What VAT do you charge on a digital product in the EU?

Below €10,000 of cross-border sales a year you may charge your own country's VAT rate. Above it, you charge the rate of the buyer's country on every sale and file through the One Stop Shop. The part people get wrong is that the threshold is EU-wide and cumulative — not €10,000 per country.

This is not tax advice and I am not an accountant. It is the structure, with the figures from the European Commission's own pages, checked on 4 October 2026. Whether you personally need to register a business is a national question and is not covered here.

What exactly does the €10,000 threshold cover?

Not everything you might sell.

The EU-wide threshold replaced the old per-country distance selling thresholds and applies to two things: telecommunications, broadcasting and electronic services — a playbook, a template, a course, a piece of software — and intra-Community distance sales of goods, meaning physical items you ship from one EU country to a consumer in another.

It does not apply to other kinds of services, and it does not apply to goods imported from outside the EU. If you sell consultancy hours rather than files, this threshold is not your rule.

Why does "cumulative and EU-wide" matter so much?

Because it arrives sooner than people plan for.

The €10,000 counts every qualifying cross-border sale across the whole EU together. Sell €4,000 to Germany, €3,500 to France and €2,600 to Belgium and you have crossed it, even though no single country is close to the number.

At €20 a product that is 500 sales across the EU in a year. Sounds far away until you have a video that does well, and then it is a Tuesday.

The practical consequence is that this is worth building for before you need it, not after. Not by registering early, but by making sure the thing that calculates the price can be told to use a different rate per country without a rewrite.

What does the One Stop Shop actually do?

It removes the registration problem, not the rate problem.

Without it, charging the buyer's country rate means a VAT registration in every country where you have customers. The OSS lets you register once, file a single return and make a single payment covering what you owe across the EU. Your own tax authority distributes it.

What it does not do is pick the rate for you. You still charge the correct rate for each buyer's country, which means you need to know where the buyer is — and to keep evidence of it.

How does this change what a sale is worth?

In the EU a consumer price is VAT-inclusive. €20 means €20 at the till.

So once you are over the threshold, the same price yields a different amount depending on where the customer lives, because the tax inside it differs:

A spread of about 5% of your revenue, decided by geography. Not a disaster, and not something you can price around — but worth knowing before you build a margin model on a single rate.

Those rates are examples of the spread, not a lookup table. Rates change, and the current list is published by the Commission.

What should you actually do before the first sale?

Three things, none of which require an accountant yet.

Charge VAT-inclusive prices and say so. A consumer-facing price that turns into something larger at the checkout is both bad practice and, in the EU, not allowed.

Record where each buyer is. Your payment provider already captures the country. Keep it with the order. The day you cross the threshold you will need that history, and reconstructing it afterwards is miserable.

Keep the rate in one place in your code. One constant, one function. The change from "my rate" to "their rate" should be a configuration change, not a refactor.

When is it worth letting someone else do this?

When the paperwork costs more than the percentage.

A platform acting as seller of record is legally the one selling to your customer. The registration, the rates and the filing are theirs. That is a real service, and in your first year — when volumes are small and the rules are unfamiliar — it is often the right trade.

A store platform is a different thing. It hosts your shop and gives you tax tools, but the obligation stays with you. Picking one to avoid tax admin is a misunderstanding worth catching early; Shopify or your own checkout works through what each kind actually takes off your plate.

And if you are running your own checkout, how to sell a digital product without a platform covers the delivery side, while what taking your first payment online actually costs covers where the rest of the money goes.

Where these numbers came from

The €10,000 EU-wide threshold and its scope — telecommunications, broadcasting and electronic services plus intra-Community distance sales of goods — are from the European Commission's VAT e-commerce and One Stop Shop guidance, checked 4 October 2026. The 21% figure used in examples is the Dutch standard rate.

Thresholds and rates change, and national rules about registering a business are outside this. When the number stops being hypothetical, that is the moment to pay an accountant for an hour.

The Digital Products Playbook covers the commercial side of selling files — pricing, delivery, and what to build first.