What is the OSS scheme?

It's the EU's VAT One Stop Shop: it lets anyone selling goods or certain digital services to consumers in other EU countries declare and pay the VAT owed to those countries through a single quarterly return, filed in their own home country, instead of registering for VAT in each one. It has applied since 1 July 2021.

What is the 10,000-euro threshold and how is it calculated?

It's the yearly limit, net of VAT, above which a business established in a single member state must charge the customer's country's VAT rate instead of its own. It's calculated by adding up distance sales of goods and digital services, such as telecommunications and electronic services, sold to consumers in other EU countries, looking at both the current year and the previous one.

What happens if my sales in Europe stay under 10,000 euros?

By default you keep charging your own country's VAT, for an Italian business that means Italian VAT, as on a domestic sale. You can still choose to voluntarily apply the customer's country's VAT even below the threshold: once made, that choice is binding for two calendar years.

What changes once I go over the 10,000-euro threshold?

The VAT owed becomes the customer's country's rate, not your own, on every sale to consumers there. To avoid registering for VAT in each member state where you sell, you can register for the OSS scheme and declare and pay all the VAT owed to the other countries through a single quarterly return.

Does holding stock in another EU country change anything?

Yes, regardless of the 10,000-euro threshold. If the goods ship from stock held in another member state instead of from Italy, that sale no longer counts as the same kind of distance sale, and it can trigger local VAT obligations in that country from the very first sale.

Is the OSS scheme the same as the IOSS?

No, they cover different situations. The OSS covers distance sales between EU countries; the IOSS covers imports of goods worth up to 150 euros shipped by suppliers outside the European Union, a case that closely affects anyone dropshipping from abroad.

BlogGuide

EU OSS VAT: the threshold that changes the rate when you sell online in Europe

14 November 2026

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The EU OSS scheme sets a 10,000-euro yearly threshold, net of VAT, above which an Italian business selling goods or certain digital services online to consumers in other EU countries must charge the customer's country's VAT instead of its own. Below that threshold, the default stays your home country's VAT. In force since 1 July 2021, the OSS scheme then lets you declare and pay the VAT owed to the other member states through a single quarterly registration, instead of opening one in each country.

What the OSS scheme is and who it's for

OSS stands for One Stop Shop. It's the tool that lets anyone selling goods or certain digital services to private consumers in other EU countries declare and pay the VAT owed to those countries without opening a VAT registration in each one. It's part of the EU's e-commerce VAT package: originally due to start on 1 January 2021, it was postponed to 1 July 2021 because of the pandemic (source: Italy's Revenue Agency, information page on the OSS scheme, checked 14 November 2026).

It only covers sales to final consumers, so-called B2C. Sales between businesses follow different rules, typically the reverse charge, and stay outside this scheme.

The 10,000-euro threshold: how it's calculated

Since 1 July 2021 there's a single threshold valid across the whole Union, replacing the earlier national thresholds, which varied from country to country. It's set at 10,000 euros a year, net of VAT, and applies to businesses established in a single member state (source: European Commission's official OSS portal, checked 14 November 2026).

The threshold adds together intra-EU distance sales of goods and digital services, such as telecommunications, broadcasting and electronic services, sold to consumers in other EU countries. The calculation looks at both the current year and the previous one: if it was exceeded the year before, it counts as already exceeded even with modest sales in the current year.

Under 10,000 euros: your home country's VAT stays the rule, with one exception

As long as sales to consumers in other EU countries stay under the threshold, an Italian business keeps charging Italian VAT, just as on a sale made to a customer in Italy. Nothing needs registering.

There is a voluntary choice, though: you can opt to charge the customer's country's VAT anyway, even while staying under the 10,000 euros. Once made, that choice is binding for two calendar years: you can't switch back partway through the year if it turns out inconvenient.

Over 10,000 euros: the VAT changes, the OSS avoids multiple VAT registrations

Once the threshold is exceeded, the rule changes: the VAT owed becomes the customer's country's rate, not your own, and that applies to every sale to consumers there. Without a tool to simplify this, it would mean opening a VAT registration in each member state where you have customers, with a local filing for each one.

The OSS scheme avoids that: anyone registered for it declares and pays all the VAT owed to the other EU countries through a single quarterly return, filed in their own home country. Registering means declaring all the transactions that fall under the scheme this way, in every country: you can't put some sales through the OSS and others through separate local VAT registrations.

What the OSS scheme doesn't cover

The OSS scheme doesn't cover everything. It leaves out sales between businesses, sales to customers in Italy, and businesses established in more than one member state or outside the European Union, for which different rules apply than the ones described here.

A case that comes up often involves holding stock of goods in another EU country, for instance through a logistics service that splits inventory across several states. If the goods ship from there instead of from Italy, that sale is no longer a distance sale in the sense this threshold covers, and it can trigger local VAT obligations in that country regardless of the 10,000 euros, even from the first sale.

It should also be kept separate from the IOSS, a different scheme covering imports of goods worth up to 150 euros shipped by suppliers outside the European Union, a situation that closely affects anyone dropshipping from a non-EU supplier, which I write about in dropshipping: what the store stays liable for.

What this actually means for anyone selling online

For anyone selling a handful of items abroad, under the 10,000-euro threshold, little changes: you keep invoicing as on a sale made in Italy. Anyone building up a regular flow of sales to other EU countries, perhaps with a site also available in another language, as I write about in multilingual website: when it is worth it and what really changes, eventually gets close to that threshold. That's the point to talk it through with whoever handles the business's tax side, before crossing it without noticing: the rule is clear in its logic, but the OSS remains an administrative choice that needs setting up correctly, not something to discover after the first complaint. Earlier still, if online selling is just getting started, it's worth clarifying whether a VAT number is already needed: I write about that in selling online without a VAT number: when you can and when you can't.

If you want to take stock of your business's digital setup, including how your site communicates prices and VAT to customers buying from abroad, that's something we can cover in the digital check-up; otherwise get in touch.