Non-Union OSS for Digital Services 2026 — EU VAT Guide

If your business is based outside the EU and you sell digital products — SaaS, ebooks, online courses, or software — to consumers in the EU, you have a VAT obligation. The threshold is €0. There is no grace period and no small-seller exemption for non-EU businesses.

The Non-Union One Stop Shop (OSS) is the scheme that keeps you compliant without requiring 27 separate national tax registrations.

Who This Applies To

The Non-Union OSS covers “electronically supplied services” (ESS). To fall under these rules, the service must be delivered over the internet with minimal human intervention.

What counts as a digital service (OSS applies):

SaaS and subscriptions: Access to software, cloud storage, or online tools
Downloads: Ebooks, PDF templates, software licences, digital art
Automated courses: Pre-recorded courses where the student gets instant access with no live interaction
Streaming: Paid access to video or audio content

What does not count (OSS does not apply):

Live 1:1 tutoring: If you are teaching in real-time, this is a live service. Place of supply is typically your own country.
Physical goods: These are covered by IOSS or standard import rules
In-person events: A workshop or conference is taxed where the event takes place
Professional services: Consulting or legal advice tailored to a specific client

The Threshold: There Is None

This is the biggest shock for sellers moving into the EU market. EU-based businesses selling cross-border within the EU have a €10,000 threshold before they need to register. For sellers outside the EU, the threshold is €0.

From your very first sale to a consumer in France, Germany, Ireland, or any other EU member state, you are legally required to charge their local VAT rate and remit it to the EU. The obligation starts immediately.

What Non-Union OSS Is

Before OSS, complying with EU digital services VAT meant registering in every EU country where you had customers. The Non-Union OSS simplifies this to:

One registration: You choose one EU member state to be your “Member State of Identification”
One quarterly return: A single return covering all 27 EU member states
One payment: You pay the total VAT to your chosen country, and they distribute it

Choosing a Member State of Identification

Most non-EU sellers choose a country where they have an existing connection (a local entity or banking relationship) or a country whose tax authority is known for accessible, English-language support.

Ireland is a popular choice for sellers from English-speaking countries. Revenue.ie has a straightforward registration process for non-Union businesses, and support is available in English.

You are not obligated to choose Ireland — any EU member state will work. The choice of registration country has no effect on the VAT rates you charge or which countries receive the VAT.

What If You Should Have Registered Already?

If you have been selling digital products to the EU without registering, act now rather than waiting.

Register: You can register for OSS at any point.
Back-file: Most tax authorities expect voluntary disclosure with back-returns covering periods you missed.
Practical tone: EU authorities are generally more interested in getting you into the system than in penalising small businesses that come forward voluntarily.

For a detailed guide on handling late registration — including how to calculate what you owe and how to approach disclosure — see Late EU VAT Registration.

How to Calculate What You Owe

You charge VAT at the rate of the customer’s country. A €50 ebook sold to a Hungarian customer = 27% VAT. The same ebook sold to a German customer = 19%.

Determining customer location

To prove where your customer is, you need two pieces of non-contradictory evidence:

The customer’s billing address
The IP address of the device used to purchase
The country code of their phone number
The country of the bank used for payment

Any two of these that agree is sufficient.

Automated tools

Calculating rates across 27 countries and collecting location evidence manually is unworkable at scale. Common tools that automate this:

Stripe Tax — detects location automatically and applies the correct VAT rate at checkout
Quaderno — handles VAT calculation, invoicing, and location evidence; integrates with Stripe, Paddle, WooCommerce, and Shopify
Paddle / Lemon Squeezy — these platforms act as the Merchant of Record (see below)

What You Cannot Do Through OSS

The OSS is an output-only scheme.

No input reclaim: You cannot use your OSS return to recover VAT you paid on EU business expenses (a hotel in Berlin, a server subscription from a German provider).
13th Directive refunds: To reclaim input VAT, you must use the 13th Directive route — a separate, notoriously slow process. See Reclaiming EU VAT on Expenses.

The Reverse Charge Question

You may receive invoices from EU-based suppliers that mention “Reverse Charge.” As a non-EU business not registered for VAT in the EU, you generally do not need to do anything further with these. You pay the net amount if they zero-rate the invoice, or the VAT-inclusive amount if they do not. You do not report these on your OSS return.

Platform Nuance: Who Owns the VAT Obligation?

Your VAT obligation depends entirely on how you sell.

You are the Merchant of Record

If you use Teachable, Kajabi, Thinkific, or Shopify, you are typically the Merchant of Record. The customer is buying from your business.

Action required: Register for Non-Union OSS and handle the VAT.

They are the Merchant of Record

If you sell via Lemon Squeezy, Paddle, Payhip, or Gumroad, they are the Merchant of Record. Legally, the customer is buying from them, and they resell your product.

Action required: Nothing. They handle all EU VAT, filing, and compliance. You receive a net payout.

Step-by-Step: What to Do This Week

Check your Merchant of Record status. If you use Paddle or Lemon Squeezy, you are covered. If you use Shopify or Stripe directly, proceed to step 2.
Choose a Member State of Identification and register for Non-Union OSS through their tax portal.
Set up VAT calculation. Turn on Stripe Tax or connect Quaderno to your checkout.
Audit past sales. If you have significant past sales without registration, consult an accountant about voluntary disclosure. See Late EU VAT Registration.

Selling from a Specific Country?

The Non-Union OSS scheme applies to any seller based outside the EU. Some countries have specific context:

United Kingdom — Post-Brexit, sellers no longer have a domestic threshold that interacts with EU obligations. Ireland is specifically popular as a registration choice due to English-language support and proximity. See the UK guide to Non-Union OSS.
United States — guide coming soon
Australia — guide coming soon