shipping

Shipping Aggregators and IOSS Compliance: Supporting Seamless Cross-Border Trade

Shipping aggregators have been an essential part of e-commerce from the very beginning. Over the years, many have grown into multi-billion-euro companies, earning the trust of merchants and the backing of e-commerce platforms. Their core value lies in making logistics accessible: offering multiple last-mile delivery options, often at discounts of 30% to 40% compared to standard carrier rates, all through a single, easy-to-use interface.

For merchants, setup is simple. Install the aggregator app, connect a payment method, and you can begin shipping to multiple destinations, with service levels ranging from economy to express, and from door-to-door to postamat delivery. Standardisation, ease of use, and reliability have turned these platforms into a cornerstone of the online selling experience.

But as e-commerce continues to globalise, a new layer of complexity has emerged: tax compliance.

Aligning Logistics with Regulatory Demands

At EAS, we have reviewed dozens of aggregator solutions on the market. In most cases, they function exactly as intended. However, as soon as a parcel crosses a national border, logistics must align with complex customs, VAT, and import regulations.

Aggregators are in a unique position to help merchants meet these requirements efficiently and automatically. With just a few enhancements in how data is managed and shared, aggregators can offer a new level of value to merchants selling to the EU, UK, and other regulated markets.

EAS is already working alongside aggregators to make merchant operations as seamless as possible. By joining forces, we can provide a unified experience where logistics and compliance move in lockstep—delivering not just parcels, but certainty.

Let us look at a practical example where close collaboration can eliminate pain points and unlock added value.

Example: Shopify – Valuation and Currency Pitfalls

Shopify, the world’s most widely used e-commerce platforms, typically provides item prices as VAT-inclusive when VAT is applied. It also supplies a separate field showing the VAT amount.

However, for customs clearance, the relevant value is the intrinsic value, that is, the item price excluding VAT and shipping. If this VAT is not properly deducted, customs authorities may calculate duties or taxes based on the wrong amount.

When Shopify’s settings are configured for IOSS (for example, when the €150 threshold is enabled), it may automatically provide VAT-exclusive prices for eligible orders and set the VAT value to zero. This behaviour is correct, but aggregators rarely assess it.

Most shipping aggregators simply forward the order data to last-mile carriers without validating or adjusting it. As a result:

If the item price includes VAT but is treated as a net value,

Or if a VAT-exclusive price is misunderstood as gross,

then shipments near the €150 threshold may be incorrectly excluded from IOSS processing. This leads to double taxation at delivery or customer refusals.

Currency Confusion: Shop Currency vs Presentment Currency

Shopify records order data in two currencies:

The shop currency(used for product pricing in the storefront), and

The presentment currency(used for payment processing, depending on the buyer’s location).

Aggregators often do not allow merchants to specify which currency to use. Instead, they choose one, typically the currency most common in their operating market. For example, UK-based aggregators may convert customs values into GBP, as that aligns with their local shipping invoicing.

This can result in the same numeric value being passed forward, but expressed in the wrong currency. A €130 order may be declared as £130, triggering:

  • Overvaluation at customs,
  • Excess VAT or duties, and
  • Rejected or returned shipments.

Currency consistency is critical in cross-border sales. Any mismatch between declared and actual transaction currency increases the risk of customs delays, added charges, or customer dissatisfaction.

Enhancing Platform Compatibility for Cross-Border Success

Shipping aggregators have built their success on offering a unified, efficient experience across a wide range of e-commerce platforms. This platform-agnostic approach is one of their greatest strengths, but when it comes to customs compliance, especially in EU and UK trade, platform-specific differences matter.

Platforms like Shopify, WooCommerce, Wix, and Magento handle VAT, pricing logic, and currency formats differently. Applying a single logic across all platforms can unintentionally lead to data mismatches that impact customs clearance.

This is where aggregators and EAS can collaborate to add value. By adapting key parts of the data flow, such as VAT handling and currency mapping, aggregators can deliver seamless compliance alongside excellent shipping services.

Handling Tax Identifiers: A Shared Opportunity

Another area where closer integration would benefit both merchants and aggregators is the management of tax identifiers:

  • IOSS numbers
  • UK VAT numbers
  • Norwegian VOEC numbers

Today, many platforms allow only a single IOSS number per merchant account. In practice, however, a merchant might need to use multiple identifiers, for example, a marketplace’s IOSS number for marketplace sales, and their own IOSS number for direct website orders.

Supporting multi-channel identifier logic is a valuable upgrade that can reduce customs delays, prevent rejections, and boost overall merchant satisfaction.

How Aggregators and Merchants Can Align for Seamless Compliance

A few best practices can ensure a smoother experience for merchants and their customers:

Flexible Tax Identifier Handling: Allow the use of multiple IOSS numbers based on sales channel. EAS can provide support in setting up logic rules or workflows.

Transparent Valuation Logic: Make it clear how VAT is handled in incoming order data and adjust values accordingly for customs use.

Clarified Tax Terminology: Terms like “DDP” can have different meanings across systems. Provide merchants with guidance on how terms are applied in your platform.

Carrier Compatibility Mapping: Clearly show which carriers support IOSS, UK LVCR, and DDP shipments to help merchants choose the right shipping options.

Open Communication Channels: Aggregators are well-positioned to liaise with carriers. Sharing insights or providing merchant-facing support documentation can reduce the need for troubleshooting.

Partnering for a Better Merchant Experience

Shipping aggregators continue to play a key role in enabling seamless and cost-effective international e-commerce. As global tax and customs regulations evolve, there is a growing opportunity for aggregators and compliance providers to work hand in hand, ensuring that merchants can expand confidently across borders without unexpected issues.

EAS offers the most comprehensive and automated cross-border tax compliance solution available. By partnering with EAS, aggregators can enhance their platform offering, support merchant growth, and minimise risks related to customs and VAT.

With closer collaboration on data handling and tax compliance, we can jointly improve delivery accuracy, reduce the risk of double taxation, and enhance the end-customer experience.

For further insights on building tax-compliant cross-border shipping flows, visit the EAS Help Centre or explore our latest blog articles.

Author:

Ross Shakhtakhtinskiy, CEO at EAS

Ask Ross about European regulation, and he’ll orchestrate a symphony of taxes! That’s a guaranteed lullaby