International VAT: Selling Goods from UK to EU After Brexit

Brexit fundamentally changed how international VAT works for UK businesses selling goods into the EU. What was once a straightforward intra-EU transaction is now a cross-border export, subject to customs declarations, EU import VAT, and, depending on your sales volume and structure, potentially multiple VAT registrations across 27 member states.

Five years on from the transition period ending on 1 January 2021, many UK businesses are still navigating the complexity. And with significant new EU customs and VAT reforms coming into force in mid-2026, now is not the time to be complacent.

This guide sets out the key international VAT rules you need to understand when selling goods from the UK to EU customers, covering everything from zero-rating your UK exports to registering for the Import One-Stop Shop (IOSS).

How Has Brexit Changed International VAT for UK Sellers?

Before Brexit, the UK was part of the EU single market and customs union. Selling goods to a customer in France or Germany was treated as an intra-EU supply, straightforward, with no customs checks and a simplified VAT framework.

That is no longer the case. The EU now treats the UK as a third country. Every consignment of goods moving from Great Britain to an EU member state is classified as an export from the UK and an import into the EU. This has three immediate consequences for UK businesses:

• UK VAT is not charged on goods exported to the EU (they are zero-rated, provided you hold the correct evidence of export).
• Import VAT and customs duties become payable when goods arrive in the EU.
• Your EU customers, whether businesses or consumers, face different obligations depending on who they are and what they are buying.

Understanding this distinction between B2B and B2C sales is essential because the international VAT rules diverge significantly between the two.

Our International VAT Services team works with UK businesses of all sizes to navigate exactly these challenges.

Selling Goods to EU Businesses (B2B)

When you sell goods to a VAT-registered business in the EU, the process is relatively structured. As a UK VAT-registered seller, you zero-rate the supply on your UK VAT return, meaning you charge 0% UK VAT but retain the right to reclaim input VAT on related costs.

To zero-rate correctly, you must

• Hold valid commercial evidence that the goods have physically left the UK (export declarations via HMRC’s Customs Declaration Service, airway bills, bills of lading, or freight forwarder confirmation).
• Retain your customer’s EU VAT number.
• Ensure the goods are not diverted back into the UK before export.

The EU buyer then accounts for import VAT under their domestic reverse-charge mechanism, so VAT does not create a cash flow burden for them at the border, provided they are VAT registered.

Importantly, UK businesses exporting to EU customers no longer need to complete an EC Sales List. You simply retain the evidence of export and account for the zero-rated supply on your VAT return.

Selling Goods to EU Consumers (B2C); and Why It’s More Complex

Selling directly to private consumers (B2C) in the EU is where international VAT obligations become considerably more involved.

For goods valued above €150: You are required to submit a full customs declaration for every shipment. Import VAT and customs duties are assessed by the destination country’s customs authority. Unless you have made specific arrangements, your EU customer will be expected to pay these charges before the parcel is released, which can lead to delivery delays and customer dissatisfaction.

For goods valued at €150 or less: The EU’s Import One-Stop Shop (IOSS) offers a far more practical solution.

What Is IOSS, and Do UK Sellers Need It?

The Import One-Stop Shop (IOSS) is an EU VAT scheme designed to simplify the declaration and payment of import VAT on low-value consignments shipped directly to EU consumers. It applies to individual orders valued at €150 or less.

Under IOSS, you charge the applicable EU VAT rate at the point of checkout, so your customer pays no surprise charges at the door. You then file a single monthly IOSS VAT return covering all EU member states, rather than registering in each country individually.

For UK businesses, IOSS registration is not possible directly. You must appoint an EU-based intermediary who files the IOSS returns on your behalf and shares liability for compliance with EU tax authorities. This is a non-negotiable requirement for UK sellers.

The practical benefits are significant: goods move through EU customs faster, customers receive a seamless experience, and you avoid the administrative and reputational costs of failed deliveries. If you are selling meaningful volumes of goods to EU consumers below the €150 threshold, IOSS is strongly worth considering.

Our Customs Duty Planning & Compliance service includes support for businesses evaluating and implementing IOSS.

EU VAT Registration: When Does a UK Business Need It?

Beyond IOSS, there are circumstances in which a UK business may need to register for VAT in one or more EU member states directly. The most common triggers are:

Holding stock in the EU. If you store goods in an EU warehouse, including third-party fulfilment centres, you are likely to create a VAT registration obligation in that member state. This is a frequent issue for businesses using pan-European fulfilment networks.

Sales above €10,000 to EU consumers. If your total distance sales to EU consumers exceed €10,000 per year across all EU countries combined, you must account for VAT in the destination countries. The EU’s One-Stop Shop (OSS) allows businesses already VAT-registered in an EU member state to report and pay this VAT through a single quarterly return.

As a UK business, you are not eligible for the Union OSS. However, you can register for the Non-Union OSS in any EU member state, which allows you to report VAT on sales of services (not goods) to EU consumers through a single return.

What About EORI Numbers?

An Economic Operator Registration and Identification (EORI) number is mandatory for any UK business exporting goods to the EU. You need a UK EORI number (prefixed GB) to complete export declarations via HMRC. Depending on your fulfilment setup, you may also require an EU EORI number.

Without a valid EORI number, your goods will not clear UK customs; it is a basic compliance requirement that must be in place before you begin exporting.

Important 2026 Changes: What UK Sellers Must Know

The international VAT and customs landscape continues to evolve, and 2026 brings material changes that UK businesses trading with the EU cannot ignore.

From 1 July 2026, the EU is introducing a flat-rate customs duty of €3 per parcel on consignments valued under €150, provided VAT is settled via IOSS. Separately, a union-wide customs handling fee is expected to launch in November 2026. Several EU member states, including France, Belgium, and the Netherlands, are also introducing their own national handling fees, in some cases from January 2026.

The longer-term direction of travel is equally significant. The EU is moving towards abolishing the €150 IOSS threshold entirely, extending customs duty obligations to all imports regardless of value, and requiring full customs declarations across the board. Businesses using low-value consignment structures to simplify compliance should be reassessing their models now.

Practical Steps for UK Businesses Selling Goods to the EU

Getting your international VAT position right is not a one-time exercise; it requires ongoing compliance management as rules change. As a starting point, UK businesses should:

• Confirm they hold a UK EORI number and that export declarations are being submitted correctly.
• Review whether their goods qualify for zero-rating and that sufficient evidence of export is retained.
• Assess whether IOSS registration (via an EU intermediary) is appropriate for their B2C sales below €150.
• Identify whether any EU stock-holding or fulfilment arrangement triggers a local VAT registration requirement.
• Model the cost impact of 2026 customs changes on their pricing and shipping strategy.

For complex or high-volume cross-border operations, the cost of getting this wrong, in penalties, delays, and reputational damage, far outweighs the cost of specialist advice.

How Deeks VAT Can Help

At Deeks VAT Consultancy, we work with UK businesses at every stage of their EU trading journey — from initial compliance health checks through to ongoing international VAT management and HMRC representation.

Whether you are just beginning to export to Europe, scaling up your e-commerce operations, or reviewing your VAT position ahead of the 2026 reforms, our team has the expertise to keep you compliant and competitive.

Explore our International VAT Services or 

Get in touch with our team to discuss your specific requirements.