Selling in several EU countries: OSS VAT explained for online stores

The first orders from another EU country feel like pure upside. Then the questions start: whose VAT do you charge, which rate goes on the invoice, what currency is it in, and who gets the money? The EU’s One-Stop Shop (OSS) answers most of them, but only if your store, your invoices and your books all tell the same story.

This article walks through how OSS works for an online store selling goods to consumers, and the practical details that decide whether the numbers line up at the end of the quarter.

The €10,000 threshold

Since 1 July 2021, distance sales of goods to consumers in other EU countries follow one rule: once your cross-border B2C sales in the EU exceed €10,000 in a calendar year, you charge the VAT of the customer’s country, not your own.

A few points that often surprise merchants:

• The €10,000 is one EU-wide total, not per country. Ten orders to Germany and ten to Italy count together.
• It includes certain cross-border digital services too, if you sell them.
• Below the threshold you may keep charging your home VAT, but you can also opt in to destination VAT earlier.
• Once you cross the threshold during the year, destination VAT applies from the sale that crosses it.

For a store growing across Europe, it’s usually safer to plan for destination VAT from the start.

What the One-Stop Shop changes

Charging German VAT on a German order used to mean registering for VAT in Germany. OSS removes that: you register once, in your own country, and declare all your EU cross-border B2C sales in one quarterly OSS return, with one payment. Your tax authority passes each country’s share on.

What OSS does not change:

• Each country’s rates still apply: 19% in Germany, 20% in Austria, 21% in Belgium, 23% in Poland, and so on. Reduced rates also follow the destination country.
• Your domestic sales are still declared in your normal VAT return.
• B2B sales to a customer with a valid EU VAT number usually fall under the reverse charge: no VAT on the invoice, and a legal mention instead.
• Exports outside the EU are normally zero-rated, with proof of export.
• Imported low-value consignments (up to €150) have their own scheme, IOSS. It’s separate from OSS.

Where the rate comes from

At checkout, Shopify can charge the destination country’s VAT once you’ve set up your tax settings for OSS. That’s the price the customer paid. The invoice has to match it exactly, with the same rate and the same amount of VAT, or your books and your OSS return will disagree with what customers were charged.

The problem is that the invoice is often produced somewhere else: an invoicing app or accounting software with its own VAT settings, frequently set up once for domestic sales. A single default rate stamped on every invoice is one of the easiest OSS mistakes to make, and one of the hardest to spot.

The shipping country decides

For distance sales of goods, the VAT country is where the goods arrive: the shipping address, not the billing address. A customer with a billing address in your country who ships to Poland is a Polish OSS sale.

This matters on the invoice too. If the invoice shows the billing address in your own country, your systems (or your national e-invoicing platform) may treat it as a domestic sale, even though the customer paid Polish VAT. When the shipping and billing countries differ, the document should follow the shipping country.

Exchange rates

OSS returns are filed in euros. If you invoice in another currency, or sell in euros while keeping your books in a national currency, two conversions matter:

• On the invoice, the VAT amount usually has to be stated in your national currency, at the exchange rate your country’s rules require. For a Romanian company, for example, invoices use the National Bank of Romania reference rate published before the invoice date.
• On the OSS return, amounts are converted to euros at the European Central Bank rate for the last day of the quarter.

Record the rate on each invoice. When a figure looks off months later, the rate printed on the document is the only reliable answer.

Common mistakes

• One VAT rate for every invoice. The store charged 23%, the invoice says 21%.
• Billing address instead of shipping address. A cross-border sale gets reported as domestic.
• OSS switched on in one system but not the other. Shopify charges destination VAT, the invoicing tool doesn’t know, or the other way round.
• Stale rates. Countries change VAT rates; a rate table copied once goes out of date.
• No record of exchange rates. Nobody can explain the VAT figure in national currency.

How Opvelo handles it

In Get Paid & Know Your Numbers, cross-border sales are invoiced with the destination country’s VAT under the EU OSS scheme, at official exchange rates. Specifically:

• The rate comes from the order. Opvelo reads the tax Shopify actually charged and puts that rate on the invoice, mapped to the matching VAT type in your invoicing software.
• Mismatches are flagged, not invoiced silently. If the rate on an order doesn’t match what’s expected for the destination country, for example because OSS is on in one place and off in another, you’re alerted instead of getting a wrong fiscal document.
• The invoice follows the shipping country for OSS sales, so a cross-border sale isn’t filed as a domestic one.
• Exports and B2B are handled with the zero-rate cases they need.
• VAT views show your sales as the business runs, and a clean export goes to your accountant.

Opvelo prepares correct invoices and the data behind them. Filing the quarterly OSS return stays with you or your accountant.

Before you switch on OSS

1. Check your cross-border B2C total for the year so far.
2. Register for OSS with your tax authority.
3. Set up Shopify’s taxes to charge destination VAT.
4. Make sure your invoicing tool knows every EU rate you’ll use, and uses the shipping country.
5. Decide who prepares the quarterly return, and from which data.

This article is general information, not tax advice. Rates and national rules change; confirm the details with your accountant.