Collect tax in the European Union

Learn how to use Stripe Tax to calculate, collect, and report tax in the EU.

Businesses selling goods and services to customers in the European Union (EU) might need to collect value added tax (VAT), even if your business isn’t established (based) in the EU. Although the VAT laws are generally similar across the EU, the tax rates and rules might vary per country.

Countries in the EU

Stripe can calculate tax in all the countries in the European Union. Select the country your business is based in if you need help finding the right links to register for tax.

When and how to register

Different rules determine when and how you need to register for VAT, depending on the country your business is located in. After you register with a country, go to Registrations to add your registrations to Stripe in the Dashboard to start collecting tax on your transactions. Learn more about the different registration schemes in our guide.

See Thresholds to get insights about your potential tax registration obligations in each country in the European Union. Stripe also notifies you with email and Dashboard alerts when you need to register to collect tax. Learn more about how the monitoring tool works.

Businesses based in the EU

Domestic registration

Domestic registration is the standard VAT registration for businesses selling goods and services within an EU country. Any business can register, regardless of their physical location.

Some EU countries allow businesses to wait to register for VAT until their sales exceed a certain amount (tax registration threshold). However, other EU countries require all businesses to register, regardless of sales volume. Those countries use tax collection thresholds. Businesses below the threshold can apply for special schemes that exempt them from VAT collection obligations. For detailed information, visit the tax administration websites of each country.

Stripe monitors your registration obligations in the EU countries other than the country where your business is based. You can go to Registrations to add your domestic registrations to Stripe in the Dashboard and start collecting tax.

If you sell digital services or imported low-value goods exclusively through online marketplaces and the marketplace operator is responsible for collecting tax on these sales, you aren’t required to register for VAT in the countries where your customers are located.

Smaller sellers

If you sell to customers in other EU countries, you might need to register in those countries too. You don’t need to register in other EU countries if:

your total sales are under 10,000 EUR in a calendar year and
you sell digital products or physical goods and
your sales are to individuals and not businesses in another EU country

The VAT rate of the EU country your business is based in applies instead. Stripe refers to this simplification rule as the small seller option. We determine whether you’re selling digital products or physical goods using the product tax code you assigned to your product.

When you select the domestic registration option, you’re asked to indicate if your business is a small seller with sales below the 10,000 EUR threshold. You only see this option for the country that you have set as your origin address. If you choose yes, we monitor your cross-border transactions in the EU and notify you when you exceed that threshold.

After you exceed the small seller threshold, you’re required to collect tax in the country your customers are located in. You can do so in two ways:

There are three steps to reflect this change in Stripe:

End your domestic small seller registration in Stripe on Registrations.
Add a new domestic registration for the location where your business is based and select no when you’re asked if you’re a small seller.
Add any other new domestic or One-Stop Shop registrations to start collecting tax in those locations.

Union One-Stop Shop (OSS)

If you sell goods or services to individuals (and not to businesses), you can register for the Union One Stop Shop (OSS) scheme in the EU country your business is based in. You won’t have to register with each EU country you sell goods or services to. Instead, you can register for OSS through your home country VAT website and submit one return for your sales across the EU. You remit all VAT to your local tax authority, who distributes it to the countries where your customers are located.

Learn more about One-Stop Shop. Select the country your business is based in from the table if you need help finding the right links.

Import One-Stop Shop (IOSS)

If you sell physical goods to individuals in the EU and the goods are imported from outside the EU in packages (consignments) that are valued at or below 150 EUR, you can register for Import One Stop Shop in the EU country where you’re based. This means your customer pays VAT when they buy the goods and not when the goods arrive at the border in the EU. After you register, you can collect VAT on your sales of these goods to customers across the EU without having to register in every country. You also only submit one return to the country you’re based in for the sales of these goods. Stripe assumes that goods purchased together are shipped together. If a transaction is over 150 EUR, IOSS won’t apply, which means your customers are charged by Customs when the goods arrive at the border in the EU.

Businesses based outside the EU

If your business is based outside the EU, you may need to register to collect VAT from your first sale in an EU country. There are different VAT registration options for businesses based outside the EU.

Domestic registration

You can register to collect VAT in each EU country your customers are based in. You might be required to appoint a tax representative, depending on the country you and your customer are located in.

Select the country your customer is based in from the list in the sidebar, if you need help finding the right links.

If you sell digital services or goods exclusively through online marketplaces and the marketplace operator is responsible for collecting tax on these sales, you’re not required to register for VAT.

Non-Union One-Stop Shop (OSS)

This scheme is for businesses based outside the EU selling services to individuals in the EU. You can choose which EU country you register in. After you register, you can collect VAT on your sales to customers across the EU without having to register in every country. You also only need to submit one return for all your EU sales to the country you registered in. You don’t need to appoint a tax representative to use the OSS non-Union scheme.

Import One-Stop Shop (IOSS)

If you sell physical goods to individuals in the EU and the goods are imported in packages (consignments) that are valued at or under 150 EUR, you can register in the EU country of your choice for Import One Stop Shop. This means your customer pays VAT when they buy the goods and not when the goods arrive at the border in the EU. After you register, you can collect VAT on your sales of these goods to customers across the EU without having to register in every country. You also only need to submit one return for all your EU sales to the country you registered in. Businesses based outside the EU normally need to appoint a local intermediary to register for IOSS. Stripe assumes that goods purchased together are shipped together. If a transaction is over 150 EUR, IOSS won’t apply, which means your customers might have to pay taxes and customs duties when the goods arrive at the border in the EU.

Union One-Stop Shop (OSS)

Businesses based outside the EU can use this scheme if they sell physical goods that are located in an EU country and shipped to individuals in other EU countries.

How we calculate taxes

Stripe calculates VAT on a transaction using the following pieces of information:

the location of your business
the tax registrations you added to Stripe
the location of the customer
the type of the product sold (based on the product tax code you assigned to your product)
the status of the customer (whether or not they’re a VAT-registered business).

Sales of services

When your business is located in the same country as your customer, Stripe calculates VAT by applying that country’s tax rates.

When you and your customer are in different countries (cross-border sales), there are more complicated rules that apply. These rules determine where the services are considered to be delivered and which country is entitled to collect the tax. Here’s a summary of how Stripe applies tax on sales of services:

Digital goods or electronically supplied services: Generally taxable in the customer’s country. For cross-border sales of digital services within the EU, Stripe Tax prioritises a single address as the customer’s location when calculating tax instead of comparing two pieces of non-conflicting evidence. However, we store and retain all location evidence used in the transaction on the Customer object. If you indicated your business is a small seller, the VAT of the country your business is based in applies.
Services related to immovable property: Taxable in the country where the property is located. Stripe assumes that the property is located in the customer’s country.
Services involving work on movable property: Taxable in the customer’s country as Stripe assumes that the work is performed in the customer’s country.
Services that can be delivered remotely: Taxable in the customer’s country when they’re provided to individuals outside the European Union or other businesses. When they’re provided to individuals in other EU countries, they’re taxable in the seller’s country.
Other services: Taxable in the country your business is based in when provided to individuals. Taxable in the customer’s country when provided to other businesses. These rules apply if you select a product tax code txcd_20030000 General - Services.

Reverse-charge

In some cases, when you sell services to a VAT-registered business in another EU country, the customer is responsible for calculating and remitting the VAT. Those transactions are called reverse charge. Your business must provide an invoice that specifies the reverse charge instead of including a tax amount.

If your customer is eligible for a reverse charge and provides their VAT ID in Stripe, we treat their transactions as a reverse charge and don’t calculate tax for them. If your customer provides a domestic tax identification number, reverse charge doesn’t apply. The transaction is treated as a business-to-consumer (B2C) sale, and VAT rules for B2C transactions are followed.

You can also mark a customer as eligible for reverse charge in the Dashboard or using the API, even if you haven’t collected a tax ID for that customer. For information about which tax IDs Stripe validates, see customer tax IDs.

Stripe doesn’t support the following types of reverse-charge:

Domestic reverse-charge: In some EU countries, a reverse-charge can apply to the sale of some goods and services between businesses in that country. Stripe supports reverse-charge only for cross-border sales, not for sales within the same country.
Cross-border conditions: Some EU countries have conditions under which types of services are eligible for reverse-charge. For example, a country can require you to have a domestic registration. Stripe assumes that all services sold to customers with a business tax ID are eligible for reverse-charge.

Sales of physical goods

When your business is located in the same country as your customer and the goods are shipped within that country, Stripe calculates tax by applying that country’s tax rates.

When the goods are shipped to a customer in a different EU country to your business, Stripe calculates the tax based on the type of customer. Different rules apply depending on if your customer is an individual or a VAT registered business.

Sales to an individual: if the sales are to an individual and your business arranges the delivery (transport), then the goods are taxed using the rules of the country your customer is based in. The exception is if you’re an EU-based business and have indicated your business is a small seller in Stripe. The tax of the country your business is based in applies instead.
Sales to a VAT registered business: the sales are taxable in the country your business is based in. Stripe applies the zero rate if the customer provides their VAT ID number. If you sell to a business in another EU country and your customer doesn’t provide a valid VAT ID number, collect VAT from the country your business is based in. However, Stripe processes these sales in the same way it processes a sale to an individual.

When the goods are shipped to a customer outside the EU, Stripe Tax treats this sale as an export and applies the zero rate. The transaction might still be subject to taxes and customs duties in the country your customer is in. Stripe doesn’t calculate these.

Report and file your taxes

Stripe provides reports of your completed tax transactions in the EU. Go to Registrations to access these reports. Learn more about the different types of reports.

The way you file tax returns and pay (remit) your taxes depend on which types of registrations you have.

Domestic registration: you file your tax returns in each country where you have a registration. Some EU countries might require you to appoint a local tax representative to do this if you’re not based in the EU.
One Stop Shop: you file your tax returns for all your eligible sales across the EU with the country you have a One Stop Shop registration in. If you use different OSS schemes, you need to submit a separate return for each scheme. Learn more about One-Stop Shop.

Select the country you need to file in from the list in the sidebar if you need help finding the right links. You’re responsible for filing and remitting your taxes in the EU. Stripe doesn’t file taxes on your behalf. For more information, browse the Tax Stripe Apps in the App Marketplace.

Marketplace tax liability

The EU uses the term “deemed sellers” to refer to marketplace operators that might have tax collection obligations. To qualify as a deemed seller, the business must set terms or conditions for the sale, process or enable customer payments, or handle ordering or delivery of the product. A business isn’t considered a deemed seller if it only processes payments, lists or advertises goods, or redirects customers to other websites or apps without further involvement in the sale.

The tax collection obligation for marketplace operators usually applies to:

Sales of digital services.
Sales of goods by non-EU sellers to EU individuals, if the goods are located in the EU at the point of sale.
Sales of goods to EU individuals, where the goods are imported into the EU in packages valued at 150 EUR or less.

Marketplace operators facilitating other types of sales might be required to collect VAT on these sales based on other indicators and contractual arrangements.

A marketplace operator that collects VAT on a sale is treated as if it were buying the product from the merchant and selling it to the customer. This only applies for VAT purposes and doesn’t change the commercial position where the title to the product passes from the seller to the buyer.