Since 1 July 2021, the EU has run a unified VAT regime for B2C cross-border sales of goods. For UK e-commerce sellers, post-Brexit, this reshaped the compliance map completely: the old distance-selling thresholds are gone, the €22 low-value consignment relief is gone, and UK businesses are now "non-Union" third-country sellers for every EU sale.
The Three Schemes
| Scheme | Used For | Filing |
|---|---|---|
| Union OSS | B2C sales of goods from stock held in one EU country to consumers in another EU country. Requires an EU establishment or EU-held stock. | Quarterly, single return |
| Non-Union OSS | B2C sales of services by non-EU sellers to EU consumers. Not for goods. | Quarterly, single return |
| IOSS | Goods shipped from outside the EU to EU consumers in consignments up to €150. | Monthly, single return |
The threshold does not apply to UK sellers
This is the single biggest misconception we see on UK e-commerce accounts. The €10,000 pan-EU distance-selling threshold, below which a seller can charge their home-country VAT rate, is only available to businesses established in the EU. A seller established only in Great Britain does not qualify; Northern Ireland goods need a separate assessment.
For goods sent from Great Britain, establish whether VAT is collected through IOSS, by the marketplace or on import. IOSS is optional for eligible non-excise consignments and Great Britain sellers normally need an EU-established intermediary. Above its limit, agree the ordinary import arrangements.
How to work out what applies to you
Scenario A, You ship direct from the UK
Low-value orders (<= €150): register for IOSS through a single member state, quote the IOSS number on the customs declaration, charge destination VAT at checkout. IOSS deals with VAT; from 1 July 2026 the separate €3 customs duty must also be allowed for. Agree the declaration and delivery charges with the carrier.
Above €150, IOSS cannot be used. Agree the importer, customs declaration, import VAT and any duty under the delivery terms. The buyer is not automatically the importer; seller-arranged import clearance and EU fulfilment are possible alternatives.
Scenario B, You hold stock in one EU country (e.g. Amazon FBA Germany)
You need a local VAT registration in Germany because you are now storing goods there. For sales from that German stock to consumers in any other EU country, you can register for Union OSS in Germany and file a single quarterly return covering all 27 destinations. Sales to German consumers remain on the German return.
Scenario C, FBA Pan-EU (stock in multiple countries)
You need a local VAT registration in every country where Amazon stores your stock, typically some subset of Germany, France, Italy, Spain, Poland, Czechia. Intra-community stock movements between those warehouses must be declared on each country's VAT return. Union OSS still covers cross-border B2C sales to consumers in other EU countries, but the local registrations are non-negotiable.
Scenario D, All your EU sales go through Amazon
Under the Marketplace Deemed Supplier rules, Amazon is treated as the supplier for (i) imports into the EU up to €150, and (ii) sales from EU warehouses by non-EU sellers. Amazon collects and remits the VAT. You still need local registrations wherever stock is held, you still need to account for these sales in your UK books, and you still need to file the local returns, but the VAT collection side moves to Amazon.
How Marketplace Deemed Supplier Changes Your Records
When Amazon is the deemed supplier, your payout report shows the sale net of the VAT Amazon collected. Your UK accounts need to reflect that:
- The gross sale belongs in revenue at the price the customer paid, net of the VAT Amazon withheld, the marketplace has already discharged the VAT liability for you.
- The cost of the goods still needs to be recognised, see our inventory & COGS guide.
- Inbound stock movements into EU warehouses are still your movements and need declaring on local returns.
- Your UK VAT return should exclude these sales, they are outside UK VAT.
Common Errors
- Treating EU sales as UK-VAT zero-rated exports. They are not UK-VAT sales. This corrupts Box 6 and Box 8 on the UK VAT return and can trigger an HMRC enquiry.
- Registering for IOSS and charging destination VAT, but also charging UK VAT at checkout. Double taxation. The customer ends up paying 40%+ and your refund rate explodes.
- Enrolling into FBA Pan-EU without understanding the VAT registration footprint. Three weeks later, an Amazon warehouse in Poland holds your stock and you have a Polish VAT registration obligation you didn't know existed.
- Assuming Amazon handles everything. Amazon handles the VAT collection where it is the deemed supplier. It does not handle your local registrations, your Intrastat, your EC Sales List equivalents, or your UK corporation tax accounting.
FAQs
Does the €10,000 EU distance-selling threshold apply to UK sellers?
For a seller established only in Great Britain, the EU €10,000 threshold does not apply. The VAT treatment depends on where goods start, the importer, the marketplace and any scheme used. Northern Ireland has separate goods rules.
What is the difference between OSS and IOSS?
OSS (One Stop Shop) is for goods that are already in the EU at the point of sale, typically stock held in an EU warehouse such as FBA EU. IOSS (Import One Stop Shop) is for low-value goods (consignments up to €150) shipped directly from outside the EU to EU consumers. Both schemes let you file a single quarterly or monthly return rather than registering in every member state.
Does Amazon handle all my EU VAT?
Partly. Under the EU Marketplace Deemed Supplier rules, Amazon collects and remits VAT on imports under €150 and on sales by non-EU sellers from EU warehouses. You still need to account for these sales correctly in your UK books, and if you hold stock in multiple EU countries you may still need local registrations for intra-community movements.
Can I use IOSS if I ship from a UK warehouse?
For eligible non-excise consignments sent from Great Britain with intrinsic value no more than €150, IOSS can collect destination VAT at checkout. The separate €3 customs duty applies from 1 July 2026. Above €150, use ordinary import arrangements and agree who is importer; the customer is not automatically responsible.