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EU expansion considerations post-Brexit: A practical VAT roadmap for UK online sellers

August 28, 2025

While Brexit has been in place for a number of years, the impact for UK sellers continues. The EU remains a potential marketplace for companies to export to, however the VAT, customs and compliance landscape can deter growth plans

This guide covers five core areas every CEO, CFO and Operations Director should understand as they prepare to scale up EU sales.

Brexit changed the VAT rules permanently

Before Brexit, shipping to EU customers was simple. There was no customs border or duty, no import VAT and UK VAT rules were aligned with EU rules. Post-Brexit, every shipment from the UK into the EU is now treated as an import into the EU.

This means:

Import VAT and, in some cases, customs duties apply at the EU border.

You must comply with the VAT rules of the destination country.

Your customers may be required to pay customs duties and/or import VAT upon delivery. You may also be required to register in multiple EU countries, depending on the delivery terms.

There are special EU VAT schemes to help ease the VAT compliance burden. For low-value consignments (goods under €150) shipped from the UK to EU consumers, the Import One Stop Shop (IOSS) allows sellers to collect VAT at checkout and clear goods through customs faster. For B2C sales made from a warehouse inside the EU to customers in multiple Member States, the One Stop Shop (OSS) enables a single VAT return for all those sales.

Shipping from the UK vs storing goods in the EU

There are two different compliance models to consider, as your fulfilment model fundamentally determines your VAT obligations.

Shipping directly from the UK:

Each sale is an import into the EU, subject to import VAT and possible customs duties.

You may choose Delivered Duty Paid (DDP) to cover VAT and duties on behalf of the customer, avoiding surprise charges and delivery delays.

For sales under €150, IOSS can simplify VAT collection and customs clearance.

For sales over €150 though, IOSS is not applicable, and you may be required to register for VAT in multiple countries where your customers are based.

Holding stock inside the EU:

Storing goods in an EU country requires immediate VAT registration there, even before making your first sale. Storage in several countries may trigger multiple VAT registrations.

Importing goods into the EU will also require a EORI number and potentially an indirect representative to help with customs declaration.

Once goods are in the EU, cross-border B2C sales to other Member States can be reported via OSS (instead of multiple local returns).

Marketplaces vs own website: who handles VAT?

The VAT rules differ depending on your sales channel:

Own website: you are responsible for VAT registration, charging the correct VAT rate, and filing returns in each relevant country, or using OSS/IOSS where possible.

Marketplace (Amazon, eBay etc): Often the marketplace is deemed the supplier for VAT purposes for B2C sales and will collect and remit VAT. However, you may still need VAT registrations if you store goods in the EU or sell B2B.

Choosing the right sales channel can reduce admin, but each model has its own documentation, reporting and compliance requirements.

VAT rates and duties vary across the EU: so price accordingly

The EU’s standard VAT rates range from 17% in Luxembourg to 27% in Hungary, with reduced rates for certain goods (for example books, food and children’s clothing). Customs duties depend on the HS code classification of your products and their country of origin.

To protect your profit margin, while remaining competitive:

Adjust by market to reflect local VAT rates and duty costs.

Use DDP pricing for better customer experience.

Apply reduced rates correctly to the qualified products.

Reclaiming import VAT

Import VAT is reclaimable in most cases, provided:

You have a valid VAT registration in the country of import.

Your customs and VAT return data match.

You meet local documentation and invoicing requirements.

Some countries offer special regimes that improve cash flow by avoiding upfront payment of import VAT:

Netherlands – Article 23 licence allows import VAT to be reported (but not paid) on the VAT return.

France – reverse charge on import VAT applies automatically, with the VAT self-declared and recovered on the same return.

Not using these schemes where eligible effects cash flow or potentially losing the right to reclaim VAT entirely.

The EU remains one of the largest consumer markets in the world, post-Brexit UK companies need to include VAT planning and operational alignment into their growth strategy.

Whether you choose to ship directly from the UK under DDP/IOSS or store goods within the EU using OSS, your VAT strategy impacts more than the finance team. Consideration around pricing, logistics and cash-flow planning may affect the operational teams as well.

Professional VAT support, for registrations to ongoing compliance, is often the most cost-effective way to avoid penalties, speed up market entry and protect profit margins.

Using a platform such as Tax Desk makes VAT compliance simple. With an experienced team supporting UK companies exporting into the EU and beyond, our platform supports VAT compliance in 60+ countries, offering a single point of control for registrations, filings and rate management.

Download our latest guide : EU expansion considerations post-Brexit: A practical VAT roadmap for UK online sellers