Key takeaways
- Europe is the next growth hub: With e-commerce sales projected to reach €901 billion by 2028, the EU offers massive potential for sellers seeking new markets.
- Simplified cross-border compliance: OSS and IOSS systems make VAT filing and expansion across 27 EU countries faster and easier than ever.
- Taxually makes it seamless: From one-click VAT registration to automated filing, Taxually helps e-commerce sellers expand into Europe quickly and compliantly.
In short: Europe is a strong next market for e-commerce sellers squeezed by U.S. tariffs. EU e-commerce is projected to grow from €708 billion in 2024 to €901 billion by 2028. Sellers get 450 million digitally savvy consumers, a tariff-free Single Market across 27 countries, and simpler VAT filing through OSS and IOSS.
Update: The 145% rate applied to imports from China. In May 2025, the U.S. cut the reciprocal tariff on Chinese goods from 125% to 10%, effective May 14, 2025.
With U.S. tariffs soaring to over 145%, many e-commerce sellers are seeing their profit margins squeezed tighter than ever. For brands that once thrived in the American market, it might now be time to pivot. But where to next?
The answer is clear — Europe.
From high consumer demand to simplified tax systems and cross-border scalability, Europe offers fertile ground for e-commerce expansion. And with a partner like Taxually, the transition is not just smooth — it’s fast, compliant, and designed for growth.
Why are U.S. tariffs a problem for e-commerce sellers?
U.S. tariffs are a problem because they raise import costs and squeeze sellers’ margins. Selling in the U.S. has become increasingly expensive. Recent tariff hikes have pushed import costs over 145%, eroding margins and introducing more complexity to already strained supply chains.
Many sellers are now asking where they can maintain margins, simplify compliance, and continue scaling.
Why is Europe a good e-commerce opportunity?
Europe is a good e-commerce opportunity because it combines a large, growing online market with easier cross-border selling. While the U.S. tightens, Europe is heating up — both in terms of market opportunity and ease of doing business. Here's what makes the EU such an attractive next move:
How fast is the European e-commerce market growing?
Europe's e-commerce sector is projected to grow from €708 billion in 2024 to €901 billion by 2028, with an average annual growth rate of 9.3%. That’s not just healthy growth — it’s explosive.
450 million digitally savvy consumers
Some 77% of internet users in the EU shop online. In Western Europe, that number jumps to 83%. From Germany and France to Spain and Portugal, the appetite for e-commerce is massive — and still growing.
A unified, tariff-free market
The EU Single Market lets goods and services move freely between 27 countries. This reduces friction, eliminates customs delays, and allows you to scale across borders with ease.
How does the EU simplify VAT compliance?
The EU simplifies VAT compliance through two one-stop systems. The OSS (One Stop Shop) and IOSS (Import One Stop Shop) systems allow you to:
- File a single VAT return for all B2C EU sales
- Eliminate customs delays on imports under €150
- Reduce paperwork and administration
These systems are game-changers, especially when paired with Taxually’s automation tools.
What changes for parcels under €150 from July 2026?
From 1 July 2026, the EU charges a flat €3 customs duty on items in small parcels worth under €150 sent directly to EU consumers. This replaces the old duty relief for these parcels, as confirmed by the Council of the EU.
The duty applies to each category of item in the parcel, based on its tariff sub-heading. For example, a parcel with one silk blouse and two wool blouses holds two categories, so €6 is due.
The flat duty is an interim measure from 1 July 2026 to 1 July 2028, and it may be extended. It will be replaced by normal customs tariffs once the EU customs data hub is running, currently expected in 2028.
VAT is separate from customs duty. The IOSS still covers VAT on consignments up to €150, but goods subject to excise duties cannot use it.
Access to powerful marketplaces
From Amazon’s Pan-EU program to regional giants like Allegro and Bol.com, the infrastructure is already in place to sell across Europe without starting from scratch. These platforms offer localized marketing, multilingual support, and integrated logistics.
High standards = consumer trust
Europe's rigorous consumer protections and data privacy laws (like GDPR) may seem strict, but they’re actually a competitive advantage. Meeting EU standards signals to shoppers that your brand is trustworthy and professional.
Diversification & risk mitigation
Expanding into the EU doesn’t just open up new revenue streams. It also protects you from market disruptions in your home country. By diversifying your customer base and sales channels, you build a more resilient business.
Why choose Taxually for your EU expansion?
Taxually is your fast track to the European market. We help thousands of sellers and partners scale across Europe quickly and compliantly.
Here’s what you get with Taxually:
- One-click VAT registration across all required EU countries
- Automated OSS/IOSS setup and filing
- Multi-country VAT returns from a single dashboard
- Full compliance for marketplaces like Amazon and Shopify
- Lightning-fast onboarding — go live in days, not weeks
Whether you're a solo seller, a scaling brand, or a service provider helping others expand, Taxually offers a plug-and-play solution for EU success.
Let’s unlock Europe — together
The U.S. market isn’t what it used to be. But Europe? It’s surging ahead. With better margins, simplified compliance, and hundreds of millions of online shoppers, the EU is now one of the smartest and most accessible international markets in the world.
Get tailored advice and a clear plan for entering the EU market — talk to one of our VAT experts today.
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.
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Frequently asked questions
Why should U.S. e-commerce sellers expand to Europe?
With U.S. tariffs rising above 145%, Europe offers a large, tariff-free market of 450+ million online consumers and strong e-commerce growth projected to hit €901 billion by 2028.
Is selling across Europe complicated from a tax perspective?
Not anymore. The EU’s OSS and IOSS systems allow you to handle VAT for all EU countries through a single registration and return—making cross-border compliance far simpler.
How can Taxually help with EU expansion?
Taxually automates VAT registration, OSS/IOSS filing, and multi-country returns, helping e-commerce sellers expand across Europe quickly, compliantly, and with minimal admin.
Do I pay customs duty on parcels under €150 sent to EU consumers?
Yes, since 1 July 2026. The EU charges a flat €3 customs duty on each category of item in parcels worth under €150. This interim measure runs until 1 July 2028 and may be extended.
What is the IOSS limit?
The Import One Stop Shop covers VAT on distance sales of imported goods in consignments worth up to €150. Goods subject to excise duties are excluded.
