EU VAT for non-EU companies selling digital services: the One Stop Shop explained

If you sell software, apps, courses or other digital services to consumers in the EU, you owe EU VAT from the first sale, even with no EU presence. The One Stop Shop lets you handle it through one registration. Here is how it works.

William Sunjo M.Operations and compliance editor

Published: 3 August 2026
Reading time: 2 min read

A SaaS company in Toronto or a course creator's company in Singapore sells to individuals in Germany, France and Spain. It has no office or staff in Europe. It still owes EU VAT on those sales, at each customer's local rate, from the first euro. Many small companies find this out late. The One Stop Shop makes compliance manageable.

When EU VAT applies to you

For digital services sold to consumers (B2C) in the EU, VAT is due where the customer is. Digital services include software subscriptions, apps, streaming, e-books, online courses delivered automatically and similar products.

Seller	Customer	Who handles VAT
Non-EU company	EU consumer	You charge the customer's country's VAT
Non-EU company	EU VAT-registered business	Usually the customer, under the reverse charge
EU company	EU consumer, sales under €10,000 a year cross-border	Home country VAT can apply

The €10,000 threshold is for EU-established businesses only. A company outside the EU has no threshold.

The non-Union One Stop Shop

Without OSS you would register for VAT in every country where you have customers. With the non-Union OSS:

Register once, in any one EU member state.
Charge each customer the VAT rate of their country.
File one return each quarter, listing sales and VAT by country.
Pay the total in euros to the member state you registered in. It passes each country its share.

Returns are due by the end of the month after each quarter, even when you had no sales.

Rates vary by country

Standard rates run from 17% in Luxembourg to 27% in Hungary, and some countries apply reduced rates to e-books or courses. Your checkout or billing tool needs each country's rate. Check the Commission's rates page for current numbers, because they change.

Evidence of customer location

For each sale, keep two pieces of evidence that agree: billing address, IP address, card or bank country, or phone country code. Most billing platforms collect these for you.

Selling goods: IOSS

For physical goods worth up to €150 shipped from outside the EU to EU consumers, the Import One Stop Shop lets you collect VAT at checkout and file monthly, so customers do not pay VAT and fees at the door.

Paying the VAT

OSS payments are due in euros to the member state of registration, by bank transfer with the reference it gives you. A euro balance lets you pay without converting dollars every quarter. Rivet's Growth plan includes EUR account details and SEPA payouts beside your USD balance. See Pricing, and our multi-currency account guide for how the balances work.

This article explains the rules in general terms. Check your situation with a VAT adviser.

Questions people ask

Does a US company have to charge EU VAT?

Yes, if it sells digital services such as software, streaming or online courses to consumers in the EU. The VAT is due at the customer's country's rate, with no minimum threshold for businesses established outside the EU.

What is the non-Union OSS?

A simplified scheme for businesses not established in the EU that supply services to EU consumers. You register in one member state of your choice, file one quarterly return listing sales by country, and pay all the VAT there in euros.

Do I charge VAT to EU business customers?

Usually not. For B2B services the customer generally accounts for the VAT under the reverse charge. Collect and check the customer's VAT number, for example with the EU's VIES system, and keep the record.

How do I prove where a customer is?

For digital services, the rules ask for evidence of the customer's location, such as billing address, IP address, or the country of the bank or card. Keep two pieces that agree for each sale.

Sources

Written by

William Sunjo M.

Operations and compliance editor

William covers what happens once a company starts moving money: getting the business verified, paying contractors and suppliers abroad, and keeping card spend under control. William writes for the founder or finance lead who has to make it work this week, and links every rule cited to the text it comes from.