Note: this article covers the 2025-2026 regulatory updates on the VAT threshold regime. If you’re looking for the basic explanation of how the €10,000 OSS threshold works, read first: The €10,000 EU threshold: what it is and how it works for e-commerce VAT.
The VAT threshold regime in the EU
Before the OSS reform, every EU country had its own distance-selling threshold. Germany used €100,000, France €35,000, Italy €35,000. Exceeding the threshold in a single state required local VAT registration, with very high costs and complexity for anyone selling in multiple countries.
Since July 2021, all these national thresholds have been abolished and replaced by a single EU-wide threshold of €10,000 per year for B2C sales to other EU countries, calculated on the calendar year. This is the heart of the OSS (One Stop Shop) scheme and the first “stop signal” every European e-commerce seller needs to monitor.
If you want to understand right away how OSS changes your VAT workflow, read our guide: VAT OSS: what it is and how it works for Amazon sellers.
The €10,000 threshold: what doesn’t change in 2025–2026
For the 2025–2026 period the threshold remains unchanged at €10,000. The basic mechanics — how it’s calculated, what it includes, what happens when you exceed it, the “historical threshold” rule — are explained in detail in our reference guide: The €10,000 EU threshold: what it is and how it works for e-commerce VAT.
This article instead focuses on the 2025–2026 regulatory updates affecting the threshold regime: the ViDA package, new IOSS obligations, and operational changes for dropshipping and marketplaces.
The ViDA proposal: what’s coming
The ViDA (VAT in the Digital Age) package introduced by the European Commission aims to make the VAT system more digital and interconnected. For 2025–2026 and the coming years, the most relevant changes for e-commerce will be:
- Mandatory e-invoicing for intra-community B2B transactions, with deadlines progressively extending towards 2030.
- Digital Reporting Requirements (DRR): an obligation to transmit VAT transactions to national tax authorities in real time or near-real time, through intermediary systems.
- Extension and evolution of the OSS scheme, especially for new categories of services and cross-border transactions.
For the e-commerce seller, the risk isn’t just “another set of rules to learn”, but a structural increase in the reporting burden and the need for automated VAT software, since manually handling thousands of transactions for DRR and e-invoicing becomes impractical.
If you want to understand how VAT software can make your life easier, read our analysis: E-commerce VAT software — 2025 comparison.
Thresholds for IOSS (Import One Stop Shop)
For imports from non-EU countries, the relevant threshold is €150 per shipment:
- parcels under €150 can fall under the IOSS scheme, with VAT paid at the point of online sale;
- parcels over €150 are subject to import VAT and, often, customs duties.
VAT paid via IOSS at the point of sale isn’t due a second time on delivery, unlike many other customs scenarios. This is one of the reasons Amazon and other marketplaces favour using the IOSS scheme when technically possible.
Dropshipping below and above €150
For anyone using dropshipping from China or other non-EU countries, the OSS/IOSS threshold combination is very delicate. In short:
- below €150: using IOSS improves the customer experience and reduces administrative costs;
- above €150: handling import VAT and duties becomes unavoidable, with professional traders or freight forwarders taking on the customs VAT, sometimes passed on to the customer.
If you don’t want to get lost in the regulatory details, we recommend the full read: VAT and dropshipping in Europe: a complete guide for online sellers.
How to monitor progress towards the thresholds
The most common problem isn’t “not knowing what the rule says”, but never knowing in which month you actually leave the Italian VAT regime and move to OSS and foreign VAT.
What to monitor in practice
For an Amazon seller, monitoring needs to be:
- by country: Italy vs Germany vs France vs Spain vs the rest of the EU;
- by sale type: B2C vs B2B, marketplace vs your own channels;
- periodic: monthly, with an early-warning threshold already from 70–80% of the €10,000.
VATManager includes a module that automatically aggregates B2C sales by country over the course of the year, showing the monthly breakdown and progress towards the overall €10,000. It also flags:
- when you cross the 70%, 90% and 100% thresholds;
- if certain countries start to “weigh too much” relative to others, a signal of possible local VAT obligations (for example for foreign FBA stock).
Example of a “thresholds” dashboard
An example of a report you might receive:
| Country | 2024 sales | 2025 cumulative | % of €10,000 threshold |
|---|---|---|---|
| Italy | 32,000 | 4,500 | 0% (excluded from threshold) |
| Germany | 18,000 | 3,200 | 32% |
| France | 15,000 | 2,800 | 28% |
| Spain | 12,000 | 2,300 | 23% |
| OSS total | — | 8,800 | 88% |
When the cumulative figure exceeds 90%, it’s time to open a conversation with your accountant and start OSS registration, not when you’re already at 110%.
Frequently asked questions
1. If you sell €9,500 in France and €800 in Germany, are you already in OSS? Yes. The threshold is cumulative: 9,500 + 800 = 10,300 > 10,000, so you’re on the OSS scheme from the moment that threshold is crossed.
2. Which sales actually count towards the OSS threshold? Only B2C sales to other EU countries count. These don’t count: sales in your own country of residence, B2B sales, non-EU sales, any VAT-reduced or exempt sales.
3. What happens if I don’t register for OSS when I exceed the threshold? You risk administrative penalties, late-payment interest and, in serious cases, exclusion from the OSS scheme with an obligation to register directly in every country you sell into. The tax authority can reconstruct your business profile from Amazon and other marketplace reports.
4. Does the OSS threshold include returns and shipping costs? No. The threshold is calculated on the net amount of sales, i.e. the taxable amount subject to VAT, excluding returns, refunds and the VAT component itself.