Complete guide to EU e-commerce VAT: everything an Italian seller needs to know

Selling in Europe as an e-commerce seller has, since 1 July 2021, become an activity with significantly different VAT obligations compared to the past. The reforms introduced with the “VAT in e-commerce” package changed the rules for millions of European sellers: new thresholds, new filing regimes, new obligations for marketplaces.

This guide brings together, in an organised way, everything an Italian seller needs to know: the available VAT schemes, the thresholds that trigger obligations, the specifics of Amazon FBA, the operational workflow for handling data every quarter. It isn’t a legal document — to apply the rules to your specific case, always consult an accountant or tax advisor — but it’s a point of reference for understanding the full picture before talking to professionals.

The regulatory framework: what changed in 2021

Before July 2021, every EU country had its own distance-selling thresholds: €35,000 for most countries, €100,000 for Germany and the Netherlands. An Italian seller selling below the threshold in Germany applied Italian VAT; anyone exceeding the German threshold had to register in Germany.

From 1 July 2021 the rules changed radically:

• National thresholds were abolished and replaced by a single EU-wide threshold of €10,000, cumulative across all intra-EU cross-border B2C sales
• The OSS (One Stop Shop) scheme was introduced, allowing VAT for all EU countries to be declared through a single return in the country of establishment
• The IOSS scheme was introduced for imports from non-EU countries up to €150
• Marketplaces like Amazon were made responsible for VAT on certain categories of sales (deemed reseller)

The goal was to simplify compliance for honest sellers and combat tax evasion, especially by non-EU vendors.

For details on the historical thresholds and what changed: E-commerce VAT thresholds 2025-2026: OSS, ViDA and IOSS updates.

The three regimes: OSS, IOSS, local registration

An Italian seller trading in Europe faces three possible tax positions, which aren’t mutually exclusive:

1. Italian VAT (below threshold)

If B2C sales to all other EU countries combined don’t exceed €10,000 in the calendar year, you can apply Italian VAT to all these sales, regardless of the customer’s country. There’s no need to register for OSS or open foreign VAT numbers for these sales.

Note: the threshold is cumulative and annual. It’s calculated by summing all intra-EU cross-border B2C sales across all your channels (Amazon, eBay, Shopify, your own site). There’s no separate threshold per country.

Practical detail on the threshold: The €10,000 EU threshold: what changes for e-commerce VAT.

2. OSS — One Stop Shop (above threshold, intra-EU B2C sales)

Once you exceed the €10,000 threshold, you must apply the VAT rate of the customer’s country. The OSS scheme lets you:

• register once, through the Italian Agenzia delle Entrate portal
• declare, every quarter, B2C sales to all EU countries, broken down by country and rate
• pay the VAT collected to the Agenzia delle Entrate, which distributes it to the countries of consumption

The big advantage is that you avoid opening VAT numbers in every EU country where you sell. The limit is that OSS doesn’t cover everything: it doesn’t cover B2B sales, it doesn’t cover domestic sales, it doesn’t cover operations generated by physical stock in other countries.

Guide to how OSS works: VAT OSS: what it is and how it works for Amazon sellers.

3. Local VAT registration (mandatory in some cases)

Regardless of OSS, you’re required to register for VAT in a foreign country when:

• You have physical stock in that country (including Amazon FBA warehouses)
• You make intra-community acquisitions of goods in that country
• You sell goods from a local warehouse to customers in the same country (domestic sale)

OSS doesn’t eliminate these obligations. A seller with stock in Poland, Germany and France needs VAT numbers in all three countries, even if they use OSS for cross-border B2C sales.

When and how to open foreign VAT numbers: Foreign VAT number: how to get one and when you actually need it.

4. IOSS — Import One Stop Shop (non-EU goods ≤ €150)

If you sell goods imported from non-EU countries (typically: dropshipping from Chinese suppliers, products shipped directly from China to the European customer) worth up to €150 per shipment, the IOSS scheme lets you:

• collect VAT at the point of sale, at the customer’s country’s rate
• declare it monthly through a single IOSS number
• have the goods clear customs without the customer paying VAT on arrival

Without IOSS, the customer receives the goods held up at customs with a VAT payment request: a terrible experience, a high return rate.

Detail on IOSS: IOSS for e-commerce: when you actually need it.

The €10,000 threshold: how it works in practice

The OSS threshold works in a way that’s worth understanding well, because the most common mistake is calculating it incorrectly.

What counts towards the threshold:

• All B2C sales (to private consumers) to EU countries other than Italy
• All channels: Amazon, eBay, Shopify, your own site
• The taxable amount (excluding VAT), in euros
• The current calendar year (1 January – 31 December)

What does NOT count:

• B2B sales (to businesses with a valid VAT number)
• Sales to Italian customers
• Sales to non-EU countries
• Sales of goods already subject to local registration (e.g. from a German FBA warehouse to a German customer: this is a German domestic sale, not cross-border)

What happens when you exceed the threshold: From the moment the threshold is exceeded, all subsequent sales to EU consumers must apply the customer’s country’s rate. Previous sales (below threshold) have already been taxed with Italian VAT: they aren’t corrected retroactively.

The practical management of crossing the threshold mid-quarter is explained in detail in: A quarter of OSS in practice for a multichannel seller.

Amazon FBA and VAT: the most complex case

Amazon FBA introduces a specific complexity that OSS alone doesn’t solve. Understanding the difference between the various programmes is essential.

Standard FBA (stock in Italy)

If you keep all your stock in an Italian warehouse and Amazon ships to the European customer from Italy, your tax position is relatively simple:

• B2C sales to other EU countries: OSS if above threshold
• B2B sales to EU VAT numbers: VAT exemption with VIES verification
• No local registration obligation

Pan-European FBA and CEE FBA

If you activate Pan-European FBA or other multi-country programmes (EFN, CEE), Amazon redistributes your stock across warehouses in multiple countries. This changes everything:

• Every country where Amazon holds stock on your behalf generates a local VAT registration obligation
• Stock transfers between warehouses are intra-community supplies of your own goods that must be declared
• Sales from the local warehouse to the local customer are domestic sales of the warehouse’s country, not cross-border

Amazon’s VAT Transaction Report distinguishes these movements with specific codes (FC_TRANSFER, FC_IMPORT, SALE) that are essential to read correctly.

Detailed guide: Amazon Pan-European FBA: VAT obligations — FBA vs FBM: VAT differences for Italian sellers — Amazon warehouses in Europe and their VAT impact.

How to read the VAT Transaction Report

The VAT Transaction Report is the main tax document for an Amazon seller. It contains every transaction with the details needed for the VAT return. The most important columns:

• TRANSACTION_TYPE: distinguishes sales, refunds, transfers
• SALE_ARRIVAL_COUNTRY: the customer’s destination country
• SELLER_ADDRESS_COUNTRY: the country of the originating warehouse
• BUYER_VAT_NUMBER: present only in B2B sales
• ITEM_TAX_RATE_PERCENT: the rate applied

Before processing any OSS return, check that the report is complete (no missing months, no file truncated due to excessive size).

Guide to reading the report: Amazon VAT Transaction Report: how to read it without mistakes — How to read a per-country VAT report.

EU VAT rates: 27 countries, hundreds of combinations

Every EU country has its own rate structure. The standard rate ranges from 17% (Luxembourg) to 27% (Hungary). But the real complexity comes from reduced rates: almost every country applies them to specific categories such as food, books, medicines, children’s products.

Some examples of reduced rates relevant to e-commerce sellers:

An up-to-date, complete table can’t live in a static spreadsheet: rates change by parliamentary decree in every country, and every wrong edit to the mapping propagates to every transaction row using it.

Why manual rate management is risky: EU VAT rates: why you can’t manage them by hand.

Cross-border B2B sales: a separate regime

Sales to businesses (European VAT numbers) follow completely different rules from OSS. The basic principle is reverse charge: the Italian seller issues an invoice without VAT, and the foreign customer self-assesses the VAT in their own country.

Conditions for applying reverse charge on intra-EU B2B sales:

1. The customer must have a valid VAT number in the VIES system
2. The goods must be physically shipped to another EU country
3. The seller must have proof of shipment (CMR, tracking, customs document)
4. The invoice must show the customer’s VAT number and the required wording

Frequent mistake: applying reverse charge without checking the customer’s VAT number on VIES. If the number isn’t valid, the transaction can’t be exempt and VAT must be applied.

B2B sales to non-EU countries (e.g. UK, US) instead follow export rules: VAT exemption with customs proof.

Full guide: VAT on cross-border B2B sales: a guide for sellers — VAT reverse charge: when it applies in e-commerce.

The quarterly operational workflow

OSS is a quarterly return. The deadlines are fixed:

The monthly operational process leading to the quarterly return:

Every month (by the 5th of the following month):

1. Download the VAT Transaction Reports from all active marketplaces
2. Import and normalise the data (countries, currencies, transaction types)
3. Check coverage: all channels present, no truncated files
4. First threshold check: YTD cumulative cross-border B2C sales

At the end of the quarter: 5. Aggregate by country of consumption and rate 6. Run anomaly checks: impossible rates, missing countries, changes > 40% compared to the previous quarter 7. Produce the summary report for your accountant 8. Deliver it by the 20th of the month following the end of the quarter

After filing: 9. Archive the original files and the processed data (10-year retention obligation) 10. Update the tax decisions log if there were any special situations

The monthly process in detail: A quarter of OSS in practice for a multichannel seller — Quarterly OSS export — an operational checklist — How to prepare your accountant for the OSS return.

Tools: Excel, dedicated software, or both

The choice of tool depends on the complexity of your setup:

Excel’s breaking point isn’t the number of transactions but the complexity of the rules: reduced rates by category, OSS/domestic/B2B separation, anomaly detection. With a single broken VLOOKUP on the rate table, you can declare incorrect VAT for entire countries without noticing.

Analysis of Excel’s limits: Why Excel isn’t enough for OSS VAT anymore. Comparison of available tools: E-commerce VAT software — 2025 comparison — How to choose VAT software for European marketplaces.

Specific channels: eBay, Shopify

Each channel has its own specifics in the VAT workflow:

eBay: offers sales reports in CSV with a less standardised structure than Amazon’s. Watch out for sales where eBay acts as deemed reseller (non-EU sellers or certain types of auctions): these shouldn’t be included in your personal OSS base.

eBay sellers in Europe: how to organise your VAT data

Shopify: Shopify’s Tax module doesn’t automatically produce a report in the correct format for the Italian OSS return. You need to export the raw data and reprocess it.

Managing Shopify and Amazon in the same VAT workflow

Dropshipping: cross-border dropshipping has a particularly complex VAT position: who’s the tax-liable seller when the supplier ships directly to the customer? The rules vary depending on whether the supplier is EU or non-EU.

VAT and dropshipping in Europe: a complete guide

VAT number, OSS and company structure

A frequent question from sellers starting out: is a VAT number mandatory to sell on Amazon in Europe?

The answer is: it depends on your structure and volumes. An individual can sell occasionally, but as soon as the activity becomes regular and ongoing (even below the specific revenue thresholds for the flat-rate regime) the obligation to open a VAT number kicks in.

The most common tax structure for Italian sellers:

• Flat-rate regime (forfettario): up to €85,000 in revenue, flat tax at 15% (or 5% for the first 5 years). No VAT to apply on revenue, but specific consequences for OSS
• Standard regime / limited company: above the threshold or when you prefer to deduct costs

Note: the flat-rate regime doesn’t exempt you from OSS if you exceed the €10,000 threshold of cross-border B2C sales. The OSS rules are independent of your Italian tax regime.

Guide to VAT numbers for Amazon sellers: VAT number and Amazon: when you need one and how to open it.

Document retention and GDPR

The document retention obligation for tax purposes in Italy is 10 years for VAT records. This means VAT Transaction Reports, OSS reports, invoices and all processed data must be archived and accessible for a decade.

An e-commerce-specific point: the reports contain customers’ personal data (name, address, sometimes phone number). This makes them subject to GDPR too. Retention for tax purposes justifies the processing, but requires:

• secure archiving with controlled access
• procedures for handling deletion requests (which can’t be fulfilled for legally required tax data, but require a documented response)
• data breach procedures if files are lost or exposed

Detail on retention: Data retention and GDPR for tax reports.

Common mistakes and how to avoid them

From the experience of sellers managing EU e-commerce VAT, the most common mistakes:

1. Calculating the OSS threshold on Amazon only, forgetting eBay and Shopify: the threshold is cumulative across all channels
2. Declaring sales from foreign FBA warehouses in OSS: those are domestic sales of the warehouse’s country, not cross-border
3. Not checking the customer’s VAT number before issuing a VAT-free B2B invoice: if the number isn’t valid on VIES, the exemption doesn’t apply
4. Activating Pan-EU FBA without first opening local VAT numbers: this creates retroactive tax exposure in the storage countries
5. Always applying the standard rate: many products (books, food, medicines) have reduced rates that vary by country
6. Including sales handled as deemed reseller by the marketplace in the OSS base: if Amazon or eBay handle VAT on your behalf for certain transactions, those don’t go into OSS

Amazon-seller-specific mistakes: Common mistakes in Amazon sellers’ VAT management.

What changes with ViDA (VAT in the Digital Age)

The ViDA (VAT in the Digital Age) package, proposed by the European Commission, introduces significant changes over the coming years:

• Mandatory e-invoicing for intra-EU B2B transactions (expected by 2030)
• Digital Reporting Requirements: an obligation to report transactions in real time or near-real time to a central EU system
• Extension of OSS to also cover B2B sales and domestic supplies, further reducing the need for local registrations

For an Italian e-commerce seller, the most relevant change in the short term will be the extension of OSS to cross-border B2B sales, which today require local registration or complex procedures.

What these changes mean in practice: OSS and the ViDA package: what it means for sellers in the coming years.

Frequently asked questions

Does an Italian seller selling on Amazon need to register for OSS? It depends on your cross-border sales volume. If B2C sales to other EU countries exceed €10,000 per year, OSS is the simplest solution. Below the threshold, Italian VAT applies even to sales to EU consumers.

Are OSS and foreign VAT registration the same thing? No. OSS covers cross-border B2C sales. Foreign VAT registration is mandatory when you have physical stock in a country (e.g. FBA), carry out local domestic operations, or in certain dropshipping cases.

What happens if I exceed the €10,000 OSS threshold? You must apply the customer’s country’s VAT rate from the sale that exceeds the threshold. To handle this obligation you can register for OSS (a single quarterly return in Italy) or register individually in every EU country where you sell.

Does Amazon handle VAT on my behalf with Pan-European FBA? No. Amazon handles the logistics, but the tax responsibility remains yours. With Pan-EU FBA, Amazon creates local VAT registration obligations in every country where it holds stock on your behalf.

What’s the difference between OSS and IOSS? OSS covers B2C sales of goods already in the EU to consumers in other EU countries. IOSS covers sales of goods imported from non-EU countries worth up to €150: it lets you collect VAT at the point of sale, so the customer doesn’t pay it at customs.