The single threshold that changed everything
Before 1 July 2021, every EU country had its own distance-selling threshold (from €35,000 to €100,000 per year), above which the seller was required to register for VAT in that country. A fragmented system that penalised small sellers unable to bear the cost of multiple registrations.
With the 2021 e-commerce VAT reform (Directive 2017/2455/EU), the national thresholds were abolished and replaced by a single EU-wide threshold of €10,000 per year, calculated on total intra-community B2C sales (to all EU countries other than the seller’s country of establishment).
This change has concrete effects in two directions:
- Simplification effect: small sellers below the threshold keep applying their own country’s VAT, without needing to know the rates of the other 26 states
- Broadening effect: many sellers who were below the old national thresholds (e.g. not reaching €100,000 towards Germany) now find themselves above the single €10,000 threshold, with an obligation to register for OSS
How the threshold is calculated: what counts and what doesn’t
The €10,000 threshold is calculated on the sum of all B2C sales made to end consumers resident in other EU states than the seller’s country of establishment. It includes:
Counts towards the threshold:
- Sales of physical goods shipped from a warehouse in your own country to consumers in other EU countries
- Telecommunications, broadcasting and digital (TBE) services supplied to private individuals in other EU states
- Sales through marketplaces (Amazon, eBay, Etsy) if the seller is the VAT taxable person — note: if the marketplace acts as deemed reseller, those sales might not count towards your personal threshold
Doesn’t count towards the threshold:
- Sales to VAT-registered businesses (B2B): these follow the rules for intra-community supplies (VAT exemption with self-assessment by the buyer)
- Sales to consumers in your own country of tax residence
- Non-EU sales
- Imports from non-EU countries handled via IOSS (a separate threshold)
When the obligation kicks in: the practical timeline
The €10,000 threshold refers to the current calendar year and the previous calendar year. There are two scenarios:
Scenario A — Threshold exceeded in the previous year: If in year N-1 you already exceeded €10,000 of intra-community B2C sales, from 1 January of year N you’re already required to apply the destination country’s VAT and register for OSS.
Scenario B — Threshold exceeded during the current year: If you exceed the threshold for the first time mid-year, the obligation kicks in from the first transaction that caused the threshold to be crossed. It’s not retroactive: previous sales already invoiced with Italian VAT remain correct; subsequent ones must be invoiced with the destination country’s VAT.
Practical example: you’re an Italian seller, you sold €6,000 to Germany and €4,500 to France in 2025 (total: €10,500 → above threshold). From 1 January 2026 you’re required to use OSS. If instead in 2026 you reach €10,001 in March with a single sale to Spain, from that sale onward you apply Spanish VAT.
Below threshold: the simplified regime
Sellers with intra-community B2C sales below €10,000 per year can apply the VAT of their own country of establishment to all EU sales, regardless of the destination country. For an Italian seller this means always applying Italian VAT (22%, 10% or 4%) even to sales to Germany, France or Poland.
This simplified regime is automatic: no registration is needed. However, it’s still necessary to:
- Monitor progress towards the threshold during the year
- Have documentary evidence that total intra-community sales are below €10,000
- Be ready to register for OSS as soon as the threshold is approached
Note: it’s possible to voluntarily opt into the OSS scheme even below the threshold, applying destination-country rates. This can be advantageous in some cases (e.g. products with reduced rates in certain countries) but generally adds complexity without benefits for small sellers.
Impact on Amazon Pan-European and Multi-Country FBA
Sellers who use Amazon Pan-European FBA face additional complexity: Amazon’s European warehouses (DE, FR, IT, ES, PL, CZ, NL) receive stock and then automatically redistribute it. This creates not only intra-community B2C sales, but also stock movements between warehouses (intra-community transfers of your own goods) that generate VAT obligations separate from OSS.
Specifically:
- A transfer of 100 units from the Italian warehouse to the German one is an intra-community supply of your own goods: it requires German VAT registration and an Intrastat declaration
- The subsequent sale from the German warehouse to a German consumer is a domestic sale (not intra-community) subject to German VAT
- The sale from the German warehouse to a French consumer is an intra-community sale that can be declared via OSS
So OSS doesn’t cover everything: Pan-European sellers often still need local VAT numbers (at least in DE, FR, IT, ES, PL) to manage stock movements and domestic sales.
How to track the threshold during the year
Monitoring how close you are to the €10,000 threshold is essential to avoid crossing it by surprise. The practical steps:
- Export monthly the Business Report from Amazon Seller Central with sales by country
- Sum only sales to EU countries other than Italy (if you’re an Italian seller)
- Keep a cumulative year-by-year record
- Set an alert (manual or via software) when you reach €8,000 cumulative — an early-warning zone
- Register for OSS pre-emptively if you’re close to the threshold: it’s better to register before crossing it than to find yourself already out of compliance
VATManager includes a threshold monitoring module: it analyses your uploaded reports and shows the cumulative intra-community B2C sales for the current year, with a visual indicator of the distance to the threshold.
Summary table: before and after the 2021 reform
| Aspect | Before 2021 | From 1 July 2021 |
|---|---|---|
| Distance-selling thresholds | Per country (€35,000–100,000) | Single EU-wide (€10,000) |
| VAT below threshold | Destination country’s | Country of establishment’s |
| Multi-country registration | Mandatory beyond national thresholds | Replaced by OSS |
| Return | Separate for each country | Single quarterly return via OSS |
| Import exemption | €22 | Eliminated (IOSS for ≤ €150) |
Penalties for failing to register for OSS
If you exceed the €10,000 threshold and don’t register for OSS, you keep charging your own country’s VAT instead of the destination country’s. This constitutes VAT under-declaration in the countries of consumption, which can lead to:
- Assessments by the tax authorities of the destination EU countries
- Penalties calculated on the unpaid VAT (in Germany typically from 10% to 25% of the evaded tax)
- Late-payment interest
- An obligation to register directly and regularise the situation retroactively
EU tax authorities exchange data via the VIES system and the automatic VAT data exchange system (DAC7), so the likelihood of being detected is growing, especially for sellers with significant volumes.
2025–2026 regulatory updates: for the latest on ViDA, intra-community e-invoicing and Digital Reporting Requirements, read: VAT thresholds 2024-2025: what changes for e-commerce.