Legal, Compliance & Privacy

VAT

Value Added Tax - consumption tax used in EU and many other countries.

1 min readLast updated Apr 2026

Value Added Tax - consumption tax used in EU and many other countries.

Why It Matters

Selling to EU consumers above €10,000/year requires VAT registration in an EU country. Brexit added UK VAT requirements too.

Practical Example

Scenario

A US skincare brand does €50K in EU sales annually.

Calculation

Above €10K threshold for One-Stop-Shop (OSS) registration. Must charge VAT at destination country rates (19-27%)

Result

Registered for OSS in Ireland, now compliant with single EU VAT return covering all EU sales

Pro Tips

  • 1Consider pricing VAT-inclusive for EU customers to simplify the purchase experience
  • 2Use One-Stop-Shop (OSS) to file a single VAT return for all EU countries
  • 3Remember UK requires separate registration post-Brexit for sales over £85K

Common Mistakes to Avoid

Ignoring VAT because you're US-based—EU VAT applies based on where customers are
Not updating prices or checkout for VAT, surprising customers with extra costs
Forgetting that VAT rates vary by country (Germany 19%, France 20%, Hungary 27%)

Frequently Asked Questions

Related Terms

Sales Tax

State and local taxes on retail sales. Requirements vary by nexus in each state.