Which rate applies to your sale
For goods sold to private customers in another EU country, the rate that applies is normally the one in the customer’s country, not yours — once your cross-border sales pass the EU-wide threshold of €10,000 per year. Below that threshold you may keep charging your domestic rate.
For sales to VAT-registered businesses in another member state, the reverse charge usually applies: you invoice without VAT and the buyer accounts for it. That only holds if you have verified the customer’s VAT number with the format checker and then in VIES, which is why validation is part of the process rather than a formality.
Standard, reduced and zero rates
Every member state sets a standard rate of at least 15%. Most also apply one or two reduced rates to specific categories such as food, books, medicines or passenger transport, and a handful keep historical super-reduced rates below 5%. The categories are not harmonised — the same product can sit at 5% in one country and 21% in another.
That is why the VAT calculator lets you pick the rate rather than guessing it from the product: the table of EU VAT rates tells you what exists in each country, and your accountant or the national tax authority tells you which one your goods fall under.
How the €10,000 threshold is actually counted
The threshold is one figure for the whole European Union, not an allowance per country. Sales of €4,000 to Germany, €4,000 to France and €3,000 to Italy total €11,000, and the limit is passed — even though no single country came close to it.
Two further details catch people out. Digital services to consumers count towards the same total as goods, so a business selling both reaches the limit sooner than it expects. And the test looks at the current calendar year and the previous one: exceeding it in either means destination rates apply now.
Crossing the line mid-year does not wait for the next quarter. From the transaction that breaks the threshold onwards, the destination country’s rate applies — that particular sale included. In practice this means watching the running total before it happens rather than discovering it in a year-end reconciliation, which is what the OSS threshold calculator is for.
Where the stock sits changes the answer
OSS follows your sales. It does not follow your inventory, and that distinction is the single most expensive misunderstanding in cross-border VAT.
Goods dispatched to a customer from a warehouse in another member state are a domestic sale in that state. They need a local VAT registration there, from the first euro, with no threshold to shelter behind. Moving your own stock across a border generally has to be reported as well, even though nothing was sold.
This is why pan-European fulfilment programmes are a tax decision before they are a logistics one. Letting a marketplace redistribute your stock to warehouses in four countries is convenient, cheap and quick — and it can quietly create four registration obligations, each with its own filing calendar and its own penalties for missing it. Which of the two routes fits your setup is the subject of OSS or local registration.
Reading
The vocabulary of this section
Frequently asked questions
No. For sales to private customers, one OSS registration in your own country covers cross-border VAT across the whole EU. A local registration becomes necessary when you hold stock in another member state, because goods dispatched from there are a domestic sale in that country rather than a cross-border one.
For the whole EU, combined. Sales of €4,000 to Germany, €4,000 to France and €3,000 to Italy add up to €11,000 and the threshold is passed, even though no single country came close to it. Digital services to consumers count towards the same total.
Destination rates apply from the transaction that breaks it, including that sale itself. There is no grace period and no waiting for the next quarter, which is why the running total is worth watching before it happens.
Usually not: the reverse charge applies and the buyer accounts for the VAT. That depends on having verified their VAT number in VIES at the time of the sale. If the number turns out to be invalid, the liability is normally yours, not theirs.