Key takeaways
- Understand and comply with the EU Distance Selling Regulations to protect consumers.
- These regulations cover information obligations, cancellation rights, payment consent requirements, and VAT & tax rules for digital products.
- Businesses must provide comprehensive information, confirm data in writing and offer a cooling-off period to ensure compliance.
In short: EU distance selling regulations protect consumers who buy without meeting the seller face to face, online, by phone, by mail order or via TV. Sellers must give clear pre-sale information, honour a 14-day cancellation period and get explicit consent for extra payments. For VAT, cross-border B2C sales above €10,000 a year are taxed in the customer’s country.
Update (October 2026): The €10,000 VAT threshold and the OSS rules are unchanged. Three things are new. Since 19 June 2026, online sellers must offer a withdrawal function for cancellations. Since 1 July 2026, the EU charges a €3 customs duty on items in low-value parcels from outside the EU. From 1 July 2028, the VAT in the Digital Age (ViDA) reform extends OSS and makes some platforms deemed suppliers.
Are you planning to launch or grow a distance selling business in the EU? If so, you need to understand distance selling regulations EU rules. These regulations protect consumers and ensure fair business practices across the European Union.
This post gives an overview of distance selling regulations EU rules, their key aspects and the types of distance sales. It also covers how to comply with consumer contracts regulations, VAT and other tax rules. By the end, you should be ready to handle distance selling and avoid common pitfalls.
What are EU distance selling regulations?
EU distance selling regulations are rules that govern sales to consumers who are not physically present at the seller’s premises. In distance selling, there is no face-to-face contact between buyer and seller. This type of selling has grown in recent years, mainly because of ecommerce.
The EU designed distance selling regulations to protect consumers and guarantee fair business practices. They are part of the broader distance selling laws that regulate these transactions.
EU distance selling regulations protect European consumers from scams, fraud and misrepresented products. They cover areas such as minimum contract length, consumer rights and delivery requirements. Sector-specific rules may also apply, covering delivery costs, returns and other consumer rights.
Any business selling at a distance must make sure its goods or digital content are of satisfactory quality. They must be as described and fit for purpose. Leisure services must also meet the required standard.
What are the key aspects of EU distance selling regulations?
The key aspects of EU distance selling regulations are consumer protection, information obligations and cancellation rights. For example, businesses may only charge the basic rate for telephone helplines. Consumers who paid more than the basic rate can claim the extra amount back from the business.
Two sets of regulations apply to distance sales: the Consumer Contracts Regulations and the Electronic Commerce Regulations. If a seller fails to give the customer the required information on cancellation rights before a sale, the cancellation period is extended by up to 12 months.
Businesses must also get explicit consent from the consumer for any extra payment linked to the main contract. Examples include gift-wrapping or faster delivery. Default selections, such as pre-ticked boxes on a website, are not allowed.
What types of distance sales exist in the EU?
The main types of distance sales in the EU are online sales, phone sales, mail order sales, TV shopping channel sales and interactive TV sales. Online sales are now the most common form of distance selling.
Each of these methods has its own set of rules, which we explore in the sections below.
How do the rules apply to online sales and marketplaces?
Online sales include transactions through a business website or a third-party website such as Amazon, Etsy or eBay. ‘Click and collect’ purchases also count. Online sales and marketplaces play a big role in distance selling, so you need to know the rules that apply to them.
For example, businesses selling through internet auction sites must follow the same distance selling regulations. When you sell through an accredited online marketplace such as Amazon, you must follow the platform’s terms. These cover the storage and delivery of goods and the handling of VAT. In some cases, marketplaces may be responsible for charging and paying VAT on sales.
How do the rules apply to mail order and telesales?
Mail order and telesales are distance selling methods where you reach customers by mail or sell products over the phone. Though the approaches differ, both involve remote selling and fall under distance selling regulations.
For telesales, write your scripts in line with distance selling regulations. Explain all product information and contract terms verbally during the same call, then follow up in writing. Sales through TV shopping networks and in-TV movie rentals also fall under distance selling regulations.
How do you comply with Consumer Contracts Regulations in the EU?
You comply with Consumer Contracts Regulations in the EU by giving consumers the required information and respecting their cancellation rights. These regulations give individual customers extra rights, so they stay informed and protected throughout the sale.
Failing to comply can have serious consequences for your business. Make sure you understand the specific requirements and obligations that apply to your industry.
What information must you give consumers?
Before and after a distance sale, businesses must give consumers certain information. This includes any trade organizations or professional bodies your business belongs to. It also includes any authorization scheme that applies to your business. You must also give a trading address that serves as your business premises, pricing, a complaint-handling policy and cancellation rights.
Online distance selling has extra obligations under the Electronic Commerce Regulations. These include details of any trade organizations or professional bodies linked to the business. They also include information on any authorization scheme that applies to the business.
What are the cancellation rights and exceptions?
Consumers can usually cancel a contract for any reason within a 14-day cancellation period, using a standard cancellation form. Some goods are exempt from cancellation rights, such as sealed CDs, DVDs and software discs. Products sealed for health and hygiene reasons are also exempt. Even so, the buyer can still return any faulty goods.
In EU law, these rights come from the Consumer Rights Directive (2011/83/EU). Directive (EU) 2023/2673 added a new duty for contracts concluded online. Since 19 June 2026, the trader must let the consumer withdraw by using a withdrawal function in the same online interface. In practice, this means a clearly labelled cancellation button, not only an email address or a form to download.
Note that a consumer may handle goods more than needed to check whether they are suitable. In that case, the seller may be able to claim compensation from the consumer, up to the contract price. That is why you should give accurate, detailed information before and after the sale. It reduces mishandling and disputes.
How do VAT rules work for EU distance selling?
What are the VAT rules for EU distance sales?
The VAT rules for EU distance sales mean you must charge the right VAT and meet registration and reporting duties. Understanding and correctly applying EU VAT rules is a crucial part of distance selling in the EU. You need to know the tax rules for your products and services.
The sections below explain VAT thresholds, registration and other tax rules for distance selling in the EU.
What is the EU VAT threshold for distance selling?
The EU VAT threshold for distance selling is €10,000 a year, across all cross-border B2C sales within the EU. Above it, VAT applies in the EU country where the customer is located, not where the seller is based. You then charge local VAT, either by registering in that country or through the One-Stop Shop (OSS).
Before July 2021, the EU distance selling threshold for VAT Registration varied by member state. In July 2021, these thresholds were replaced by a single EU-wide threshold of €10,000. This change shows why you should stay up to date with current rules and adjust your business practices.
How is the €10,000 threshold calculated?
You add up all your cross-border B2C sales of goods and digital services to other EU countries, excluding VAT. According to the EU’s OSS portal, the threshold applies while this total stays at or below €10,000 in both the current and the preceding calendar year.
- One total for the whole EU: the €10,000 is not per country. Sales to France, Italy and Spain all count together.
- Sellers established in one EU country only: the threshold is only available to suppliers established in a single member state. Non-EU sellers cannot use it and charge destination VAT from the first sale.
- Crossing it mid-year: the sale that takes you over €10,000 and every later cross-border B2C sale are taxed in the customer’s country.
- Next year: because the preceding year also counts, you cannot return to home-country VAT on 1 January.
- Opting in early: you may choose destination VAT below the threshold, but that choice binds you for two calendar years.
Worked example: a German online shop sells €6,000 to Austrian consumers and €3,000 to Dutch consumers by October. That is €9,000, so German VAT still applies. In November, a €1,500 order to Belgium takes the total to €10,500. Belgian VAT applies to that order, and all later EU consumer sales are taxed in each customer’s country, usually through OSS.
What are the One-Stop Shop (OSS) and Import One Stop Shop (IOSS)?
The One-Stop Shop (OSS) and Import One Stop Shop (IOSS) are schemes that simplify VAT for distance selling businesses. They let you account for VAT due in many EU countries through a single EU country.
The VAT One Stop Shop (OSS) is an optional scheme for businesses making cross-border B2C sales of services, including digital services, and intra-EU distance sales of goods. Using schemes like OSS and IOSS saves distance sellers time and resources. It also helps you comply with VAT rules.
The One Stop Shop has three schemes. Which one you use depends on where you are established and what you sell:
- Union scheme: for EU-established businesses making intra-EU distance sales of goods and B2C services. Marketplaces acting as deemed suppliers also use it.
- Non-Union scheme: for businesses established outside the EU that supply B2C services to EU consumers.
- Import scheme (IOSS): for distance sales of goods imported from outside the EU in consignments worth €150 or less. Excise goods are excluded.
How are digital content and services treated in EU distance selling?
Digital content and services follow the same distance selling regulations as other goods and services sold at a distance. They are a growing part of distance selling in the EU. However, some extra tax rules apply specifically to digital products.
We explore these rules in the next section.
What are the VAT rules for digital products?
Digital products sold at a distance face extra VAT rules, mainly on collecting evidence of the customer’s location and keeping records. These rules help businesses selling digital products stay compliant with EU distance selling regulations. They also support consumer protection.
The VAT One Stop Shop (OSS) mentioned above is one scheme that suits digital products. By joining this optional scheme, you can greatly simplify your VAT obligations for digital services to customers in the EU. This saves time and resources while keeping you compliant with VAT rules.
What is changing for EU distance sellers in 2026 and beyond?
The core VAT rules for distance selling stay in place in 2026. The changes come from customs reform for low-value imports and the ViDA package, adopted as Council Directive (EU) 2025/516.
What is the €3 customs duty on low-value parcels?
Until 30 June 2026, goods worth €150 or less were exempt from customs duty. From 1 July 2026, the EU charges a flat €3 duty on items in small parcels valued under €150. It applies to parcels sent directly to EU consumers (Council of the EU). The duty is charged per category of item, identified by tariff sub-heading. A parcel with silk blouses and wool blouses therefore pays €6.
This is an interim measure. It applies from 1 July 2026 to 1 July 2028 and may be extended. Once the EU customs data hub is running, normal customs tariffs will replace it. The €3 duty is a customs duty, separate from VAT.
What does ViDA change for distance sellers?
ViDA phases in changes between 2025 and 2035. These are the confirmed dates that matter most for distance sellers:
- 1 January 2027: technical amendments to the OSS and IOSS schemes apply (Directive (EU) 2025/516, Article 2).
- 30 June 2028: last date for dispatching goods under the call-off stock simplification. The simplification ends on 30 June 2029.
- 1 July 2028 (single VAT registration): OSS extends to certain domestic sales to consumers. A new special scheme covers transfers of own goods to stock in another EU country. A mandatory reverse charge applies more widely where the supplier is not registered in the country of taxation (Spanish Tax Agency, AEAT).
- 1 July 2028 to 1 January 2030 (platforms): platforms that facilitate short-term accommodation rental or passenger road transport become deemed suppliers when the provider does not charge VAT. Member states must apply this from 1 January 2030 at the latest.
- 1 July 2030: near-real-time digital reporting starts for intra-EU B2B transactions, based on e-invoices.
For marketplace sellers of goods, the existing deemed-supplier rules continue. A marketplace is treated as the supplier when it facilitates imports of €150 or less, or EU sales by sellers established outside the EU. For more detail, read what the adopted ViDA package means for businesses.
How do you ensure compliance with EU distance selling regulations?
To ensure compliance with EU distance selling regulations, follow the rules set by the EU and the relevant countries. Give customers full information before the agreement and confirm specific data in writing. Offer a cooling-off period. Meet your contract obligations within thirty days or by the agreed delivery date, unless agreed otherwise.
A commercial solicitor can help you follow distance selling regulations and review your operations and sales records. Stay informed and proactive about the latest distance selling regulations. This helps you avoid pitfalls and give customers a smooth experience, which builds trust and loyalty.
Conclusion
Understanding and complying with EU distance selling regulations is vital for businesses in this space. Learn the key aspects of these regulations, including consumer protection, information requirements and cancellation rights. This helps you give customers a positive experience and avoid legal pitfalls.
Also stay up to date with VAT thresholds, registration processes and tax rules for digital products. This will streamline your distance selling operations and keep you compliant. With the right knowledge and approach, your business can thrive in distance selling and succeed in an ever-evolving digital landscape.
Do you need help with your VAT compliance? Book a free call with one of our VAT experts to find bespoke solutions for your business, optimize your VAT costs, and reach millions of new potential customers.
How Taxually handles this
Taxually’s CrossTax handles VAT registration, VAT, OSS and IOSS returns and fiscal representation in the countries you sell into, and checks your sales data against 250+ validation rules before each filing. OneTax then pays every tax authority with one bulk payment in your chosen currency.
Related guides
Frequently asked questions
Do distance selling regulations apply after Brexit?
Yes, distance selling regulations still apply after Brexit, with new customs regulations and other changes in place for sales of physical goods to the EU.
These changes include the need for businesses to register for an EU EORI number, and to complete customs declarations for goods entering the EU. They also include the need to pay VAT on goods entering the EU, and to comply with EU regulations.
What is the distance selling threshold for VAT in the EU?
The new EU distance selling threshold for VAT is €10,000, applicable to all sales within the EU territory excluding the seller’s country of establishment, effective from July 2021. It covers cross-border B2C sales of goods and digital services combined, excluding VAT, and is tested on both the current and the preceding calendar year. It is still €10,000 in 2026.
What is the purpose of EU distance selling regulations?
The purpose of EU distance selling regulations is to protect consumers and ensure fair business practices within the European Union.
What types of distance sales are recognized in the European Union?
The European Union recognizes online, phone, mail order, TV shopping channels, and interactive TV sales as types of distance sales.
What happens when I go over €10,000 in EU distance sales?
From the sale that takes you over €10,000, you charge VAT at the rate of each customer’s EU country. You can declare that VAT in every country through one quarterly OSS return instead of registering in each country.
Does the €3 EU customs duty on small parcels affect distance sellers?
It affects sellers shipping goods from outside the EU to EU consumers. From 1 July 2026 to 1 July 2028, a €3 customs duty applies to each category of item in parcels valued under €150. Sales of goods shipped within the EU are not affected.
How will ViDA change OSS for online sellers?
From 1 July 2028, ViDA extends OSS to certain domestic sales to consumers and adds a special scheme for transfers of own goods. Platforms for short-term accommodation and passenger transport become deemed suppliers between 1 July 2028 and 1 January 2030, depending on the member state.
