Short answer
When you sell through an online marketplace, VAT collection and record-keeping duties are split between the platform and you. In many EU cases, the marketplace is the deemed supplier for business-to-consumer (B2C) sales, meaning it charges and remits VAT on your behalf. However, you remain responsible for providing accurate information and keeping supporting records to prove VAT was handled correctly. If you sell business-to-business (B2B) or use schemes like OSS or IOSS, the rules differ. This article explains who collects what and which records you need to keep.
Who is responsible for VAT on marketplace sales?
Under EU VAT rules, online marketplaces are treated as the supplier for most B2C supplies of goods when they facilitate the sale and set terms or payment methods. This is called the 'deemed supplier' model. In that role, the platform charges VAT to the buyer, collects it, and remits it to the tax authority. You, the seller, generally do not have to issue VAT invoices or account for output VAT on those sales, but you must provide the platform with correct VAT identification details and ensure your goods are eligible.
For B2B sales, the usual rules apply: you are responsible for VAT unless the customer is liable under a reverse charge. The EU's ViDA package expands deemed supplier rules to short-term accommodation rental and passenger transport by road from July 2028. If you operate in those sectors, your platform may become responsible for VAT even if you are a small business or individual. Until then, confirm who is liable in your specific agreement.
- Check your marketplace agreement to see if the platform acts as the deemed supplier.
- For B2C sales, the platform usually collects and remits VAT.
- For B2B sales, you may need to invoice VAT or apply reverse charge rules.
- Keep records of your sales and product classifications to support the platform's reporting.
When do the new EU digital rules affect your obligations?
The EU has adopted the VAT in the Digital Age (ViDA) package, phased in up to January 2035. From 1 January 2027, minor clarifications affect OSS and IOSS users. From 1 July 2028, platforms in short-term accommodation and passenger transport must comply with new deemed supplier measures, and the Single VAT Registration reforms start. From 1 July 2030, digital reporting requirements will require e-invoicing for cross-border B2B transactions. These changes will impact how you and your platform handle VAT records.
If you sell cross-border within the EU, you likely use the One-Stop-Shop (OSS) scheme to declare VAT on B2C distance sales. Under ViDA, OSS is being improved with new correction mechanisms and a transfer of own goods module. In the UK, Making Tax Digital for Income Tax (MTD) requires sole traders and landlords with income over £50,000 to keep digital records and file quarterly updates from April 2026. While MTD is an income tax measure, it shows a wider trend toward mandatory digital record-keeping. Keep track of these dates because they change what records you must retain and how you report them.
- January 2027: OSS/IOSS clarifications take effect.
- July 2028: Deemed supplier rules apply to short-term accommodation and passenger transport.
- July 2030: Digital reporting for cross-border B2B.
- January 2035: Final phase of ViDA with aligned national systems.
What records must you keep as a seller?
Even if the marketplace collects VAT, you must keep records that show the platform handled the tax correctly. Typically, you need to keep sales reports from the platform, details of goods sold, including descriptions and values, and evidence of the customer's status (B2B or B2C). You should also keep your own VAT registration number and the platform's VAT number, if applicable. The EU requires you to retain records for at least ten years, but national rules may differ.
For cross-border sales, the OSS scheme requires you to keep records of all OSS transactions for ten years. This includes the country of arrival of goods, the VAT rate applied, and the total sales value per country. If you use IOSS for imports, you must keep records of import declarations and evidence that import VAT was paid. Under ViDA, future digital reporting will require e-invoices, so adopt compatible software early.
- Sales reports from the platform showing VAT charged.
- Product descriptions and values for each transaction.
- Customer records indicating B2B or B2C status.
- Evidence of import and export, if applicable.
The One-Stop-Shop (OSS) and Import One-Stop-Shop (IOSS) schemes
The OSS scheme lets you declare and pay VAT for all your EU distance sales in one member state. Since 1 July 2021, these rules apply to internet sales. You must register in one EU country and use that portal to report sales in other member states. The platform may be the deemed supplier for sales it facilitates, but if you sell outside a platform or in situations where the platform does not act as deemed supplier, you are responsible for OSS. Keep records of your OSS returns and the sales data used to complete them.
The IOSS scheme simplifies VAT for imports of consignments of low value (up to €150). Under IOSS, VAT is charged at the point of sale, and the seller or an intermediary collects and remits it to the EU. If you use IOSS, you must keep monthly listings of sales by member state and additional information before import. ViDA will also require IOSS users to provide more data. These schemes reduce paperwork but still require careful record-keeping.
- OSS registration in one EU country covers all EU distance sales.
- IOSS applies to low-value imports and is optional.
- Under IOSS, you must report monthly sales per member state.
- Use the OSS portal to file returns and pay VAT centrally.
Next steps for compliance
Start by reviewing your current sales channels and contracts. Ask each marketplace to confirm whether it acts as the deemed supplier for your goods. If yes, you may not need to register for VAT in the country of consumption for those sales, but you must keep records of the platform's reporting. If you sell directly or through non-deemed platforms, you may need to register and use OSS.
Assess your sales volume and destinations. If you exceed distance selling thresholds, you must register for VAT in those countries or use OSS. For the UK, if you are a sole trader or landlord with income over £50,000, you must sign up for MTD by April 2026 if you have not yet. Begin using digital bookkeeping software that can store records electronically and generate reports. Consult a VAT advisor to verify which rules apply to your specific business model, because VAT is complex and penalties for errors are severe.
- Identify which platforms are deemed suppliers for your sales.
- Decide if you need OSS or IOSS registration.
- Implement digital record-keeping now for future DRR requirements.
- Seek professional advice for cross-border factors.
What to verify
- VAT rules vary by country and are subject to change; always verify with the relevant tax authority.
- Specific thresholds and dates may change; check the latest official guidance.
- The examples use EU and UK rules; other jurisdictions may differ.
Questions and answers
If the marketplace collects VAT, do I still need to register for VAT?
Often no, because the platform is the deemed supplier and is liable for the VAT on its sales. However, you may still need to register for VAT if you sell goods outside the platform or if the platform does not act as the deemed supplier for your transactions. Check your arrangement and local rules. [1]
What records should I keep for OSS sales?
Keep records of each sale, including the member state of destination, the VAT rate applied, the total sales value, and the date of sale. Also keep your OSS returns and any corrections for ten years. [1][3]
When does Making Tax Digital for Income Tax apply to me?
From 6 April 2026, sole traders and landlords in the UK must use MTD if their annual qualifying income from self-employment or property exceeds £50,000. You must keep digital records and file quarterly updates using compatible software. [2]
Sources and verification date
- Official source: taxation-customs.ec.europa.eutaxation-customs.ec.europa.eu · Checked
- Official source: gov.ukgov.uk · Checked
- Official source: taxation-customs.ec.europa.eutaxation-customs.ec.europa.eu · Checked