Selling goods or services across EU borders triggers a set of VAT rules that differ significantly from purely domestic trade. This guide explains the most important rules every business needs to understand before trading internationally within the EU.
When a VAT-registered business in one EU country sells services to a VAT-registered business in another EU country, the general rule is that no VAT is charged by the supplier. Instead, the buyer "self-accounts" for VAT in their own country using the reverse charge mechanism — they declare both the output VAT and the input VAT on the same return, which usually nets to zero for fully taxable businesses.
The key practical requirement: you must confirm your customer is VAT-registered before issuing a VAT-free invoice. Use the VIES system — or our free VAT number checker — to verify every time.
An intra-community supply occurs when goods are physically transported from one EU country to another as part of a sale between two VAT-registered businesses. The seller can zero-rate the supply (charge 0% VAT) if four conditions are met: the seller is VAT-registered; the buyer is VAT-registered in another EU country; the goods actually leave the seller's country; and the seller holds adequate proof of transport.
The corresponding transaction for the buyer is an intra-community acquisition, on which they account for VAT in their own country at the local rate. Both must be reported on EC Sales Lists and VAT returns.
When selling goods online to consumers in other EU countries, different rules apply. Since July 2021, an EU-wide threshold of €10,000 applies: once your total cross-border B2C sales across all EU countries exceed €10,000 in a calendar year, you must charge VAT at the rate of the consumer's country.
The OSS (One Stop Shop) scheme was introduced to handle this without requiring registration in every EU country. By registering for OSS in one member state, you file a single quarterly return covering all EU B2C sales. The OSS country distributes the VAT revenue to the relevant member states.
For B2C digital services, VAT is always due in the consumer's country regardless of where the supplier is based. This rule applies even to non-EU suppliers — a US company selling software subscriptions to German consumers must charge German VAT. For B2B digital services, the reverse charge applies as normal.
Since July 2021, the previous €22 import VAT exemption for low-value parcels was abolished. All goods imported into the EU are now subject to VAT from the first euro. Non-EU sellers can use the IOSS (Import One Stop Shop) scheme to pre-collect and remit import VAT, resulting in faster customs clearance and a better customer experience.
Always verify your B2B customer's VAT number before issuing a zero-rated invoice — VAT-Scan makes this instant and free. Retain proof of transport for all intra-community goods supplies. Keep records of where your services are consumed. And review your OSS position regularly as your sales volumes grow.
For full definitions of EU VAT terms, see our VAT Glossary. For country-specific VAT rates, see our EU VAT Rates table.