Distance Selling Thresholds

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There are 28 EU member states each having different sales thresholds which can all be found here

When selling products into other EU member states, there are various things that you need to know. Each EU country has its own set of VAT compliance measures that you need to adhere to. Here, we will focus on what you need to know about monitoring your distance selling if you are shipping across the EU. 

Each EU member state’s has their own distance selling threshold with most around €35,000 and some can be as high as €100,000.  It is important to note that only your NET sales count towards this threshold if you are already paying domestic VAT in your home country.  

You must also aggregate all sales that are being shipped from different member states into a single member state. This is essential in order to correctly calculate how close you are to reaching the threshold for that country.

The EU Distance Selling Threshold is calculated between the 1st January and 31st December of a calendar year.

For example:

A company is VAT registered in the UK, Germany and France, and also has warehouses storing goods within those EU member states.  If the company was selling goods to Austria who’s distance-selling threshold is €35,000, all the NET sales from UK, Germany or France would all equate towards the Austrian sales threshold.

The UK warehouse sold 18,000 worth of goods into Austria

The German warehouse sold €15,000 worth of goods into Austria

The French warehouse sold €2,999 worth of goods into Austria

That now totals to €34,999 worth of goods sold which is €1 below the threshold of Austria.  So If you went past that threshold it is your obligation to get VAT registered and pay VAT to Austria going forward. 

If you were to continue selling without registering in Austria you would be failing compliance which could lead to fines/penalties against your business! (LOSING MONEY!!!)

Cross Border VAT Software has a great feature which will notify you when you are getting close to hitting the threshold of a country as each country has different thresholds. 

This is really crucial as each EU member state differs with its sales threshold and you will be less likely to fail compliance. You can monitor the thresholds of each EU member state manually if you choose to.

You will see the real-time percentage of sales within a particular EU member state which you can see in the example below: sales are currently 55% for Austria (AT). 

The sales are also displayed in their correct currencies.

This screen allows you to monitor how your sales are within each EU member state for you to keep track of how close or far from a threshold you are. 

You can also see when a threshold was passed including the date and orders. 

(see below)

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