GUIDE · UPDATED 1 NOVEMBER 2026

EU VAT on digital products: register, or stop selling there?

Downloads, ebooks, online courses and software sold to consumers count as electronically supplied services in the EU. VAT is charged at the rate of the buyer's country, not yours. That surprises many small sellers, especially outside the EU.

This page is general information, not tax advice. Rules and thresholds change; check your situation with an accountant or the official sources below.

When it applies

Most sellers handle this through the One-Stop Shop (OSS): you register in one EU country and file one return for all EU sales. Sellers outside the EU use the non-Union scheme. Other countries, including the UK, Norway and Australia, have their own rules for foreign sellers of digital products.

Sellers based in the EU: once your cross-border sales to consumers in other EU countries pass €10,000 a year (EU-wide), you charge VAT at each buyer's country rate. Below that, your home country's VAT usually applies.
Sellers outside the EU: there's no threshold. VAT is due from the first sale to an EU consumer.
Business buyers with a valid VAT number are handled differently (reverse charge).

Your options

Register and charge VAT. Register for OSS, turn on VAT for digital goods in Shopify's tax settings, and file the returns. This is the long-term answer if EU buyers matter to you.
Pause sales to some countries. If you're not ready to register, or a country isn't worth the paperwork yet, stop selling digital products there until you are.
Sell only to businesses. Some B2B sellers allow only buyers with a VAT number; that needs a separate check.

Pausing sales with a billing-country rule

To stop selling digital products to a country, block it at checkout. DigiBorder's rule checks the billing country when the buyer pays, including Shop Pay, Apple Pay, Google Pay and PayPal, and applies only to products that don't require shipping. Physical products keep selling.

Tax rules decide where a buyer is from evidence such as the billing address, IP address and bank or card country. DigiBorder uses the billing address; it doesn't check IP or card country. It enforces the policy you choose; it doesn't calculate tax or decide your obligations.

Official sources

European Commission: VAT One Stop Shop (OSS) portal
Your national tax authority's guidance for distance sales and digital services
Shopify Help Center: charging VAT on digital goods