Selling Goods in the EU: Issues to Consider

Expanding into EU markets can feel like opening a door into a corridor of even more doors, each labelled with a different VAT regime, import rule, or three-letter acronym designed to confuse even the most diligent business owner. Since Brexit, the questions coming from clients tend to fall into familiar themes: Do I need to register for VAT in Europe? What is the IOSS? Will OSS apply to me? And why does every country seem to have a different VAT rate?

This guide breaks down the main issues to consider when a UK business starts selling goods (not services) to customers in the EU. The rules are more complicated than for services because every sale involves two separate VAT systems: UK export rules, and the import/VAT rules of the EU country where the goods arrive.

1. Exporting Goods from the UK – Getting Zero-Rating Right

When goods physically leave Great Britain, the supply is usually zero-rated, but the zero rating isn’t automatic. Your client must be able to prove the goods were exported.

That means:

• They must hold a valid EORI number.
• They need commercial documentation describing the goods clearly.
• Transport documents (e.g. bills of lading, airway bills, courier tracking) must show the goods leaving the UK.
• These records must be kept for six years.

Most importantly, exporters get three months to collect the evidence. If they fail to gather the right proof in time, they must treat the sale as standard-rated.  

Practical point:
Encourage clients to treat export evidence like CIS paperwork or AML records, something to be monitored proactively, never retrospectively.

2. Who Is the Importer of Record? (The Question That Decides Everything)

Once the goods hit the EU border, the crucial issue is: who is responsible for the import?

If the EU customer is the importer of record:

• Your client does not need to register for VAT in that country.
• The customer pays any import VAT, duty or customs fees.
• After the UK export, your client’s involvement ends.

This is usually the simplest and cleanest option.

If your client is the importer of record:

• They will normally need to obtain a local VAT registration.
• They pay import VAT (recoverable via the local VAT system).
• They must charge local VAT on their onward sale.
• They file local VAT returns and comply with that country’s rules.
• No “registration threshold” applies to non-EU businesses.

Professional tip:
Unless there is a strong commercial reason to take on the import VAT, most UK businesses should avoid becoming the importer.

3. Special Case: Northern Ireland

If your client is based in Northern Ireland, the situation changes because NI remains inside the EU VAT rules for goods.

This means:

• EU acquisitions and dispatches rules still apply
• NI businesses may need to complete EC Sales Lists
• OSS may be relevant depending on the arrangement

Always check NI-specific guidance before advising.

4. OSS vs IOSS – Untangling the Acronyms

Brexit brought a lot of VAT upheaval, but the introduction of the EU’s one-stop shop schemes caused even more widespread confusion.

IOSS – Import One Stop Shop

IOSS is relevant where:

• Goods are sold B2C
• They are shipped directly into the EU
• The value of each consignment is under €150/£135

Under IOSS:

• Your client charges VAT at the EU rate at checkout, not at import.
• There is no import VAT for low-value consignments.
• Only one monthly IOSS return is required, covering all EU countries.
• It avoids multiple VAT registrations.

It is often the most efficient approach for low-value online orders.

OSS – One Stop Shop

OSS applies mainly to cross-border EU services and certain movements of goods within the EU between EU establishments. For UK goods exporters, OSS is generally irrelevant.

5. Pricing and Profit Margins – The Hidden Risk

Clients often forget that each EU country sets its own VAT rates, and they vary widely. If they advertise VAT-inclusive prices, their margins will differ from country to country.

For example:

• Sweden’s standard rate: 25%
• Belgium: 21%
• Ireland: 23%
• Luxembourg: 17%

A uniform retail price means an uneven profit margin once EU VAT is deducted.

Adviser tip:
Encourage clients to build a pricing strategy that accounts for these differences, especially if using the IOSS.

6. Online Marketplace Sales (Amazon, eBay, Etsy)

If goods are sold via an online platform and the consignment value is below €150:

• The platform becomes responsible for charging and paying the VAT.
• Your client makes a zero-rated supply to the platform.
• Your client does not need an EU VAT registration for that sale.

However, a key exception applies:

If your client stores goods in an EU warehouse

(e.g. Amazon FBA in Poland, Czech Republic, Germany)

They must register for VAT in the storage country, irrespective of value or B2B/B2C status.

7. The Core Principles to Tell Your Clients

When a UK business starts selling goods to the EU, the main points to communicate are:

• Zero-rating requires proof, keep documentation tight.
• The importer of record determines whether an EU VAT registration is needed.
• IOSS is usually the best option for sub-€150 B2C online sales.
• Price lists may need adjusting because EU VAT rates vary.
• Storing goods in the EU creates an immediate VAT registration obligation.
• NI-based businesses face different rules.
• OSS and IOSS are not interchangeable.

Final Thoughts

Selling into the EU is entirely manageable with the right structure in place. The biggest pitfalls occur when businesses assume that EU VAT operates like UK VAT, or that “someone else” will naturally deal with import taxes. A clear upfront conversation about evidence, importer status, VAT rates, and the advantages of IOSS can keep clients compliant, and save you a great deal of firefighting later.