# EU VAT Guide for 2026: How VAT Works Across the European Union

Canonical: https://trykintsugi.com/sales-tax-guides/europe/european-union
Published: June 17, 2026

VAT is harmonized across the EU but rates differ by member state (standard rates run 17%–27%). This guide explains the common VAT system, OSS/IOSS, distance-selling thresholds, and cross-border compliance.

- **SaaS:** Taxable (EU-wide)
- **Digital Goods:** Taxable (EU-wide)

## Key Takeaways

The EU does not set one VAT rate — each member state sets its own standard rate, ranging from 17% in Luxembourg to 27% in Hungary, plus its own reduced rates. What's harmonized across the bloc is the cross-border framework: place-of-supply rules, the EUR 10,000 EU-wide distance-selling threshold, and the One Stop Shop (OSS), which lets a seller register once instead of in every member state above that threshold. All electronically supplied services — SaaS, streaming, e-books, and software — are taxable everywhere in the EU and covered by OSS for B2C sales; intra-EU B2B supplies are generally zero-rated under the reverse charge.

## Taxability Snapshot

## Sales Tax Rates

The EU does not have one VAT rate. Each member state sets its own standard rate, currently from 17% in Luxembourg to 27% in Hungary, plus its own reduced rates. What is harmonized is the cross-border framework: the place-of-supply rules, the €10,000 distance-selling threshold, and the One Stop Shop.

| Element | Rule |
| --- | --- |
| Standard rates | 17%–27%, set per member state |
| Distance-selling threshold | €10,000 EU-wide (B2C goods + digital) |
| OSS | One quarterly return for all EU B2C |
| IOSS | Imports of goods ≤€150 from outside the EU |

For country specifics, see the individual guides under our [Europe VAT guides](/sales-tax-guides/europe).

The VAT in the Digital Age (ViDA) reforms, adopted in March 2025, phase in through 2035: minor OSS and IOSS improvements from January 2027; Single VAT Registration (expanded OSS and reverse charge) plus the first platform deemed-supplier rules from July 2028 (mandatory January 2030); and mandatory e-invoicing and digital reporting for intra-EU B2B from July 2030, with existing national real-time reporting systems required to align with the EU standard by 2035.

#### Registration & nexus threshold

The EU uses VAT registration rules rather than US-style economic nexus. For cross-border B2C sales, VAT is due in the seller's own country until total EU distance sales pass the EU-wide EUR 10,000 threshold, after which it is due in the customer's country [2]. Above that threshold a seller can register once for the One Stop Shop instead of registering in every member state; a non-established business supplying a single country registers there directly [2]. Registration steps are in the How to Register section.

#### Filing frequency & deadlines

OSS returns are filed quarterly, due the end of the month following each calendar quarter, with a single payment that your member state of identification distributes to every country where you made sales.

#### Exemptions

Reduced and zero rates vary by member state, but intra-EU B2B supplies are generally zero-rated under the reverse charge and exports outside the EU are zero-rated. All electronically supplied services — SaaS, streaming, e-books, and software — are taxable and covered by OSS for B2C sales.

#### Penalties

Penalties for OSS errors or late returns are set by your member state of identification. Persistent non-compliance can lead to exclusion from OSS and a requirement to register for VAT separately in each member state where you sell.

#### Sources

- [1] [European Commission — VAT rates and the VAT Directive (2006/112/EC)](https://taxation-customs.ec.europa.eu/taxation/vat/vat-directive/vat-rates_en)

- [2] [European Commission — One Stop Shop and Import One Stop Shop (EU-wide EUR 10,000 threshold)](https://vat-one-stop-shop.ec.europa.eu/one-stop-shop_en)

- [3] [European Commission — VAT in the Digital Age (ViDA)](https://taxation-customs.ec.europa.eu/taxation/vat/vat-digital-age-vida_en)

Verified July 2026 against European Commission guidance.

#### Frequently asked questions

### Is there a single EU VAT rate?

No. Each EU member state sets its own standard VAT rate, currently ranging from 17% in Luxembourg to 27% in Hungary.

### What is the EU distance-selling threshold?

€10,000 EU-wide for combined cross-border B2C sales of goods and digital services. Above it, you charge the customer's country rate.

### What is the OSS scheme?

The One Stop Shop lets you register in one member state and file a single quarterly VAT return for all EU B2C sales, instead of registering in each country.

### What is IOSS?

The Import One Stop Shop simplifies VAT on distance sales of imported goods valued at €150 or less from outside the EU.

### Is SaaS taxable across the EU?

Yes. All electronically supplied services, including SaaS, are taxable; B2C sales are reported through OSS at the customer's local rate.

### When are OSS returns due?

Quarterly, by the end of the month following the quarter, with one payment distributed to each member state.