 July 2026 there is a €3 customs duty. The EU removed the customs duty relief for low-value consignments up to €150. Instead, a temporary duty of €3 applies to each item by tariff classification, not to each parcel. This applies until 1 July 2028. VAT through IOSS is still due on top.

Example: a parcel contains one silk blouse and two wool blouses. These fall under two tariff codes, so the customs duty is €6.

Common misconceptions

Seven common mistakes

1. Counting the threshold by country. €4,000 to Germany, €3,000 to Finland and €3,500 to France each look small. Together they add up to €10,500, which is over the threshold.
2. Leaving out digital services. Digital subscriptions and downloads count towards the threshold together with goods.
3. Missing the day you went over the threshold. The VAT rate changes from that sale, not from the next year.
4. Missing the 10th of the month. OSS will then only start from the next quarter, and you will need to register in customers' countries for the gap.
5. Not updating your online shop settings. You charge Latvian VAT, but you must declare VAT at the customer's country rate. The difference comes out of your profit.
6. Not filing a return for a quiet quarter. A return is due every quarter.
7. Including sales to businesses in OSS. Sales to EU businesses with a valid VAT number do not go in the OSS return.

Four questions I ask every e-commerce client

Before we discuss OSS, I ask four questions. The answers usually show whether the business already owes VAT in other countries.

1. How much did you sell to consumers in other EU countries last year? If it was more than €10,000, you must charge the customer's country VAT from the first euro this year.
2. Where are your goods shipped from? A warehouse in another country or Amazon FBA changes the picture.
3. Do you also sell digital products? E-courses, templates and subscriptions are often left out.
4. How does your online shop set the VAT rate? If it charges Latvian 21% to everyone, that is the first thing to fix.

What changes in 2027 and 2028

The EU reform “VAT in the Digital Age” (ViDA) will extend OSS step by step.

If you get your OSS records in order now, these changes will be easier to handle.

Frequently asked questions

Does MOSS still exist?

No. Since 1 July 2021 it has been replaced by the Union OSS, the non-Union OSS and IOSS.

When do I need to register for OSS?

OSS is optional. But once your distance sales and digital services to consumers in other EU countries go over €10,000 a year in total, VAT is due in the customer's country. You can account for it through OSS or by registering in each country.

Is the €10,000 threshold including or excluding VAT?

Excluding VAT.

When is the OSS return due?

Every quarter, by the end of the following month. You must file even if there were no sales.

Does OSS apply to sales to businesses?

No. OSS only covers sales to customers who are not VAT-registered.

Can I leave OSS if I joined voluntarily?

If you joined before reaching the threshold, you must stay in the scheme for at least two calendar years.

This article is for general information and is not individual tax advice. Last updated 22 September 2026.

Sources

• SRS guidance “E-komercija” (updated 02.01.2025, in Latvian)
• SRS “Noderīgi par OSS/IOSS režīmu” (in Latvian)
• SRS: Special VAT returns
• Your Europe: EU VAT One Stop Shop
• European Commission: €3 duty on low-value imports
• European Commission: VAT in the Digital Age (ViDA)
• Latvian VAT Law, Sections 10.¹ and 140.²–140.⁴ (likumi.lv)

Māris Nelsons, ACCA

Founder of SMAIDA Solutions. 25 years in financial management across banking, fintech and international groups.

Published: 22 September 2026.