VATAi x fulfilmentcrowd: Simplifying compliance and logistics for global sellers

fulfilmentcrowd has collaborated with VATAi, a leading SaaS-based provider of tax compliance solutions tailored specifically for global e-commerce sellers, to share insights into how compliance and fulfilment strategies must align to unlock international growth.   

VATAi offer a comprehensive suite of services including VAT registration and filing, Extended Producer Responsibility (EPR), responsible person, trademark services, and company registration - across more than 220 countries.

We’re now incorporating insights and practical expertise drawn from VATAi’s compliance technology and global reach, designed to deliver value to both of our audiences. In doing so, we’re forging a purposeful alignment that enhances understanding and support around cross-border VAT and regulatory challenges.

What triggers VAT obligations? 

When scaling into Europe, one of the most strategic choices you’ll make is how and where to fulfil customer orders. Many brands begin by shipping internationally from a single country, but as sales grow, this approach quickly runs into challenges: long delivery times, high shipping fees, and complex return processes.

Local fulfilment solves this by placing inventory closer to your customers, through a 3PL partner or programs like Amazon Pan-EU.

However, these operational benefits come with compliance implications. The moment you move stock into an EU country, you also create a local VAT registration obligation in that market. This means:

• Applying for a VAT number in each country where goods are stored.
• Filing VAT returns in those countries, even if sales are made elsewhere.
• Managing multiple tax portals and reporting deadlines, which can quickly become complex.

This is why logistics and VAT compliance must be planned together. Local fulfilment can accelerate your growth, but only if the compliance side is handled in parallel. The smartest approach is to treat fulfilment and VAT as two halves of the same strategy: the first drives customer growth, the second keeps that growth sustainable.

Understanding VAT for cross-border eCommerce sales  

Expanding into Europe opens exciting opportunities for online sellers, but can bring complexities in navigating VAT compliance. VAT, or Value-Added Tax, is applied at each stage of the supply chain, and is therefore essential for eCommerce companies to understand. Businesses collect VAT from customers, offset it with VAT paid on purchases, and remit the difference to the tax authorities.

When do online sellers need an EU VAT number?

VAT isn’t just another tax form to complete, it directly influences where you store inventory, how quickly you can deliver, and the overall experience your customers have with your brand.

You may need a VAT number if you store inventory in Europe, exceed a country’s distance selling threshold, or import goods into the EU. Storing goods in warehouses, shipping products across borders, and importing all trigger VAT responsibilities.

• Storing inventory in Europe

Even when using fulfillment services or Amazon FBA, storing goods in an EU warehouse may create a VAT registration obligation in that country. It’s a good idea to check with a compliance provider to confirm your compliance requirements before expanding. 

• Distance selling thresholds

If you ship goods from one EU country to another and your sales exceed the distance selling threshold, you must register for VAT in the destination country.

• Importing goods

When importing goods into the EU, a VAT number is required for customs clearance and correct VAT payment.

Simplifying VAT with OSS and IOSS

The EU has introduced the One-Stop Shop (OSS) to simplify VAT for sellers. Registered businesses can submit a single quarterly VAT return and payment for all cross-border B2C sales within the EU.

For imports under €150, the Import One-Stop Shop (IOSS) allows VAT to be collected at the point of sale and remitted in a single return, helping you to avoid customs complications.

Charging and filing VAT

VAT rates differ across countries, with France at 20%, Ireland at 23%, and Hungary at 27%. Reduced rates apply to essentials like food, books, and medicines.

• Filing VAT returns

With OSS or IOSS, businesses can simplify VAT reporting by submitting a single quarterly return for all applicable EU sales. Without these schemes, VAT must be filed separately in each country where sales occur. 

While the filing cycle is typically quarterly for most businesses, it can vary from monthly to annually depending on a company’s total annual sales.

• Tracking VAT payments

In the EU, each country operates its own tax portal, which can make managing VAT across multiple markets complex and time-consuming. By working with a third-party provider like VATAi, you can consolidate your tracking under one system instead of juggling separate portals. This streamlines reconciliation, improves efficiency, and helps ensure your VAT returns are never missed.

Why Europe? Germany is Europe’s biggest market

Germany is the largest eCommerce market in Europe, worth over €100 billion annually. With more than 80 million consumers and one of the highest online shopping rates in the EU, it offers global sellers both scale and strong buying power.

For many sellers, Germany isn’t just a starting point in Europe—it’s the foundation for long-term EU growth.

Key VAT policy changes in Germany for eCommerce sellers

Germany has introduced several significant VAT policy changes in 2025 that directly impact eCommerce businesses. Understanding these changes and taking proactive steps can help ensure compliance and streamline operations.

1. Mandatory e-invoicing for B2B transactions

Starting 1 January 2025, all businesses in Germany must be capable of receiving structured, machine-readable electronic invoices (e-invoices) for domestic B2B transactions. While issuing e-invoices remains optional until 2027, receiving them is mandatory. This move aligns with the EU's broader efforts to modernize VAT compliance and reduce the VAT gap.

Action step: Ensure your invoicing systems are compatible with the structured e-invoicing format to comply with the new requirements.

2. Postponed VAT accounting for imports

Germany is set to introduce postponed VAT accounting for imports in 2025. This change allows businesses to account for import VAT on their VAT returns rather than paying it upfront at customs, improving cash flow and simplifying VAT compliance.

Action step: Review your import processes and VAT accounting procedures to take advantage of the postponed VAT accounting system once implemented.

Expand into Europe with confidence: Where VAT compliance meets logistics

Breaking into European markets takes more than ambition, it demands smart VAT planning and logistics that work hand in hand. By aligning compliance with fulfillment from the very start, you remove barriers, accelerate delivery times, and create a good eCommerce experience for your customers.

International growth shouldn’t be stalled by complex regulations. VAT doesn’t have to be the roadblock; with the right fulfillment partner and specialist guidance, it becomes a manageable, scalable part of your expansion strategy.

For brands preparing their next move, bringing VAT compliance and logistics together is key. Done well, it’s the difference between firefighting problems and focusing on what really matters: driving sales, delighting customers, and building a global presence with confidence.

Cross-border selling: VAT FAQs for online sellers

1. When do I need to register for VAT in multiple EU countries?

• If you store goods locally (e.g. Amazon FBA, Pan-EU).

• If your EU-wide B2C sales exceed €10,000 and you don’t use OSS.

• If you don’t use OSS for cross-border B2C sales.

OSS lets you file one return for all EU B2C sales, but local registration is still required where goods are stored.

2. How do I calculate VAT rates?

Charge VAT based on the customer’s country and product type. Rates vary by country – check the EU database.

3. Can I reclaim VAT on expenses?

Yes, if VAT-registered locally. Otherwise, reclaim via the EU VAT Refund Scheme (or 13th Directive for non-EU sellers). Rules vary by country.

4. What about digital products/services?

VAT is due where the customer is located. Use OSS (Union/Non-Union) to report all EU digital sales under one registration.

5. Are there penalties for late or incorrect filings?

Yes, fines and interest apply across the EU.

6. How does Brexit affect UK sellers?

UK sellers are treated as non-EU. Import VAT applies, and local VAT numbers are needed where goods are stored. OSS is available if already registered in an EU country.

7. Do I need separate VAT numbers for different warehouses?

Yes, storing goods in an EU country triggers a local VAT registration requirement.

8. How do marketplaces handle VAT?

Marketplaces (Amazon, eBay, etc.) often collect VAT for B2C imports ≤ €150 and EU warehouse sales. But sellers still need local VAT numbers if storing goods.

9. What is the EU distance selling threshold?

• Below €10,000/year: EU sellers may charge home-country VAT (if storing in one country).

• Above €10,000/year: charge destination VAT, usually via OSS.

10. How does it change in B2B vs B2C sales?

• B2C: Always charge VAT based on the customer's country.

• B2B: No VAT if the buyer has a valid VAT number (reverse charge applies). Otherwise, treat it as B2C.