Short answer: if your business is based in the EU, you charge your own country's VAT on sales to consumers in other EU countries until those sales pass €10,000 in a calendar year. Above that, you charge the VAT rate of each customer's country. The One Stop Shop (OSS) lets you report and pay all of it in one quarterly return from your home country, instead of registering for VAT in every country you sell to.

Who the rule is for

The €10,000 threshold applies to sellers established in a single EU country who sell to consumers (not businesses) in other EU countries. It covers two kinds of sale:

goods you ship from your own EU country to a consumer in another EU country, and
digital services sold to consumers in other EU countries, such as downloads, software, online courses and streaming.

It comes from the EU VAT Directive (Article 58, as changed by Directive (EU) 2017/2455), and has applied since July 2021.

How the €10,000 is counted

This is where most sellers get it wrong.

It is one total across the whole EU, not €10,000 per country. €4,000 to France, €3,500 to Germany and €3,000 to Spain is €10,500. You are over.
It covers the current and the previous calendar year. If you passed it last year, you are over this year from 1 January.
Only cross-border sales to consumers count. Sales in your own country, and sales to VAT-registered businesses (which fall under the reverse charge), are left out.
Once you pass it, the change is immediate. The sale that takes you over €10,000 is already taxed at the customer's country's rate. You do not wait until the next year.

You can also choose to charge each customer's country's VAT before you reach the threshold, which some sellers do to keep one system from day one. That choice locks you in for at least two calendar years.

How the One Stop Shop works

You register for OSS in your own EU country, once.
You charge each customer the VAT rate of their country.
Every quarter you file one OSS return listing your sales by country and rate, and pay the total, in euros, by the end of the month after the quarter ends.
Your home tax office passes the VAT on to each country.

A nil return is still due for any quarter with no sales, and corrections to an earlier quarter go on a later return rather than an amended one. Our EU One Stop Shop Guide has the detail, with the sources for each rule.

If your business is outside the EU

The €10,000 threshold does not help you. Non-EU sellers generally charge the customer's country's VAT from the first sale. Digital services are usually reported through the non-Union OSS scheme, and imported goods in parcels worth up to €150 through the Import One Stop Shop (IOSS). Marketplaces such as Amazon can also be responsible for the VAT on some of your sales. Our cross-border VAT and GST Guide covers how the pieces fit together.

Four mistakes we see most

Counting the €10,000 per country instead of across the EU.
Forgetting that last year's sales count too.
Skipping nil returns in quiet quarters.
Charging your own country's rate after you have crossed the threshold, then having to correct a quarter's worth of sales.

Questions people ask us

Do sales to business customers count towards the €10,000?

No. Sales to VAT-registered businesses in other EU countries usually fall under the reverse charge, so the business accounts for the VAT and those sales are left out of the total.

Do I still need to register for VAT in each country if I use OSS?

Not for these sales. OSS replaces those registrations for cross-border consumer sales. You may still need a local registration for other reasons, such as holding stock in a warehouse in another country.

What about selling to customers in the US?

That is US sales tax, which works state by state with its own thresholds. Our US sales tax Guide shows where you must register.

Want this handled for you?

This is what we do for online sellers selling into other countries: we work out where you must register, file the OSS and VAT returns, and reconcile your books to your Shopify, Amazon and Stripe payouts. AI does the routine work and an accountant is responsible for it. Book a free 30-minute call.

General information, not advice on your situation. VAT rules change and depend on your facts; check your position with a qualified professional before you file or pay.