Cross border VAT guide

VAT on Digital Services to EU Customers: A UK Seller’s Guide to the One Stop Shop

Last reviewed 28 September 2026. Based on EU VAT rules, the European Commission’s One Stop Shop guidance and HMRC guidance.

If you are a UK business selling digital services, such as apps, software downloads, streaming, ebooks or automated online courses, to consumers in the EU, you must charge VAT at the rate of the customer’s country from your very first sale. The €10,000 allowance that EU businesses get does not apply to UK sellers. Instead of registering in every country, you can register once for the EU’s non Union One Stop Shop and file one quarterly return.

Key facts

Who it affects

UK businesses selling digital services directly to EU consumers

Threshold

None for UK sellers. EU VAT is due from the first sale

VAT rate

The rate in the customer’s EU country, from 17% in Luxembourg to 27% in Hungary

How to pay

Non Union One Stop Shop, registered in one EU country of your choice

Returns

Quarterly, in euro, due by the end of the month after the quarter

Business customers

No EU VAT charged if they give a valid EU VAT number; they reverse charge it

App stores and marketplaces

Usually the platform accounts for the VAT, not you

UK VAT

These sales are outside the scope of UK VAT

What counts as a digital service?

EU law calls them electronically supplied services: things delivered over the internet that are essentially automated, need little or no human involvement, and could not be provided without technology. Telecoms and broadcasting services follow the same rules.

Consumers or businesses?

If a customer does not give you a VAT number, treat the sale as going to a consumer.

Why there is no threshold for UK sellers

Since 2021, EU businesses have been allowed to charge their own country’s VAT on cross border digital sales until those sales reach €10,000 a year. That allowance only applies to businesses established in a single EU country. UK businesses have not been part of the EU VAT system since Brexit, so they get no threshold: EU VAT is due from the first euro of sales to EU consumers.

The non Union One Stop Shop

Rather than register for VAT in every EU country you sell to, you can register for the non Union One Stop Shop (OSS) in one EU country and report all your EU digital sales on a single return. Many UK businesses choose Ireland because the tax authority works in English.

Who can use it

Any business that is not established in the EU and has no fixed establishment there, selling services to consumers in the EU. Having an EU VAT registration for something else, such as holding stock in an EU warehouse, does not stop you using it. If you do have an EU branch or office, you use the Union scheme instead.

Registering

1. Register online with the tax authority of the EU country you choose. In Ireland, that is through Revenue’s online service.
2. Registration normally starts on the first day of the next calendar quarter. If you have already started selling, it can start from your first sale as long as you register by the 10th day of the month after that sale.
3. It is all or nothing: once registered, every sale covered by the scheme goes through it.

Returns and payment

• File a return every quarter, showing sales and VAT for each EU country, in euro. File a nil return if you had no EU sales.
• The return and the payment are due by the end of the month after the quarter. There is no extension when that falls on a weekend or holiday, so file early.
• Convert other currencies using the European Central Bank rate on the last day of the quarter.
• Pay using the reference on your return. The payment counts as made when it reaches the tax authority’s account.
• Correct mistakes in a later return, within three years of the original due date.

Records, penalties and costs

• Keep records of every EU sale for 10 years from the end of the year of the sale.
• Miss three returns or three payments in a row and you can be excluded from the scheme for two years, leaving you to register separately in each country.
• Late payment penalties and interest are set by each customer’s country, not by the scheme.
• You cannot reclaim EU VAT on your own costs through the OSS return. Non EU businesses claim it back country by country under the EU refund procedure for non EU businesses.

Proving where your customer is

You need two pieces of evidence that agree about the customer’s country, such as:

• the billing address;
• the IP address of the device they bought on;
• the location of their bank or card issuer;
• the country code of their mobile SIM;
• the location of their fixed landline.

EU businesses with small sales can sometimes rely on one piece of evidence, but that simplification does not apply to UK sellers. Most payment platforms and checkout tools collect this information for you; make sure you can get it back out if the tax authority asks.

Selling through app stores and marketplaces

When you sell through a platform that sets the terms, handles the payment or delivers the service, such as a major app store, the platform is normally treated as the seller for VAT and charges the EU VAT itself. Apps sold through the Apple App Store or Google Play and ebooks sold through large online stores usually fall into this category. You then report only what the platform pays you. Check each platform’s terms to confirm it is acting as the seller. Sales from your own website remain your responsibility.

Northern Ireland businesses

Although Northern Ireland follows EU VAT rules for goods, services are taxed under UK rules across the whole of the UK. A Northern Ireland business selling digital services to EU consumers is in the same position as one in Great Britain: no threshold, and the non Union scheme.

What goes on your UK VAT return?

Digital services sold to EU consumers are taxed in the EU, so they are outside the scope of UK VAT. If you are UK VAT registered, include the value of the sales, excluding VAT, in box 6 and put nothing in box 1. Because they are not UK taxable sales, they do not count towards the UK’s £90,000 registration threshold; our VAT threshold tracker covers what does. The rule works in reverse too: an EU business selling digital services to UK consumers has to register for UK VAT from its first sale.

Selling physical goods to EU customers is covered separately in our guide to VAT for Amazon and marketplace sellers. Buying software from overseas suppliers for your own business is covered in reverse charge VAT on overseas software and ads.

EU standard VAT rates in 2026

Several of these rose recently: Finland to 25.5% in September 2024, Slovakia to 23% in January 2025, Estonia to 24% in July 2025 and Romania to 21% in August 2025. Many countries also apply reduced rates to ebooks and other electronic publications, so check the rate for your product before you set prices.

What is changing

The EU’s “VAT in the Digital Age” package brings changes in stages. Small clarifications to the One Stop Shop take effect on 1 January 2027. From 1 July 2028 there are wider reforms, including new platform rules for short term accommodation and passenger transport and steps towards a single EU VAT registration. None of these removes the rule that UK sellers must charge EU VAT from the first sale.

1. 1 January 2027OSS clarificationsSmall changes to how the One Stop Shop works
2. 1 July 2028Wider reformsPlatform rules for short term accommodation and passenger transport, and steps towards a single EU VAT registration

Frequently asked questions

Need to work out VAT on a UK sale? Use our VAT calculator or the invoice VAT calculator. To check a UK business customer’s VAT number, try our VAT number checker.

Sources: European Commission, VAT One Stop Shop; European Commission, VAT rates; VIES VAT number validation; HMRC, VAT Notice 741A. This page is general information, not tax advice.