VAT, explained without the jargon

Value added tax is the reason European expansion is harder than it looks, and it is also completely learnable. It is a tax on consumption: you charge it on the sale, and you hand it to a tax authority. What makes it complicated for a marketplace seller is not the arithmetic but the question of which authority, and that question has two triggers.

Two triggers, and only two

1. You store goods in a country. Holding stock in a member state generally creates a registration obligation there, from the first unit. This is the trigger that catches marketplace sellers, because a fulfilment programme can move your inventory across borders.
2. You sell across borders above the threshold. Since 1 July 2021 a single EU-wide threshold of €10,000 applies to intra-EU distance sales of goods and to cross-border supplies of telecommunications, broadcasting and electronic services. Below it you may charge your home country's VAT; above it, the general rule applies and VAT is due in the customer's country.¹

Everything else — schemes, simplifications, filings — is machinery built around those two facts.

The One Stop Shop, and its limit

The One Stop Shop lets you declare and pay, through a single registration in one member state, the VAT due on cross-border sales to consumers across the Union. Instead of filing in every country your customers live in, you file one return.

Its limit is the sentence every seller needs to memorise: goods already stored in a warehouse in the EU are not covered. Nor are supplies made in a member state where you have a fixed establishment.¹ In other words, the One Stop Shop solves the sales problem, not the storage problem. If your inventory lives in three countries, you have three local registrations plus, potentially, the One Stop Shop on top for the cross-border flow.

Imports and the €150 line

Goods imported from outside the EU in a consignment not exceeding €150 can be handled through the import scheme, the Import One Stop Shop, where VAT is charged at the point of sale rather than collected at the border.¹ Above that value, normal import VAT and customs rules apply, which is lesson 6.

Two practical notes. The threshold is per consignment, not per item. And the import scheme changes when VAT is paid, not whether — there is no version of this where the tax disappears.

EORI: a different number for a different purpose

An EORI number identifies economic operators for customs purposes, and it is mandatory for the clearance of all types of customs operations. Operators established in the EU request it from their own national customs authority; operators established outside the EU apply in the country where they will carry out their first customs operation. The number is standardised across the Union, beginning with a two-letter country code.²

It is not a VAT number, does not replace one, and having one does not register you for anything else. You need it the moment goods cross the EU border in your name.

Nobody is doing this for you any more

Amazon ran a VAT registration and filing service for European sellers, and it ended on 31 October 2024. Sellers were moved to independent providers.³ The practical consequence is that registrations and periodic filings are now your arrangement with a tax firm, and the cost belongs in your plan from the first month rather than as a surprise in month four.

What is already scheduled to change

The VAT in the Digital Age package was adopted on 11 March 2025, published in the Official Journal on 25 March 2025, and entered into force on 14 April 2025, to be rolled out progressively. The dates that matter to a marketplace seller:⁴

• From 1 January 2027 — legislative clarifications affecting users of the One Stop Shop and the Import One Stop Shop.
• From 1 July 2028 — the Single VAT Registration reforms, along with a mandatory reverse charge for non-identified suppliers, and deemed supplier rules for platforms in short-term accommodation and passenger transport.
• From 1 July 2030 — digital reporting requirements for cross-border business-to-business transactions.

Single VAT Registration is the one to watch: its purpose is to reduce the number of separate registrations a business needs across member states. It does not exist yet, and planning today's operation as though it does would be a mistake — but if you are choosing between a structure that needs five registrations and one that needs two, the direction of travel is worth knowing.

Setting it up in practice

1. Register where your goods will be stored, before the goods arrive. Timelines vary by country and weeks are normal.
2. Register for the One Stop Shop in your home member state if you sell cross-border above the threshold.
3. Get an EORI number if you will import.
4. Give Amazon your VAT numbers, so the marketplace applies the right treatment and your invoices are correct.
5. Keep records that survive an audit: sales by country, stock movements between warehouses, import documents, and the settlement reports that reconcile to them. Stock movements between your own warehouses in different countries are themselves reportable events in most member states.
6. Diarise the filings. Different countries, different frequencies, different deadlines — and a missed nil return still generates a penalty notice.

Mistakes that create liabilities

• Enabling storage in a country before registering there. The obligation starts with the stock, not with the sale.
• Believing the One Stop Shop covers everything. It does not cover goods stored abroad.
• Treating an EORI number as a VAT registration. Different number, different purpose.
• Ignoring stock transfers between your own warehouses. They are reportable in most member states.
• Assuming Amazon still handles VAT services. That service ended in October 2024.
• Planning around Single VAT Registration. It is scheduled for 2028, not available now.
• Skipping nil returns. A registration with no sales still has filings.

Next

Lesson 3 is banking and getting paid: accounts that accept non-resident owners, currency conversion on European payouts, and paying suppliers inside the Union.