ioss, ddp or ddu?
Shipping Service Levels – What’s the Difference?
At Scale 3PL we offer flexible courier solutions depending on how hands-on or hands-off you want to be when it comes to shipping, taxes, and delivery.
Here’s a quick breakdown of the three main service types we offer:
Service
IOSS (IMPORT ONE STOP SHOP)
Who Pays Duties & Taxes? - SELLER (VAT PAID AT CHECKOUT)
Who Handles Customs? - SELLER (VIA IOSS NUMBER)
Buyer Experience: Fast, no fees
Best For: B2C e-commerce shipping into the EU under 150 Euros
DDP (Delivered Duty Paid)
Who Pays Duties & Taxes? - SELLER
Who Handles Customs? - SELLER
Buyer Experience: Seamless, no fees at delivery
Best For: Customers worldwide who want no customs hassle
DDU (Delivered Duty Unpaid)
Who Pays Duties & Taxes? - BUYER
Who Handles Customs? - BUYER (or carrier on Buyer’s behalf)
Buyer Experience: Buyer pays VAT/duties on delivery
Best For: Customers who want lower upfront costs but are fine handling customs/duties on arrival
In Plain English:
IOSS: You (the seller) collect VAT at checkout and use your IOSS number. The package clears customs smoothly when it arrives in the EU (for shipments under €150).
DDP: You (the seller) handle everything — duties, taxes, and customs. The buyer gets their package with no headaches.
DDU: The buyer is responsible for paying VAT and any import duties when the package arrives. This can slow things down and lead to surprise fees.
Quick Recommendations:
Use IOSS for fast, compliant EU shipping under €150.
Use DDP for a VIP experience — ideal for high-end products or premium customers.
Use DDU for low-cost shipments or budget-conscious buyers (but set expectations!).
Setting Up IOSS
Step-by-Step: How to Set Up IOSS
1. Check if IOSS Applies to You
Use IOSS if:
You’re based outside the EU (including the UK)
You’re selling direct to EU customers (B2C)
Your shipments are under €150 in value (per order)
Important: Orders over €150 do not qualify for IOSS and will still be subject to local duties and VAT at the border.
2. Appoint an EU-Based Intermediary
Non-EU businesses must use an EU-based intermediary to register for IOSS. These are companies that handle your IOSS registration, VAT collection, and monthly filings.
Recommended IOSS intermediaries:
They’ll provide you with an IOSS number that must be included on all customs documents when shipping into the EU.
3. Collect VAT at Checkout
Once you’re registered:
You must charge the correct EU VAT rate based on the buyer’s location
This VAT is paid by the customer at the time of purchase, not upon delivery
You report and remit this VAT monthly via your intermediary
4. Provide Your IOSS Number to Us
When you’re ready to ship, make sure you provide Scale3PL with your IOSS number. We’ll include it in the customs data to ensure smooth clearance at the EU border.
5. Keep Records & File Monthly Returns
Your intermediary will usually handle VAT filings, but you’re responsible for keeping accurate sales records for all EU orders under €150.
What About HMRC?
Since IOSS is an EU scheme, registration isn’t done through HMRC — but you may need to align your UK VAT reporting for consistency.
You can find general info on UK VAT and EU trade via HMRC:
Setting Up Ddp
We use Fedex to handle our DDP deliveries. Please let us know your delivery rules so we can allocate this courier to your account for your international orders.
Setting Up Ddu
You don’t need to do anything. The courier will contact your buyer to organise the payment of customs and taxes