How EU VAT works for a UK business
Four questions decide your EU VAT position. Are you selling goods or services? To businesses or consumers? From Great Britain or Northern Ireland? And what is the order worth? The table covers the common cases, and our EU VAT rates table lists the rates for all 27 countries.
| What you sell | Who buys | UK VAT | EU VAT | What you need |
|---|---|---|---|---|
| Goods from GB | EU business | 0% export | Customer pays import VAT | GB EORI, export evidence |
| Goods from GB, up to €150 | EU consumer | 0% export | You charge at checkout via IOSS | IOSS number (through an EU intermediary) |
| Goods from GB, over €150 | EU consumer | 0% export | Import VAT at the border | DAP, or DDP with an EU VAT registration |
| Services | EU business | Outside the scope | Customer reverse charges | Customer's VAT number on file |
| Digital services | EU consumer | Outside the scope | You charge the customer's country rate | Non-Union OSS registration |
| Goods from NI | EU business or consumer | EU rules for goods | As an EU seller | XI VAT number, Union OSS if over €10,000 |
Standard rates differ by country, from 17% in Luxembourg to 27% in Hungary.
How do you sell goods to EU businesses
You zero-rate the sale as an export on your UK VAT return, as long as you hold evidence the goods left the UK. That usually means commercial documents and proof of shipment within three months. Your customer pays import VAT and any duty, then normally reclaims the VAT.
HMRC sets out what counts as evidence in Notice 703 on exporting goods. A German buyer pays import VAT at the German rate, a French buyer at the French rate. You need a GB EORI number to export, and your customer needs an EU EORI number to import.
DAP or DDP
The incoterm (the delivery term in your contract) decides who deals with the import.
- DAP (Delivered at Place): the customer clears customs and pays the import VAT and duty. It is simple for you, but the buyer can get a surprise bill at the door.
- DDP (Delivered Duty Paid): you clear customs and pay. In most EU countries that means you must register for VAT there, or appoint a representative, so you can reclaim it.
For B2B sales, DAP is the usual choice. Only offer DDP if you are ready to take on a foreign VAT registration.
How do you sell goods to EU consumers
There is no threshold for UK sellers shipping from Great Britain. For consignments up to €150, you charge VAT at the customer's country rate at checkout through IOSS. Over €150, the customer pays import VAT on delivery, or you register in their country.
The €10,000 EU distance selling threshold is only for businesses established in the EU.
Consignments up to €150: register for the Import One Stop Shop (IOSS). The parcel clears customs without a VAT bill, and you pay the VAT through one monthly IOSS return. UK businesses must appoint an EU-based intermediary to register. If you sell through a marketplace, the marketplace usually collects the VAT instead.
Consignments over €150: IOSS does not apply. Either the customer pays import VAT and duty on delivery (DAP), or you register in the destination country and handle it yourself (DDP).
Customs duty on low-value parcels changed on 1 July 2026. The €150 duty exemption has ended and a flat €3 applies per item (per tariff line). Our guide to EU low-value imports has the detail.
Worked example
Say you sell a jacket priced at €100 before VAT to a consumer in France, in one parcel from Great Britain. It is under €150, so you charge French VAT at 20% through IOSS: €100 × 20% = €20. The customer pays €120 at checkout and no VAT on delivery.
You pay the €20 to France on your monthly IOSS return. On your UK return the sale is a zero-rated export. The flat €3 customs duty per item is a separate charge.
How do you charge for services to EU businesses
You charge no UK VAT on most business-to-business services to EU customers. The place of supply is where the customer belongs, so the customer accounts for VAT in their own country under the reverse charge. You record the net value in box 6 of your UK return.
Under the reverse charge, the customer works out the VAT and declares it on their own return. If your client is a VAT-registered business in Ireland, they account for Irish VAT at the Irish rate. Your invoice should show:
- the customer's EU VAT number
- no VAT charged
- a line such as "Reverse charge: customer to account for VAT"
Check the customer's VAT number on the EU's VIES service and keep a record. Some services have their own rules (land, events, passenger transport), so check those first.
Do you charge VAT on digital services to EU consumers
Yes. E-services, telecoms and broadcasting sold to EU consumers are taxed where the customer lives, from the first euro, with no threshold for UK sellers. You can register for the non-Union OSS in one EU country instead of registering in every country, then file one quarterly return.
That covers software downloads, apps, streaming, e-books and automated online courses. You charge each customer their own country's rate. You need two pieces of evidence of where the customer is, such as billing address, IP address or bank country.
How is Northern Ireland different
Northern Ireland follows EU VAT rules for goods under the Windsor Framework, so NI businesses use an XI prefix for goods trade with the EU. Goods moving between NI and the EU are not exports or imports. Services from NI follow the UK rules above.
B2B sales of goods are intra-EU supplies, zero-rated with the customer's VAT number. B2C sales follow the EU distance selling rules. Once your EU-wide consumer sales pass €10,000 (about £8,818), you charge VAT in the customer's country. You usually do this through the Union OSS, which you can register for through HMRC.
How does it work for EU sellers into the UK
The UK runs the mirror image. For consignments of £135 or less sold to UK consumers, the seller charges UK VAT at the point of sale instead of at the border. Over £135, import VAT and duty are collected at the border.
Below £135, the seller registers for UK VAT from the first sale, unless an online marketplace collects it. See HMRC's guide to VAT and overseas goods sold directly to customers in the UK. Our VAT calculator adds or removes 20% for UK prices.
What to do next
- Find the rows in the table above that match how you sell.
- Check each EU business customer's VAT number on VIES before you invoice without VAT.
- If you send consumer parcels up to €150, appoint an IOSS intermediary or sell through a marketplace that collects the VAT.
- Load each country's rate into your checkout from our EU VAT rates table.
This is general guidance. Check gov.uk or ask an accountant about your own case.
Questions
Do UK businesses charge VAT on sales to the EU?
Usually not UK VAT. Goods exported from Great Britain are zero-rated, and most services to EU businesses are outside the scope of UK VAT. You may have to charge EU VAT on sales to consumers, through IOSS or OSS.
Do I need an EU VAT number?
Not for B2B goods sold on DAP terms or for B2B services under the reverse charge. Most sales to consumers need an IOSS or OSS registration, or a local VAT number. Shipping DDP over €150 needs a local VAT number.
Is there a threshold for selling digital services to the EU?
No, not for UK sellers. EU VAT is due from the first sale to a consumer. The €10,000 threshold only helps businesses established in the EU, including Northern Ireland for goods.
What is IOSS?
The Import One Stop Shop lets you charge EU VAT at checkout on consignments up to €150. You pay it through one monthly return, so customers get no VAT bill on delivery. UK businesses need an EU intermediary to join.
Does Northern Ireland follow EU VAT rules?
For goods, yes. NI businesses use an XI VAT number and the EU rules for goods trade with EU countries. For services, NI follows UK rules.
Figures in this guide come from our rules file, last checked against HMRC on 4 October 2026.
