Beginning July 1, 2021, there will be two changes to European Union VAT that will affect sellers who sell and ship their items from their home country to buyers in another country within the European Union (EU).
If you’re a seller in the EU and your annual sales exceed €10,000 in distance sales, you’ll have the option to pay the VAT, based on buyers’ location, on these sales in one VAT return. This is known as One-Stop Shop. You may also be required to separately report VAT on domestic sales in your home country.
You don’t have to charge foreign VAT on goods sold and shipped to other EU countries if you’re a seller located in the EU and your annual distance sales are below €10,000. Instead, you may have to charge your domestic VAT rate and report these sales in your regular domestic VAT return.
If you choose not to register for One-Stop Shop, you may need to register in each EU country you sell to if you exceed that country’s VAT threshold.
If you have any further questions about tax reporting requirements in your location, we recommend speaking with a local tax professional.
How do I register for One-Stop Shop?
If you made over €10,000 last year in EU distance sales, you may need to register for One-Stop Shop with your local tax authority and then make sure your Etsy shop is updated with your One-Stop Shop VAT ID by July 1: