The short version
Typically you register for VAT in your own EU country and enter that registration in Shopify under Settings › Taxes and duties › European Union; once your combined sales to other EU countries reach €10,000, you charge each customer's country rate and can collect it through one OSS registration.
Under €10,000, a micro-business registration lets you keep your home country's rate; from outside the EU, physical goods in orders of €150 or less start with IOSS instead.
Basic Tax is available in the EU only if your store was set up to collect tax there before May 13, 2026, and OSS works only with Shopify Tax or Basic Tax.
Shopify charges the VAT, but filing and paying your returns stays with you.
Three things decide the VAT on an EU order from your Shopify store: where your business is registered, whether your combined sales to other EU countries have reached €10,000, and which VAT registrations you have entered under Settings › Taxes and duties › European Union. EU VAT is calculated by destination, so once you pass the threshold the customer's country sets the rate, and your registrations decide where Shopify Tax collects it.
Shopify automates charging the tax; it doesn't file or pay your returns. To skip to your own route, the five-question quiz names the registrations to add. Shopify's own setup page says it's your responsibility to consult local tax authorities or a tax professional on the rates you charge and on filing correctly, so read this as the map, not as tax advice.
Do You Need to Register for EU VAT Before Selling on Shopify?
Key takeaway
Shopify words the starting point with care: typically, if you intend to sell to other countries in the EU, you need to register with the tax authorities in your own country to charge VAT. Everything else in this guide builds on that registration.
The rate itself is national. EU VAT is calculated according to destination-based sourcing, which means tax is charged to a customer based on their location, and per Shopify's EU tax reference the minimum value of this tax is 15%, but each member country sets their own rates. This guide doesn't list the national rates; on Shopify Tax or Basic Tax, Shopify applies them from the registrations you enter.
The €10,000 cross-border threshold
Key takeaway
Shopify's reference page states the rule in two halves, and a physical presence elsewhere adds a third case. Find your row:
Which VAT you charge, and which registration it takes in Shopify
| Your situation (business established in an EU country) | The VAT you charge | Registration type to add in Shopify |
|---|---|---|
| Combined sales to all other EU countries under €10,000 | You can choose to charge your home country's VAT rate in other EU countries and remit VAT to your home country's government | Micro-business exemption to charge your local VAT rate, or OSS if you want to charge VAT based on the location of your customers |
| Combined sales to all other EU countries of €10,000 or more | The VAT rate in your customer's location, on all sales to other EU countries | OSS (Union Scheme), or a country-specific registration in each country; registering for the OSS is optional, and it needs Shopify Tax or Basic Tax |
| A significant business presence in another EU country, such as a physical store or a fulfillment center | You might still be required to register to collect VAT in that country | A country-specific registration for that country |
From Shopify's EU tax reference and its Tax services in the EU page (registration types), read October 21, 2026.
The threshold is no longer national. As of July 1, 2021, distance selling thresholds for individual countries no longer apply, and the European Commission's OSS page states that the previous thresholds for distance sales of goods within the EU have been abolished and replaced by a new EU-wide threshold of EUR 10 000.
On a separate page about the One Stop Shop, the Commission sets three conditions for the threshold: the business is established in only one Member State, the goods are dispatched from that Member State (or the sales are telecommunications, broadcasting or electronic services), and those sales to non-taxable customers, such as consumers, in other EU countries don't exceed €10,000, without VAT, in the current and the preceding calendar year.
What liability insights tell you, and what they don't decide
Key takeaway
If you use Shopify Tax, your sales and locations are automatically monitored to help you determine whether you have tax liabilities in specific EU member states. You receive monthly notifications based on the information available in your store, and a status next to your registration shows whether you're below, approaching, or have exceeded a registration threshold. Shopify's tax-service comparison lists these insights for Shopify Tax only, not for Basic Tax or Manual Tax.
The registrations steer the collecting too: your VAT registrations determine where VAT is collected by Shopify Tax. The notification is a signal to check, and Shopify's setup page is plain about whose call the threshold is:
It's your responsibility to determine if your business exceeds the VAT registration threshold.
If your business is outside the EU
Key takeaway
Most of this guide assumes a business established in an EU country, because that is who the €10,000 threshold is described for. Selling into the EU from outside it starts with imports and IOSS, covered in our guide to whether your Shopify store needs an IOSS number. In outline:
- From the United Kingdom: if you're based in the United Kingdom and selling to the European Union, Shopify says you need IOSS for physical goods or Non-Union OSS for digital goods.
- IOSS: for orders that are equal to or less than €150 (calculated before VAT and shipping), you can collect VAT at checkout using IOSS.
- An intermediary: the Commission says a taxable person established outside the EU is required to appoint an intermediary to use the import scheme.
Selling into Great Britain is a separate regime with its own registration rules; see whether you need UK VAT to sell into Great Britain.
OSS or Separate Country Registrations?
Key takeaway
At €10,000 or more, every sale to another EU country carries that country's rate, and you need a way to account for it. OSS means one registration for all those cross-border sales, on Shopify Tax or Basic Tax. Country by country means a registration in every country where you charge its VAT, with filing and paying VAT in each, which is the route left on Manual Tax. Registering for the OSS is optional.
What OSS changes, and what it doesn't
Key takeaway
In Shopify's words, the OSS scheme allows merchants to collect and remit VAT for sales in all EU member countries, rather than registering for each member country individually. In the admin, an OSS registration collects VAT for all cross-border orders, but not local orders.
Your own country is the exception. If OSS is used, a local registration is still required to collect VAT in the local country, and Shopify's update page puts it plainly:
Local sales require a local tax registration for that country, and aren't covered by the OSS.
Three more things to know before you choose it:
- It needs the right tax service. You can only use OSS if your store uses Shopify Tax or Basic Tax as your tax service, so a region on Manual Tax can't use it.
- It's one of three schemes. The Commission's One Stop Shop covers the non-Union scheme, the Union scheme and the import scheme; the OSS registration in Shopify is the Union scheme, and the import scheme is IOSS.
- It doesn't file anything. The OSS return is still yours, on a schedule covered in what Shopify leaves to you.
The five VAT registration types in Shopify
Key takeaway
The type of VAT registration you need depends on where your business is located and what you're selling, and Shopify's table of EU VAT registration types has five rows:
EU VAT registration types in Shopify
| Registration type | Who it's for | What to know |
|---|---|---|
| OSS (Union Scheme) | A business based in the EU selling physical or digital goods to other EU countries | Collects VAT for all cross-border orders, but not local orders |
| IOSS | A business based outside the EU selling physical goods of €150 or less (calculated before VAT and shipping) to EU consumers | Can't be used at the same time as OSS in Shopify |
| Non-Union OSS | A business based outside the EU, selling digital goods or services to EU consumers | One of the Commission's three One Stop Shop schemes, beside the Union scheme and the import scheme |
| Micro-business exemption | A business based in one EU country with cross-border sales under €10,000 | Collects VAT on cross-border and local orders at the VAT rate of your micro-business registration country |
| Country-specific | A business that files separate VAT returns in each EU country it sells to, or needs a registration in a particular country: its own, or one where it has a significant business presence | A local registration collects VAT for orders into that country only, and your own country needs one even with OSS |
From Shopify's Tax services in the EU and EU tax reference pages, with the scheme list from the European Commission's One Stop Shop portal, read October 21, 2026.
The micro-business route is the one that expires. If you have a micro-business exemption and later require VAT registrations in other countries, you're no longer qualified to be exempted. Adding a location in another EU country triggers it in the admin: with a micro-business registration, the system starts charging destination VAT automatically, and you'll need to update your registration type to OSS or country-specific.
OSS and IOSS together: where Shopify's own pages disagree
Key takeaway
Using OSS and IOSS at the same time isn't supported, so the option to collect VAT on orders shipped from outside the EU to customers within the EU using IOSS is disabled. Shopify's notes on the update repeat it for mixed stores: if you have locations both inside and outside the European Union, you can't use both OSS and IOSS in Shopify simultaneously.
Shopify's setup page adds a caution for EU-based stores: if you're located in the EU or you collect VAT on sales within the EU, collecting VAT when you ship to customers in the EU from outside of the EU isn't supported. What happens to those orders once OSS is on is where two Shopify pages part ways:
In question: whether an OSS registration covers EU orders that ship from a location outside the EU.
Tax services in the EU (read October 21, 2026): “In this case, you should set up OSS, and VAT is applied on all orders to European Union customers regardless of the fulfillment location.”
EU tax reference (read October 21, 2026): “OSS registrations don't apply when the selected fulfillment location is outside the EU.”
What to do: test the case with a draft order before live orders and check whether VAT appears. Let that result and your tax advisor decide, not either page alone.
The EU's own rules on holding both schemes, and how Shopify's admin departs from them, are set out in our answer on whether you can use both IOSS and OSS.
Shopify Tax, Basic Tax or Manual Tax: What Your EU Store Can Use
Key takeaway
If your store is located in the European Union, you can select Shopify Tax, Basic Tax, Manual Tax, or use a third-party tax service provider, depending on which tax services are available to your store. Two questions decide it: whether Basic Tax is still open to you, and what each service does for VAT.
For a store setting up the EU now, Basic Tax is closed, which leaves Shopify Tax, Manual Tax or a third-party provider, and of Shopify's three services only Shopify Tax then supports OSS.
Who can still use Basic Tax in the EU?
Key takeaway
Shopify repeats the cutoff on each of its EU tax pages:
Basic Tax is available in the European Union only if your store was set up to collect tax there before May 13, 2026.
The tax-service page adds two conditions: Basic Tax isn't available if your store currently uses Manual Tax in the region, and availability is determined separately for each region. If you already use Basic Tax, you can continue to use it without interruption; if it isn't available to your store, you can use Shopify Tax or manual tax settings.
Weigh a change before you save it: if Basic Tax isn't available to your store for a region, you can't switch back to it after you save a different tax service for that region. Whether a move back is ever possible is answered in switching from Shopify Tax to Basic Tax and back.
The same cutoff applies in Canada and the United Kingdom, where Basic Tax is also available only for regions where your store was set up to collect tax before May 13, 2026. Our guide to sales tax in Canada on Shopify covers the Canadian side.
To change the service for the EU, go to Settings › Taxes and duties › European Union and open the menu on the Tax service card. Depending on your current tax service, the option is labeled Upgrade service, Switch service, or Downgrade service.
- Settings
- Taxes and duties
- European Union
What each tax service does for EU VAT
Key takeaway
Shopify's comparison for the EU and UK reads as a grid, with OSS added from its setup page:
What each tax service does for EU VAT
| Feature (EU and UK) | Shopify Tax | Basic Tax | Manual Tax |
|---|---|---|---|
| Automatic rate calculations using tax registrations | Included | Included | Not available |
| Automatic rate calculations using product categories | Included | Not available | Not available |
| Automatic proportional shipping tax using product categories | Included | Not available | Not available |
| Generate and display VAT invoices | Included | Not available | Not available |
| B2B tax exemptions | Included | Included | Not available |
| Automatic suggestions and insights on your potential tax liabilities based on where you ship and sell to | Included | Not available | Not available |
| OSS registration | Included | Included | Not available |
From the EU and UK table on Shopify's Choose a tax service page and, for OSS, its EU tax setup page, read October 21, 2026.
Two notes from the same pages. Shopify asks you to try to keep your tax services consistent, because mixing Manual Tax with Basic Tax or Shopify Tax across the EU and UK can cause problems with duties. And Shopify Tax features are available to all merchants regardless of your plan type.
Shopify Tax has a price once you reach its free threshold, and Shopify Tax pricing depends on when your store was created. Per the Shopify Tax pricing page, a store located in the European Union pays a 0.25% fee on Basic, Grow, or Advanced and 0.15% on Plus once it reaches €100,000 in sales, with fees capped at €0.99 per order. That threshold counts sales in a single calendar year for stores created before May 13, 2026, and lifetime sales for stores created on or after that date.
Whether a yearly ceiling also sits on top is a separate question, answered in whether Shopify Tax has a yearly cap.
Which EU VAT Route Fits Your Store?
The tables above answer one question at a time. This one crosses five: where your business is registered, your sales to other EU countries, stock in another member state, where orders ship from, and your tax service. The result names the registrations to add in Settings › Taxes and duties › European Union and what stays with you.
Which EU VAT registrations does your store need?Five questions on location, sales, stock, shipping origin and tax service — the result is a route, not a verdict
How to Add Your EU VAT Registrations in Shopify
Key takeaway
The order is fixed: the registration comes from your tax authority, and Shopify only records it. Shopify's setup page is written for new stores; a store already selling into the EU follows the update notes further down.
Before you start: the EU has to be in your tax regions
Key takeaway
If VAT isn't charged at all, one of the fixes Shopify lists is to create an EU-specific shipping zone: the EU tax region appears automatically after this is set up. If the EU still isn't listed, see how to add a country to Tax regions.
By default, VAT is collected on taxable orders to all EU countries because the EU is treated as one tax region, so one row in the Tax regions table carries the whole EU. Every step below starts from that row.
- Settings
- Taxes and duties
Add your local VAT registration
Key takeaway
- In your Shopify admin, go to Settings › Taxes and duties and open European Union; Shopify's setup page places it under Regional settings.
- In the Collect VAT in an EU country section, click Collect VAT.In Shopify adminOpen in your store
- Settings
- Taxes and duties
- European Union
Step 2 starts at Collect VAT in the Collect VAT in an EU country section. - Choose the country you're registered in and enter your VAT number.In Shopify adminOpen in your store
- Settings
- Taxes and duties
- European Union
Step 3: the Collect VAT dialog opens on Registration country. - Optional: if you're registered to collect VAT in additional countries, click Collect in another location to add additional VAT numbers.
Shopify's EU tax setup page shows the same screens for a new store.
Add OSS or a micro-business registration for cross-border sales
Key takeaway
- On the same European Union page, in the Collect VAT cross-border section, click Collect VAT.
- Select Collect using a One Stop Shop (OSS) registration, then enter the country and number of your OSS registration.In Shopify adminOpen in your store
- Settings
- Taxes and duties
- European Union
OSS and the home country registration sit side by side, each with its own country and VAT number. - If your sales outside your country stay under €10,000 and you plan to submit a VAT return to your local tax authority, select Collect using your home country registration instead: that is the micro-business registration.
With OSS, the two registrations split the work: the local one covers orders into your own country and OSS covers cross-border orders. A micro-business registration collects VAT on both cross-border and local orders at your registration country's rate. Whether a local registration can sit next to a micro-business registration is a point where Shopify's pages disagree: its EU tax reference page says local registrations can also be added, while its page on managing EU registrations says additional VAT registrations aren't supported with the micro-business exemption and that you must first change your registration type to One-Stop Shop or Country-specific.
Check the result with a draft order
Before processing live orders, check your VAT settings with a draft order; draft orders don't affect your store's order count or tax reports, so the test leaves nothing behind. Our guide to how tax is worked out on a draft covers what the draft takes into account.
Already selling to the EU? What changes when you update
Key takeaway
Shopify's setup page says that if you're already selling on Shopify, you refer to its update page instead; that page now carries the title Tax services in the EU. After you add a VAT registration, Shopify automatically sets the tax rates that apply in the areas where you've registered. Three rules come with the update:
- Rounding: after you update your settings to use EU tax features, tax amounts are rounded at the line-item level.
- Shipping: on Shopify Tax, proportional shipping tax is calculated automatically from the weighted average of product tax rates; otherwise, by default, shipping costs are taxed with the highest standard VAT rate already applied to products within the order.
- Digital goods: in the European Union, digital goods are taxed in the same way as physical goods. You must activate the option to charge VAT on digital goods in your tax settings.
Showing Prices With VAT Included, Country by Country
Key takeaway
Shopify's dynamic tax-inclusive pricing allows you to automatically include or exclude taxes in your product prices based on your customer's region when you sell internationally. You switch it on per market: open Markets, choose the market, and under Taxes and duties, in the Tax display menu, select Dynamic tax display. The full walk-through is in how to show prices with or without tax by country.
- Markets
- Germany
Three limits come with it:
- Overrides: any tax overrides won't be recognized when using dynamic tax-inclusive pricing.
- Shipping: dynamic tax-inclusive pricing adjusts product prices only.
- Product pages and cart: prices are displayed correctly at checkout, but product pages and the cart don't display them correctly unless you sell in local currencies with Shopify Payments, or the customer meets the address and cookie conditions Shopify lists.
Your store address in the Shopify admin is used to determine your home tax rate, which is the rate your prices start from.
Not every country shows tax inside the price: all other countries and regions have their prices displayed without taxes included. Which countries are on Shopify's list is answered in which countries Shopify includes tax in prices for.
VAT Numbers, Reverse Charge and VAT Invoices
Key takeaway
Business buyers bring two questions: will the VAT come off when they give a valid number, and can they get a proper VAT invoice?
Validating B2B customers' VAT numbers
Key takeaway
The reverse charge (EU/UK) exemption fully exempts VAT on orders that are shipped to customers within the European Union or the United Kingdom, provided that the destination country is different from the country of the fulfillment location. Shopify can check the buyer's number at checkout, with conditions:
- It works for customers that use guest checkout or Shop Pay checkout.
- VAT validation isn't currently available for B2B-specific checkouts.
- It's available only for stores that use Shopify Tax to calculate tax in the European Union or the United Kingdom.
- An active fulfillment location in the European Union is required for the exemption to work properly.
The checkout field for a company VAT number has two options, Don't include and Optional. B2B tax exemptions themselves are available on Shopify Tax and Basic Tax, not on Manual Tax. What the B2B-checkout gap means for wholesale buyers is covered in whether EU B2B customers can validate a VAT number at checkout.
How do you get a VAT invoice from Shopify?
Key takeaway
VAT invoices are a Shopify Tax feature: Shopify's tax-service table lists generating and displaying them under Shopify Tax only. They are generated only after you activate them: in the VAT Invoices section, select Generate and display invoices when orders are placed. When activated, they appear on the order status page. Shopify's VAT invoices page says they aren't automatically emailed to customers, while its page on Shopify Tax in the EU describes a Generate and Send invoices option. If you need to share a VAT invoice directly with a customer, you can download the invoice PDF and email it to them.
Two of Shopify's conditions catch stores out. The order has to be placed through Shopify checkout, not through a third-party channel or app, and automatic VAT invoices aren't currently supported for orders shipping to Portugal.
Before you generate VAT invoices, make sure your VAT registrations are complete and up to date, so the correct VAT ID is displayed on the invoice. What a full EU VAT invoice has to carry is set out in what EU and UK VAT rules ask of an invoice.
What Shopify Leaves to You: Returns and Payment
Key takeaway
Shopify draws the line at the top of its EU tax section:
You can use Shopify to automate charging taxes, but you can't use Shopify to remit or file your taxes for you.
Filing and paying the VAT are yours. Questions about filing VAT returns or remitting taxes are on Shopify's own list of things to take to a tax professional or local tax authority.
The calendar comes from the scheme. Per the European Commission, the VAT return is submitted quarterly in the non-Union and in the Union scheme and monthly in the import scheme.
Shopify won't file it for you either: Shopify's automated filing is a US-only Shopify Tax feature that is closed to new enrollment, and it files returns for sales made through December 31, 2026, as our guide to US sales tax on Shopify explains.
For the figures, Shopify's tax reports page says several reports are available to help you file and remit your taxes or to provide to your tax accountant. The Taxes report provides a summary of the sales taxes that were applied to your sales, and Total sales by order helps you or your accountant get the information needed to work on returns.
For how filing works across Shopify more broadly, see whether Shopify files sales tax for you.
Work Through It in This Order
Key takeaway
Steps one and two come before anything in the admin, and step four comes before steps five and six, because OSS works only on Shopify Tax or Basic Tax.
- If the quiz put you outside the EU and your EU orders ship from outside it, steps five to seven give way to IOSS (or Non-Union OSS for digital goods or services); start from selling into the EU from outside it. If your EU orders ship only from inside the EU, the quiz points you to confirming a registration where you have a significant business presence, which is step seven.
- Under €10,000, step six can be the micro-business registration, which also covers local orders; Shopify's pages disagree on whether a local registration can sit next to it (see the note under step six), so check what your admin allows before step five. Step seven is the moment the micro-business registration ends.
- If some EU orders ship from outside the EU, run the draft-order test in step eight on those orders before you rely on step six.
EU VAT Setup ChecklistNine steps from checking the threshold to filing. Tick them off as you go — progress is saved in this browser.
EU VAT Setup Checklist
Nine steps from checking the threshold to filing. Tick them off as you go — progress is saved in this browser.
Compare your combined sales to other EU countries with €10,000 and list every EU country where you hold stock or run a physical store; determining the threshold is your responsibility.
Before you tick this off
- Totalled your sales to other EU countries, without VAT, for this and last calendar year
- Listed every country where you hold stock or run a store
- Asked a tax advisor where the answer wasn't clear
Typically, selling to other EU countries means registering with the tax authorities in your own country to charge VAT; register for OSS too if you'll use it.
Before you tick this off
- Received your VAT number
- Registered for OSS if you'll use it (registering for the OSS is optional, and Shopify allows it below €10,000 too)
Create an EU-specific shipping zone if you don't have one; the EU tax region appears automatically after this is set up.
Before you tick this off
- European Union appears under Settings › Taxes and duties
Basic Tax is available only if the region was set up to collect tax before May 13, 2026; otherwise use Shopify Tax or manual tax settings, and remember that OSS needs Shopify Tax or Basic Tax.
Before you tick this off
- Checked which service the European Union page shows
- Know that, where Basic Tax isn't available, saving another service can't be switched back
In Settings › Taxes and duties › European Union, click Collect VAT in the Collect VAT in an EU country section, then choose your country and enter your VAT number.
Before you tick this off
- Local registration added for your own country
- VAT number entered exactly as issued
Under Collect VAT cross-border, choose Collect using a One Stop Shop (OSS) registration, or Collect using your home country registration if your sales outside your country stay under €10,000.
Before you tick this off
- Cross-border registration added
- Kept the local registration beside OSS
For each EU country where you have a significant business presence, such as a physical store or a fulfillment center, register there if required and add that registration under Settings › Taxes and duties › European Union.
Before you tick this off
- Added a registration for each country that requires one
- Updated a micro-business registration to OSS or country-specific if you added an EU location
Before live orders, create a draft order to check the VAT on each kind of destination; draft orders don't affect your store's order count or tax reports.
Before you tick this off
- Tested an order into your own country and one into another EU country
- Tested any order that ships from outside the EU
Shopify doesn't file or remit VAT for you; file the OSS return quarterly under the Union scheme, working from the Taxes report or Total sales by order.
Before you tick this off
- Named who files each return
- Know which report the figures come from
The Bottom Line
Key takeaway
On Shopify Tax or Basic Tax, Shopify sets the rates from your registrations, but verifying that you charge the correct rates stays your responsibility. The work is choosing which registrations to hold and keeping them current as your sales and stock move.
Frequently Asked Questions
Front-end developer specializing in Shopify since 2017. Experienced in building custom Liquid themes, optimizing storefront performance, and integrating third-party apps. Directs the editorial process behind Ecom Store Pro: sets its topics and the rules every AI-written page must pass before publication.
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