VAT for E-Commerce in Europe: The Definitive Guide

Selling online in Europe means navigating a patchwork of VAT rules across 27 EU countries (plus the UK, Switzerland, and Norway). The July 2021 e-commerce VAT reforms simplified some aspects but added new complexities.

Key changes included: • €10,000 EU-wide threshold for cross-border B2C sales • One-Stop Shop (OSS) for simplified reporting • Deemed supplier rules for marketplaces • Import One-Stop Shop (IOSS) for low-value imports • Abolition of the €22 import VAT exemption

When you sell through platforms like Amazon, eBay, or Etsy, the marketplace may be deemed the supplier for VAT purposes. This happens for: • Distance sales of imported goods up to €150 • Any sale by a non-EU seller through the marketplace

In these cases, the marketplace charges and remits VAT to the tax authorities. However, the underlying seller still has reporting obligations and may need to provide data to the marketplace.

Each EU country adds its own layer of complexity:

• Germany: Requires marketplace sellers to have a German VAT registration or tax certificate (§22f UStG) • France: Marketplaces must report seller data to French tax authorities • Italy: Mandatory e-invoicing adds compliance burden • Spain: No small business exemption — register from the first sale • Poland: SAF-T (JPK) reporting requirements

Use Taxelyo's country guides for detailed requirements.

1. Determine where your customers are (B2B vs B2C, domestic vs cross-border) 2. Calculate if you exceed the €10,000 EU threshold 3. Register for OSS if applicable 4. Set up proper invoicing with correct VAT rates per country 5. Choose accounting software that handles multi-country VAT 6. File quarterly OSS returns 7. Monitor marketplace VAT obligations 8. Use Taxelyo's Tax Health Score to check your compliance