The UK sells more than £350 billion of goods and services to customers in Europe (Business.gov.uk). It’s not impossible, but since Brexit, a few things have changed around registering for and paying VAT across different EU countries. Read on to find out more.
What is the VAT One Stop Shop?
The VAT One Stop Shop (OSS) is an optional EU system that lets businesses declare and pay VAT on eligible sales. Instead of declaring and paying across multiple EU countries, you register and use one tax portal.
The expanded OSS replaced the narrower Mini One Stop Shop (MOSS), which previously covered limited digital services.
How Does the OSS Work?
To use the OSS, you must register through the tax authority of an eligible EU member state, not separately in every EU country. VAT is then charged according to the customer’s country. As an example, if you’re making an eligible sale to a customer in France, you’d use the applicable French VAT rate, or if it’s a German customer, the German rate.
You also need to submit a consolidated quarterly OSS return showing eligible sales and VAT owed in each country, and the registered tax authority then distributes the VAT to the relevant countries.
Returns and payments are due by the end of the following month.
There are three separate OSS schemes:
- The Union OSS covers qualifying intra-EU distance sales of goods
- The non-Union OSS covers qualifying services supplied by non-EU businesses to EU consumers
- IOSS covers eligible low-value imports (also has a monthly filing requirement, not quarterly)
Simplifying Cross-Border E-Commerce With the OSS
The main benefit for UK businesses is that trade routes to the EU remain open without overcomplicating the administration process. The time saved, reduced accounting costs, and the hassle of understanding different VAT systems are a godsend.
It’s also a lot easier for businesses to expand and sell to consumers across several EU markets without managing different VAT reporting processes for every destination.
While the scheme simplifies many aspects of paying VAT and B2C EU trade, you still don’t get one VAT number for all European transactions. Take the time to learn more about the OSS process and the benefits of using a European VAT compliance and fiscal representation service to manage VAT mapping and filings for you.
Even though the system is simpler, you still must navigate different bureaucracies and file everything error-free, which isn’t always straightforward.
Important note: You can’t reclaim VAT on business purchases through an OSS return, and you may still need local VAT registrations where you hold stock. Domestic sales also aren’t generally covered by Union OSS.
What Do UK Businesses Need to Know About Selling to the EU After Brexit
Since 1 January 2021, Great Britain has been outside the EU VAT system. Sales of goods shipped directly from Great Britain to EU consumers are imports into the EU, not intra-EU distance sales covered by Union OSS.
If you’re exporting to the EU, you can generally zero-rate for UK VAT, but you must keep the required evidence of export.
If you use IOSS for lower-value orders (qualifying consignments worth €150 or less), you collect VAT at checkout and must file monthly IOSS returns. UK businesses typically need an intermediary to register and fulfil VAT obligations when using IOSS.
There are different rules for services. Qualifying services, which include digital services, can use the non-Union OSS scheme to declare EU VAT through one member state.
Since 1 July 2026, the EU has applied a temporary €3 customs duty per tariff category on qualifying e-commerce consignments worth up to €150. Sometimes, preferential-origin imports qualify for exceptions under specific customs agreements.
You should understand the process and what has changed, but to ensure you get everything right, hiring a fiscal representative is essential. Some countries, such as France, require a representative to file VAT returns.
Terry Clark is the Publisher and Content Director of 365 Retail, with more than a decade of experience covering retail design, technology innovations, store openings and the wider retail industry. He also works closely with leading retailers, suppliers, agencies, events and industry awards across the UK.
