Since 1 July 2021, the EU has simplified VAT for businesses selling goods online to consumers in other EU countries. Above an EU-wide threshold of €10,000 in cross-border sales, you generally charge VAT at the customer’s country rate, and you can report it through a single One-Stop Shop (OSS) return. Your store must be set up to calculate and display the right VAT.
1The €10,000 Threshold
For EU-established businesses, if total cross-border B2C sales of goods and certain services to other EU countries stay below €10,000 per year, you can generally charge your home country’s VAT. Above that, VAT is due at the rate of the customer’s country.
2How the One-Stop Shop Works
Instead of registering for VAT in every country you sell to, you register for OSS in one member state and file a single quarterly return covering sales to all EU countries. The tax authority distributes the VAT to the relevant countries.
3IOSS for Imports up to €150
If you ship goods from outside the EU to EU consumers in consignments worth up to €150, the Import One-Stop Shop (IOSS) lets you collect VAT at checkout so customers do not pay unexpected fees on delivery. Non-EU sellers often need an EU intermediary to use IOSS.
4Setting Up Your Store
Shopify and WooCommerce both support EU VAT settings, often with tax apps or plugins.
- Detect the customer’s country at checkout
- Apply the correct VAT rate per country and product type
- Display VAT-inclusive prices to consumers
- Issue compliant invoices
- Export sales by country for OSS reporting
5Get Professional Advice
VAT rules depend on your location, what you sell, and where goods ship from. Work with an accountant who understands EU cross-border eCommerce. This article is general information, not legal advice. Check your obligations with a qualified adviser.
Frequently Asked Questions
What is the EU OSS?
The One-Stop Shop is a simplified VAT scheme that lets businesses report VAT on cross-border B2C sales across the EU in one quarterly return.
Do non-EU businesses need to charge EU VAT?
Often yes when selling to EU consumers. Schemes like IOSS and non-Union OSS may apply. Seek specialist advice.
Do I show prices with VAT for EU customers?
For consumers, prices are generally expected to include VAT.
Can Shopify handle EU VAT?
Shopify has built-in tax settings for the EU, and apps can help with OSS reporting. Configure them carefully with your accountant.
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