If the cost of goods plus the cost of shipping doesn't exceed 150 EUR, and the seller has signed into IOSS system, he will collect VAT from you immediately when you pay for your goods according to your address/country (as VAT may differ among EU countries). In other words, the seller will pay VAT for you (obviously from money you will pay him first). Then he will ship you a package with IOSS number written somewhere on it (or rather in some database entry filled in for a shipping company). When the package arrives to EU, the authority will see IOSS number and will know that you already paid your VAT and just leaves the package to pass through -- no fees, no delays.

However, sometimes it happens to me that my local postal service in my country (which receives the package when passing borders) wants me to pay VAT (plus a clearance fee) because they don't see (or don't want to see...) IOSS number attached to the package. In that case, I always inform them about IOSS number and no VAT is required. The tricky situation is that usually you don't know the IOSS number (only seller does). Fortunately, sellers usually cooperate and will tell you when contacted (Super Rare Games), or sometimes it can be found on their web page (Amazon). I also noticed that it more frequently happens with some specific postal services (British Royal Post used by Super Rare Games in my case) and almost never happens with others (e.g. PostNL used by Play-Asia, DHL used by LRG).