The rule almost everyone still gets wrong
There is no VAT-free allowance for imported goods. The old exemption for consignments up to 22 € was abolished on 1 July 2021. Since then VAT is due on a commercial parcel from the first cent, whether it contains a 4 € phone case or a 400 € camera.
What the 150 € threshold does is remove customs duty. That is a different tax with a different base, and it is usually the smaller of the two: duty on most consumer goods runs from 0 to about 12%, while VAT is 17 to 27% depending on the country.
So a parcel below the threshold is not tax-free. It is duty-free, and the question is only who collects the VAT and when.
Three routes a parcel can take
| Situation | Duty | VAT | Clearance fee |
|---|---|---|---|
| Up to 150 €, seller in IOSS | none | paid at checkout | none |
| Up to 150 €, seller not in IOSS | none | collected on arrival | charged by the carrier |
| Above 150 € | applies | charged on the duty too | charged by the carrier |
The three routes cost different amounts for the same goods. The difference is not the tax — that is identical below the threshold — but the handling fee, which typically runs from a few euros to fifteen or more and exists purely because someone has to file a declaration and advance the tax.
What counts towards the 150 €
The threshold is measured against the intrinsic value — the price of the goods themselves. Transport and insurance are excluded, provided they are shown separately on the invoice.
That gives an outcome people find surprising: goods at 149 € with 25 € of shipping stay below the threshold, while goods at 151 € with free shipping do not. The customs value that duty is then calculated on does include the transport, so a parcel just over the line is taxed on the larger amount.
Two things do not benefit from the relief at any value: alcohol, tobacco products, perfumes and toilet waters are excluded from it entirely, and splitting one order into several parcels to stay under the threshold is treated as avoidance, not planning.
What IOSS actually changes
The Import One-Stop Shop lets a seller or marketplace charge the destination country’s VAT at checkout and remit it through a single monthly return. The parcel then travels with an IOSS number and passes customs without VAT being collected again.
For the buyer the saving is the clearance fee and the wait — not the tax. For the seller the difference is larger than it looks: a parcel that arrives with an unexpected 12 € bill on the doorstep produces refusals, refunds and one-star reviews, and the return shipping lands on the seller.
IOSS covers consignments up to 150 € only. Above that it cannot be used at all, and the normal import procedure applies — which is why a seller shipping both cheap and expensive goods needs two processes rather than one.
Worked example
Goods 120 €, shipping 15 €, delivered to Germany at 19%, carrier fee 8 €:
- intrinsic value 120 € — below the threshold, no duty
- VAT base = 120 + 15 = 135 €
- VAT = 135 × 0.19 = 25.65 €
- with IOSS: total 160.65 €, all of it paid at checkout
- without IOSS: total 168.65 €, of which 8 € is the fee
Now raise the goods to 200 € at a 4.7% duty rate. Customs value is 215 €, duty is 10.11 €, and VAT is charged on 225.11 € rather than 215 € — the tax applies to the duty as well. Total with the fee: 250.87 €.
Frequently asked questions
Only for genuine gifts between private individuals, which follow separate rules. For anything bought from a seller, VAT is due from the first cent.
The order confirmation should show VAT as a line item at your country’s rate. If the checkout total had no tax on it, expect the carrier to collect it on delivery along with its fee.
Because it filed the customs declaration and advanced the tax on your behalf. The fee is the carrier’s own price for that work, not a tax, and it varies widely between operators — postal services are usually cheaper than express couriers.
Per consignment. One order split across several shipments is judged on the whole order if the split exists to stay under the threshold.
If you ship low-value goods to EU consumers regularly, almost always: it removes the surprise charge that causes refusals, and one return usually costs more than a month of the intermediary fee. A seller established outside the EU generally needs an EU-established intermediary to register.
No — they are indicative averages by product group, and the real rate depends on the exact commodity code and the country of origin. Look the code up in TARIC before relying on the figure for anything above the threshold.