Pro feature

Reduced rates

Reduced rates apply under IOSS

A persistent misconception is that IOSS is standard-rate-only. It is not: IOSS supplies take the same destination-country rates as domestic supplies — the official return format itself has standard and reduced boxes per member state, and the standard-rate-only shortcut exists only in the special arrangements scheme carriers use when IOSS is not used, never in IOSS itself.

So if you sell children’s books to Ireland (0%) or food supplements to Germany (7%), charging the standard rate is not “safe rounding up” — it overcharges your customer and misstates your return. Conversely, claiming a reduced rate for goods that don’t qualify understates it. Reduced-rate mapping is the Pro feature that lets you get this right per category. It requires a Pro license — see Licensing.

How the mapping works

Without the feature enabled, everything is charged and reported at each country’s standard rate — correct for the large majority of general-merchandise stores, and nothing forces you to touch this.

When you enable it:

  1. You map your WooCommerce tax classes to goods categories (books, foodstuffs, children’s items, and so on) in the mapping UI.
  2. The plugin resolves each category to the destination country’s reduced (or super-reduced, or zero) rate from a verified, effective-dated dataset — the same maintained dataset the OSS sibling plugin uses.
  3. The rate import creates the per-class rows in the IOSS Import VAT tax class, so checkout charges the mapped rate for products in those classes.
  4. Capture stores the rate band per order line, and the return report splits each country into per-rate lines — standard and reduced amounts in their own boxes, exactly as the return asks.

Categories that resolve to the same rate in a given country merge into one line, so the report stays readable.

Country-by-country reality

Reduced rates are genuinely per-country: the same physical product can be 0% in one member state, 5.5% in another, and standard-rated in a third. The dataset handles the rates; whether your product belongs to a category is the part no dataset can decide. “Is this a book or a toy with pages?” and “is this a foodstuff or a supplement?” are classification questions member states answer differently — confirm your category mapping with your tax advisor, especially for your highest-volume products, before relying on it.

Interaction with the EUR 150 test

Rate mapping changes what VAT is charged; it does not change eligibility. The intrinsic value is a net-of-tax goods value, so a consignment is in or out of IOSS regardless of which rate band its goods fall into.

Historical accuracy

Rates are resolved as of the order date, and captured values are frozen at payment acceptance — a country changing a reduced rate mid-year does not disturb earlier months, and a mid-month change produces two lines for that country, which the return format allows.

Not tax advice

The mapping applies the rates you configure. Whether goods qualify for a reduced rate in each destination country is a legal question — verify with a qualified professional.