E-commerce and VAT/taxes by country - Zephyra Studio

If you sell physical products or digital services to customers in more than one country, VAT quickly stops being a simple question. This guide gives general orientation: how the EU OSS scheme works, rough VAT rates by country, and the most common mistakes sellers make. This is NOT legal or tax advice for your specific situation, only a starting point before a conversation with an accountant or tax adviser, who should confirm the exact rules before you make any decision.

When you need this guide

As soon as you sell to end consumers (B2C, not businesses) across a border within the European Union, or deliver digital services (subscriptions, software, e-books) to them, you enter territory where VAT rules depend on the customer's country, not just the country where your business is registered. This does not apply to B2B sales (business to business), where the reverse charge mechanism usually applies, nor to sales within a single country with no cross-border element.

The good news: the European Union introduced a system in 2021 that significantly simplifies this compared to the period when every country required its own separate VAT registration.

The EU OSS scheme: one registration instead of one per country

The One Stop Shop (OSS) lets you register for VAT in a SINGLE EU country and use it to declare and pay VAT for sales in every other member state, instead of registering separately in each one. The threshold is 10,000 euros per year (net, excluding VAT), calculated on the total value of cross-border B2C sales of goods and digital services combined, not per country individually.

Below the 10,000 euro threshold, a seller can generally apply their home country's VAT rate. Once the threshold is crossed, the place of taxation shifts to the customer's country, and VAT is charged at that country's rate, declared through a single quarterly OSS return covering every country you sell into. OSS covers sales of goods and services FROM one EU country TO another; it does not cover import VAT on goods arriving FROM outside the EU, which has its own system (IOSS, for consignments up to 150 euros in value).

• Threshold: 10,000 euros per year, combined across all cross-border B2C sales of goods and digital services within the EU.
• Below the threshold: the seller's home country VAT rate usually applies (with the option to opt into OSS earlier voluntarily).
• Above the threshold: the customer's country VAT rate applies, declared through a single quarterly OSS return.
• OSS covers sales FROM the EU TO the EU; imports from outside the EU go through IOSS, not OSS.

Standard VAT rates by country (EU/EEA markets)

Approximate standard rates, checked against publicly available sources (Tax Foundation, eurofiscalis, vatcalc.com) in September 2026. Rates change from time to time (Estonia went from 22% to 24% in July 2025, Slovakia from 20% to 23% during 2025), so confirm the current rate with an accountant or the country's official tax site before any decision.

• Germany (DE) 19%, Luxembourg (LU) 17%, Malta (MT) 18%, Cyprus (CY) 19%: the lowest standard rates in the EU.
• Austria (AT) 20%, France (FR) 20%, Slovenia (SI) 22%, Italy (IT) 22%: the middle group.
• Belgium (BE) 21%, Czechia (CZ) 21%, Latvia (LV) 21%, Lithuania (LT) 21%, Netherlands (NL) 21%, Spain (ES) 21%.
• Ireland (IE) 23%, Poland (PL) 23%, Portugal (PT) 23%, Slovakia (SK) 23%.
• Greece (GR) 24%, Estonia (EE) 24%.
• Croatia (HR) 25%, Denmark (DK) 25%, Sweden (SE) 25%.
• Finland (FI) 25.5%: currently the second-highest standard rate in the EU.
• Hungary (HU) 27%: the highest standard VAT rate in the EU.

Norway and Iceland: outside the EU, their own rules

Norway and Iceland are part of the European Economic Area (EEA) but NOT EU members, so the OSS scheme does not apply to them directly. Norway has a standard rate of 25% and its own simplified e-commerce scheme (VOEC), covering low-value goods (up to NOK 3,000 per item) and digital services sold to consumers, with mandatory registration after NOK 50,000 in annual turnover. Iceland has a standard rate of 24% and its own rules for foreign sellers, outside the EU's OSS/IOSS system.

Serbia: its own system, outside the European Union

Serbia is not an EU member, so the EU OSS/IOSS scheme does not apply to it either as the seller's or the customer's country. Serbia has its own VAT system: a general rate of 20%, a reduced rate of 10% for certain goods and services (basic foodstuffs, medicines, utilities, books). The mandatory VAT registration threshold is 8,000,000 RSD in turnover over the previous 12 months, with voluntary registration also possible earlier. Foreign providers of electronic services selling to end consumers in Serbia generally need to register for VAT before charging for those services.

The most common mistakes sellers make

A few patterns of mistakes repeat among sellers selling across a border for the first time, based on cases described by tax advisers who work in this area.

• Confusing the old, per-country thresholds with the new single EU-wide 10,000 euro threshold: the old system (a different threshold per country) was abolished in 2021, but the confusion still comes up.
• Mixing up OSS and IOSS: OSS is for sales FROM one EU country TO another EU country, IOSS is for IMPORTING goods from outside the EU (consignments up to 150 euros in value). These are two separate schemes for two different situations.
• Assuming goods held in local storage (e.g. a fulfilment centre in another country) count as an OSS sale: when goods are physically stored and shipped from another country, that is usually a local sale requiring a local VAT registration, not OSS.
• Incomplete evidence of the customer's location: for digital services, at least two non-contradictory pieces of evidence of the customer's location (e.g. billing address and IP address) are usually needed to justify the rate applied.
• Forgetting that the VAT threshold is calculated on TOTAL cross-border sales (goods and digital services combined), not separately per category.

Key takeaways

• The EU OSS scheme allows a single VAT registration for sales across every EU country, instead of registering per country.
• The threshold is 10,000 euros per year, combined across all cross-border B2C sales of goods and digital services within the EU.
• Standard rates in the EU range from 17% (Luxembourg) to 27% (Hungary): check the exact, current rate before deciding.
• Norway, Iceland, and Serbia sit outside the EU OSS system and have their own rules.
• This guide is general orientation, not a substitute for a review by an accountant or tax adviser before a final decision.