E-commerce
VAT and online shops: how it works today
While you sell inside your own borders it is simple. The moment you ship to a customer in another country, VAT changes the rules. Here is what you need to know, without the waffle.
Selling online across borders changes how VAT works. Up to €10,000 a year of sales to private customers in the EU you charge your own country's VAT; above that threshold you charge the customer's country's VAT. To avoid registering in every member state there is the OSS one-stop shop. Imports from outside the EU have rules of their own.
This guide is written from the point of view of a business selling from Italy within the EU.
While you are selling to customers at home, VAT gives you no trouble: it is the same as ever. Things change the moment a parcel leaves for a customer in another European country, or when goods arrive from outside Europe. That is where rules written specifically for online trade come into play, and it is better to know them than to be sorting things out afterwards.
The moment a parcel leaves for another country, VAT changes the rules: better to know them first.
This article is a general guide: it gives you the map, it does not replace your accountant. Real situations always need checking with whoever keeps your books.
The €10,000 threshold
The starting point is a single European threshold for sales to private customers in other EU countries: €10,000 a year. It is the line that decides which VAT you charge.
- Below €10,000: you charge your own country's VAT.
- Above €10,000: you charge the VAT of the customer's country.
Watch one detail that makes all the difference: the threshold is cumulative across the whole Union, not per country. It is not ten thousand to France plus another ten thousand to Germany: it is the total of your sales to private customers across every EU country put together. Add that total up, and once it passes ten thousand the destination country's rules kick in.
OSS: one return instead of 27
The obvious question follows: if I have to charge every country's VAT, do I have to register in all of them? No. There is a tool designed precisely to avoid that: the OSS (One Stop Shop).
With OSS you register once and, with a single periodic return, pay the VAT owed across every EU country. One registration, one return, instead of chasing twenty-seven different tax authorities. It is how Europe made manageable something that would otherwise be unmanageable for anyone selling online.
IOSS: imports under €150
Goods arriving from outside the Union are a different case. Here the IOSS (Import One Stop Shop) comes in, covering imported goods up to €150.
And there is one important thing to know, because plenty of people still assume otherwise: the old VAT exemption on parcels up to €22 no longer exists. Today every imported item carries VAT, with no exception for small amounts. The few-euro packet that once came in duty-free is gone.
Marketplaces pay it for you (in certain cases)
If you sell through large platforms like Amazon or eBay, there is an extra mechanism. In certain situations — particularly where the seller is outside the EU — the platform itself can be treated as the «supplier» for VAT purposes, and therefore carry the tax instead of the seller. It is not a blanket rule: it depends on the case, and it is one of the points where it pays to have your specific situation explained properly.
| Scheme | What it covers | Threshold | What it saves you |
|---|---|---|---|
| Below threshold | Sales to EU private customers | Up to €10,000 a year | You charge your own VAT, nothing to register |
| OSS | Sales to private customers in other EU countries | Over €10,000 a year | Registering for VAT in every country |
| IOSS | Goods imported from outside the EU | Up to €150 per consignment | VAT collected from the customer at customs |
What changes in the coming years: ViDA
The picture is not standing still. In March 2025 the Union adopted the ViDA package («VAT in the Digital Age»), bringing in gradual changes through to 2035. The main milestones:
- 2027: clarifications on OSS and IOSS.
- 2028: single VAT registration extended, and new rules for platforms.
- 2030: e-invoicing and digital reporting for cross-border B2B transactions.
- Abolition of the €150 threshold on imports.
None of this needs sorting today, but it is worth knowing the direction of travel: an increasingly single, increasingly digital system. Anyone selling online would do well to keep an eye on these as they approach.
To sum up: the €10,000 threshold decides which VAT you charge inside the EU, OSS saves you registering everywhere, IOSS governs imports up to €150, and the old exemption under €22 is history. For everything else, and for your own particular case, talk to your accountant: this is the map, not the territory. If you have yet to open the shop at all, have a look at websites and e-commerce.
- Up to €10,000 a year of sales to EU private customers you charge your own VAT; above that, the customer's country's.
- The OSS one-stop shop handles it all with one registration and one return, with no need to register everywhere.
- IOSS covers imports up to €150, and the exemption on parcels under €22 no longer exists.
Frequently asked questions
Do I have to register for VAT in every country I sell to?
No. There is the OSS one-stop shop: you register once and, with a single periodic return, pay the VAT owed across every EU country, without registering in each one.
Is there a threshold below which I charge my own VAT?
Yes. While sales to private customers in other EU countries stay under €10,000 a year, you charge your own country's VAT. Past the threshold, the customer's country's VAT applies. The threshold is cumulative across the whole EU, not per country.
Does the exemption on parcels under €22 still exist?
No, it was abolished. Today every imported item carries VAT, with none of the old exemption for small amounts.