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EU VAT for e-commerce: the threshold, the one-stop shop, and what it does not cover

The 2021 European regime simplified one thing for online sellers and complicated another. The first is well known. The second costs far more to discover late.

TaxUpdated 13 October 20263 min read

The single €10,000 threshold

Since 1 July 2021 the old country-by-country thresholds have been replaced by a single threshold of €10,000 excluding VAT per year, assessed across the Union as a whole. It applies to intra-EU distance sales of goods to private customers, together with certain electronically supplied services.

Below it, the VAT of the country of departure may continue to apply. Above it, VAT is due in the country of destination, at that country's rate, on every sale.

Two points people underestimate The threshold is aggregate, not per country: all distance sales across the Union add up. And it is crossed mid-year, with the sale that crosses it already falling under the new regime. Checking once a year is not enough.

What the one-stop shop does

The OSS avoids registering for VAT in every country you sell into. The seller declares all intra-EU distance sales to their own tax administration, split by country of destination and by rate, and pays once; the administration then distributes the amounts to the states concerned.

One limit is worth knowing: the scheme is for declaring VAT due, not for recovering VAT incurred abroad. A seller with expenses in another member state has to use the refund procedure provided for that purpose.

The IOSS import scheme

The import scheme covers goods imported from outside the Union in consignments of an intrinsic value not exceeding €150, sold to private customers in the EU. It allows VAT to be collected at the point of sale and declared through a dedicated portal, instead of being charged to the customer on arrival. The old exemption for low-value consignments is gone: there is no longer a threshold below which an import escapes VAT.

Where the one-stop shop does not help at all

This is the most expensive point in the guide, and the least known.

The OSS covers selling from one country into another. It does not cover holding stock in another country.

When a seller moves their own goods into a warehouse in another EU country, the operation is treated as a transfer of goods. It generally triggers a VAT registration obligation in the country of arrival, independently of the one-stop shop, and in each country concerned.

That is exactly what turning on a pan-European storage programme does: the platform spreads stock across several countries to shorten delivery times, and every country of storage becomes a country of obligation. The decision is presented as logistics; the consequences are tax. See Amazon FBA accounting.

What to take away

  • The €10,000 threshold is aggregate and needs watching continuously, not once a year.
  • The OSS simplifies declaring distance sales, not recovering foreign VAT.
  • The IOSS covers imported consignments of an intrinsic value up to €150.
  • Stock held abroad is a separate question the one-stop shop does not settle.

Caveat This guide describes a general framework. It does not account for particular situations, for rules specific to individual member states, or for changes after the update date, and it does not replace analysis of your own file.