EU VAT Compliance for E-commerce Sellers

Since the EU VAT reform of July 2021, e-commerce sellers shipping into the EU face a unified set of obligations that replaced the old country-by-country distance selling thresholds.

The €10,000 Threshold

If your total annual sales to EU customers (across all 27 member states) exceed €10,000, you must charge VAT at the destination country's rate — not the rate in your country of origin.

Below €10,000/year, you can continue charging your home country's VAT rate (if you're in the EU) or no VAT (if you're outside the EU and the goods are under the €150 import threshold).

One-Stop Shop (OSS)

Rather than registering for VAT in each of the 27 member states, EU-based sellers can register for the OSS scheme in a single member state and file a single quarterly return covering all EU sales. Non-EU sellers can use the Non-Union OSS (or IOSS for low-value goods).

Import One-Stop Shop (IOSS) for Sub-€150 Shipments

If you're shipping individual parcels valued under €150 (CIF) to EU consumers:

With IOSS: Collect VAT at checkout, remit via monthly IOSS return. Goods clear customs without import VAT at the border.

Without IOSS: The carrier collects VAT from the recipient at delivery. Creates friction and cart abandonment.

Marketplaces like Amazon EU, eBay, and ASOS are deemed suppliers and handle IOSS for marketplace sales. Direct D2C sellers must register themselves.

Key EU VAT Rates by Country (2026)

CountryStandard VATReduced VAT

|---|---|---|

Germany19%7%France20%5.5% / 10%Netherlands21%9%Poland23%5% / 8%Sweden25%6% / 12%

Action Checklist for Non-EU Sellers

[ ] Calculate trailing 12-month EU sales to determine if you exceed €10,000

[ ] Register for IOSS if selling B2C parcels under €150 directly (not via marketplace)

[ ] Update checkout to apply destination-country VAT rates

[ ] Ensure customs invoices show IOSS number (format: IM + 10 digits)

[ ] Review product-specific reduced-rate eligibility (food, books, medicines often have reduced rates)