Tax services in the EU

If you're already using Shopify to sell in the European Union, then you can update your EU tax settings to reflect your tax registrations. Your tax registrations determine where you collect taxes. When you update your tax settings, you're asked to provide a VAT number. After you add a VAT registration, Shopify automatically sets the tax rates that apply in the areas where you've registered.

Understanding VAT numbers

A VAT number, also referred to as a value-added tax identification number (VATIN), is an identifier used in the EU. It's provided to you by a member country's tax authority after you register with them. This number is issued by countries to allow merchants to charge value-added tax.

Determine if you need to register to charge taxes

Typically, if you intend to sell to other countries in the EU, then you need to register with the tax authorities in your own country to charge VAT. If you sell cross-border, such as from Germany to France, then a One-Stop Shop scheme registration might help streamline your registration process.

VAT registration in other countries

You might need to register in another region as well as your home country if you sell to customers in other EU member countries, or if you have a significant business presence there, such as a sales location or a fulfillment center.

You can register for the One-Stop Shop scheme to simplify registrations for cross-border sales. The One-Stop Shop (OSS) scheme allows merchants to collect and remit VAT for cross-border sales in all EU member countries, rather than registering for each member country individually. You can only use OSS if your store uses the Basic Tax or Shopify Tax service. If you haven't updated your settings to use one of these services, then update your tax rates manually by using Manual Tax rates. Local sales require a local tax registration for that country, and aren't covered by the OSS.

If you have a significant presence in a country, then you should contact that country's tax authority to confirm whether you need to register to collect taxes. It's your responsibility to determine if your business exceeds the distance sales threshold.

EU VAT registration types

The type of VAT registration you need depends on where your business is located and what you're selling. Review the following options to determine which registration type applies to your situation:

VAT rate thresholds

As of July 1, 2021, distance selling thresholds for individual countries no longer apply. Instead, a single distance selling threshold of €10,000 EUR applies for the entire EU. This threshold determines the VAT rate you should charge, but you should collect VAT the first time you sell into another EU member state.

• For customers in your home country, your local VAT rate is charged.
• For customers in EU countries outside your own, the rate is determined by whether you exceed the cross-border sale threshold.
  • If your combined sales to all other EU member countries are less than €10,000 EUR in total, then you can choose to charge your home country's VAT rate in other EU countries and remit VAT to your home country's government. If you choose to charge your home country's VAT rate for all EU sales, then you might need to apply for the micro-business exemption with your local tax authority. If you're not sure whether you need to apply, then consult with your local tax authority or a tax professional.
  • If your combined sales to other EU member countries are equal to or greater than €10,000 EUR in total, then you charge the VAT rate in your customer's location for all sales to other countries.

IOSS threshold for non-EU merchants

If you're located outside the European Union and selling to customers within the European Union, then the following rules apply:

• For orders that are equal to or less than €150 EUR (calculated before VAT and shipping), you can collect VAT at checkout using IOSS.
• For orders that are greater than €150 EUR, import VAT and duties are applied. These are typically collected by the shipping carrier upon delivery.

Register to charge taxes in an EU country

If your sales to other EU countries are equal to or greater than €10,000 EUR, then you can register for the OSS scheme. The OSS scheme allows merchants to collect and remit VAT for sales in all EU member countries, rather than registering for each member country individually. You can only use OSS if your store uses Basic Tax or Shopify Tax. If you haven't updated your settings to use one of these services, then update your tax rates manually by using Manual Tax rates.

If you need to register to charge taxes in a specific EU country, then you can contact that country's tax authorities.

After you've registered, add your VAT number on the Taxes and duties page.

Steps:

1. From your Shopify admin, go to Settings > Taxes and duties.

2. In the Regional settings section, click European Union.

3. In the VAT on sales section, click Collect VAT.

4. Select a country in which you're registered.

5. In the VAT number field, enter your VAT number.

6. Click Add country.

7. Optional: To add more regions and account numbers, click VAT registration.

You can delete or change your registrations or account numbers with the ... button next to the country name in the VAT registrations section.

Change your tax service

You can change between Shopify Tax, Basic Tax, and Manual Tax from your Shopify admin. This option is available in your EU tax settings.

Steps:

1. From your Shopify admin, go to Settings > Taxes and duties.

2. In the Regional settings section, click European Union.

3. In the Tax service section, click ..., and then click the appropriate option. Depending on your current tax service, this is labeled Upgrade service, Switch service, or Downgrade service.

4. Select the tax service that you want to use.

5. Click Save.

To learn more about the differences between tax services, refer to Choose a tax service.

Verify your tax settings with a draft order

Before processing live orders, you can verify that your tax settings are calculating correctly by creating a draft order. This allows you to test tax calculations without affecting real transactions.

Steps:

1. From your Shopify admin, go to Orders > Drafts.

2. Click Create order.

3. Add a product to the order.

4. In the Customer section, add a customer with an EU shipping address, or add a new address.

5. Review the Taxes section to verify the calculated tax rate is correct for the destination country.

6. If the tax calculation looks correct, then you can delete the draft order. If the tax calculation is incorrect, then review your tax settings and registrations.

Troubleshooting EU VAT issues

If VAT isn't being charged correctly on your EU orders, then review the following common issues and solutions.

Tax overrides after updating

You can override your tax settings after updating. For more information about how EU tax overrides are affected when you update, refer to Override taxes.

Tax rounding differences

In some orders, you might notice a small variance in your total tax amounts after you've updated your tax settings. This variance is due to tax amounts being rounded at the line-item level, rather than at the invoice level. You can learn more about rounding calculations in Setting up EU taxes.

Brexit considerations for UK sales

If you sell to customers in the UK, then the best way to get information about how Brexit affects your business is by contacting a local tax professional. As a starting point, the following are some of the new laws that apply to merchants who sell to customers in the UK:

• The sale of goods from outside the United Kingdom to customers within the United Kingdom have become imports (the receipt of goods into a country or customs union from outside the country or customs union) rather than acquisitions (the receipt of goods from one EU member country to another EU member country).
• You might need a UK EORI number.
• The UK VAT laws that came into force on January 1, 2021 result in new VAT requirements for sales equal to or less than £135 GBP.
  • If the sale of goods is equal to or less than £135 GBP, then you must register for VAT in the United Kingdom. In this case, VAT is collected at the point of sale and remitted by the merchant. If you use the Basic Tax service and have a UK VAT registration, then VAT is applied to your sales to customers in the United Kingdom.
  • If the sale of goods is over £135 GBP, then you might not be required to collect VAT at the point of sale. In this case, VAT and duties are remitted by the importer. If you use the Basic Tax service and have a UK VAT registration, then VAT isn't applied to your sales to customers in the United Kingdom. If you choose to, you can charge your customer for VAT and duties at the time of sale, and then provide these funds to the shipper or importer using a shipping label. Alternatively, you can send the orders without charging VAT and duties, and your customer will pay extra funds at the time of delivery. Learn more about handling VAT and duties.

Learn more about the implications of Brexit for your business.

Frequently asked questions

Prepare to contact Shopify Support about EU VAT issues

Before reaching out to Shopify Support, gather the following information to help resolve your issue faster:

• A description of what you expect to happen and what's happening instead
• An admin link to an order showing the issue (go to Orders, click the order, and copy the URL from your browser)
• If possible, an admin link to an order where VAT calculated correctly for comparison
• Your VAT registration number(s) and registration type (OSS, IOSS, Non-Union OSS, or country-specific)
• The customer's shipping address (country and postal code)
• Whether the customer provided a VAT number for reverse charge
• The fulfillment location for the order
• When the issue started occurring
• Steps you've already tried from the troubleshooting section

EU customs duty changes starting July 1, 2026

As of July 1, 2026, the European Union is removing the €150 EUR customs duty exemption on imported goods. After this date, a flat-rate customs duty applies to most business-to-customer imports from outside the European Union, regardless of the order's value. Review the following changes:

• A €3 EUR flat-rate customs duty per tariff classification applies to imports under €150 EUR shipped to EU customers.
• The fee is perHarmonized System (HS) tariff code, not per parcel. For example, a parcel with two distinct product categories incurs a €6 EUR duty.
• VAT rules are unchanged. IOSS continues to cover VAT on orders €150 EUR and under.

Changes for your business

The impact of these changes on your store depends on how your store currently manages duties and taxes on EU orders.

Add HS codes to your products

The €3 EUR duty is calculated per tariff classification. Customs declarations on EU-bound shipments require accurate HS codes on your products. Without them, shipments might be delayed or incorrectly assessed at customs.

To add HS codes in your Shopify admin, go to a product, click Shipping, and enter the HS code in the Customs information section.

Review your EORI requirements

You should review your EORI setup before July 1, 2026.

An EORI (Economic Operators Registration and Identification) number is typically required for customs declarations when importing or exporting goods into the European Union. The EORI is the responsibility of the Importer of Record, which is the entity who lodges the customs declaration and is legally responsible for the goods.

Whether you need to get an EORI number depends on who the Importer of Record is:

• If your business is the Importer of Record, then you need to get an EORI number from the customs authority of the first EU country that your goods enter.
• If your customer is the Importer of Record, then in most cases an EORI number isn't required. The carrier or customs broker can act on their behalf.

Refer to the European Commission article Economic operators registration and identification number (EORI) to learn more.

Related links

• Setting up EU taxes
• Manage your EU taxes
• EU tax reference
• Choose a tax service
• Tax overrides and exemptions
• Your Europe - VAT rules and rates
• Your Europe - Cross-border VAT
• European Commission - Where to tax?