VAT When Selling to Europe from the UK 2025: Post-Brexit Rules Explained

The UK's departure from the EU single market changed the VAT rules for UK businesses selling to European customers significantly. What used to be straightforward intra-EU supplies subject to UK VAT or the destination country's VAT depending on thresholds became a more complex set of rules involving customs declarations, import VAT, the EU's new One Stop Shop (OSS) scheme, and different obligations for goods versus services. Many UK small businesses were caught off guard by how substantially things changed.

This guide explains the current rules for 2025, covering both selling goods to EU consumers and providing services to EU business and consumer customers. Use our EU VAT calculator to check the applicable VAT rate for any EU country.

Selling goods to EU consumers: the import VAT position

When a UK business sells physical goods to an EU consumer, those goods are now exports from the UK and imports into the EU. This means they go through customs, potentially face import duties, and are subject to VAT in the destination country at the point of import. The UK business charges zero UK VAT on these sales because they are zero-rated exports. The EU customer pays VAT either directly at the border or through a mechanism the seller sets up.

For low-value goods worth less than €150, the EU introduced an Import One Stop Shop (IOSS) in 2021. Sellers who register for IOSS can collect the destination country's VAT at the point of sale and remit it through the IOSS portal, which removes the need for the buyer to pay VAT separately on delivery. This creates a smoother customer experience because there are no unexpected import VAT bills on delivery. For goods worth over €150, standard customs procedures apply at entry into the EU.

UK businesses that sell into the EU through online marketplaces like Amazon EU, eBay EU, or Etsy often have the marketplace handle the VAT collection under the deemed supplier rules introduced in 2021. Under these rules, the marketplace is treated as the seller for VAT purposes on sales to EU consumers and takes responsibility for charging and remitting the VAT. If this applies to your business, you need to understand what the marketplace is doing on your behalf and ensure you are not also collecting VAT inadvertently.

The EU One Stop Shop for distance selling

The EU's One Stop Shop (OSS) scheme, introduced in July 2021, allows businesses to register in one EU member state and declare and pay VAT on all B2C sales across the EU through a single registration. This was a significant simplification because previously distance sellers had to register for VAT in each EU country once they exceeded that country's distance selling threshold. UK businesses can use the non-Union OSS scheme by registering in one EU member state.

Using OSS means you collect the VAT applicable in each customer's country at the correct rate, declare it all through the OSS portal in your chosen registration country, and pay the aggregated VAT once per quarter. The registration country then distributes the VAT to each member state. This avoids the cost and complexity of separate VAT registrations across 27 EU member states for businesses with pan-European sales volumes.

Selling services to EU customers

The VAT treatment of services sold to EU customers depends on whether the customer is a business (B2B) or a consumer (B2C). For B2B services, the reverse charge mechanism generally applies. The UK business invoices without VAT, and the EU business customer accounts for the VAT in their own country through their own VAT return. This is relatively straightforward and requires the UK business to verify the EU customer's VAT registration number.

For B2C services, the rules are more complex. Electronically supplied services, telecommunications services, and broadcasting services supplied to EU consumers are taxed where the consumer is located. This means a UK digital business selling software subscriptions, online courses, or digital downloads to French or German consumers must charge French or German VAT at the applicable rates. The EU OSS scheme can handle this, allowing UK businesses to register once and declare all B2C digital service sales across the EU through a single filing.

Professional services such as legal advice, accounting, consultancy, and advertising services follow different rules and are generally outside scope in the UK when supplied to EU business customers, with the reverse charge handling the VAT in the EU. Consulting with a UK VAT specialist is advisable for service businesses with significant EU revenues because the rules differ by service type and whether you are dealing with businesses or consumers.

Import duties: the forgotten cost

Beyond VAT, physical goods exported from the UK to the EU may face import duties depending on what they are and where they originate. The UK-EU Trade and Cooperation Agreement provides zero tariff rates on goods that meet the rules of origin requirements, broadly meaning the goods are substantially manufactured or processed in the UK. Goods that are simply warehoused in the UK but originate from third countries do not benefit from the zero tariff and may face the EU's standard Common External Tariff.

Rules of origin documentation requirements are a genuine compliance burden for businesses that import components or partially manufactured goods and then sell finished products to the EU. Getting the classification and origin declaration wrong can result in EU customs authorities assessing tariffs retrospectively or detaining shipments. If your UK business sells goods containing significant non-UK or non-EU content, reviewing your supply chain against the rules of origin requirements for your product categories is important.

VAT registration in the EU

Some UK businesses with substantial EU operations find it more practical to register for VAT directly in one or more EU member states rather than relying entirely on OSS. Direct registration gives you the ability to reclaim EU VAT on business expenses in that country, which OSS does not allow. If your EU-facing business involves buying goods or services locally within the EU, direct VAT registration may be necessary to avoid a permanent VAT cost on those inputs.

Establishing a fiscal representative is required by some EU countries for non-EU businesses registering for VAT there, which adds cost. Germany, France, and Spain require fiscal representatives in certain circumstances. The Netherlands and Ireland are generally more straightforward for UK businesses to VAT-register in. Many UK businesses with significant EU operations have established subsidiary companies within the EU since Brexit specifically to simplify their VAT and customs position. Our EU VAT calculator helps you understand the VAT rates applicable in any EU country, and our EU freelance tax calculator covers the wider tax picture for self-employed individuals operating across borders.