You want to sell into Europe through Amazon, and you've hit the question every UK seller hits after Brexit: do you stay light with EFN, or go all in with Pan-EU FBA?
It isn't really a logistics question. It's a VAT question wearing a logistics costume. The fulfilment model you pick decides how many EU countries you have to register for VAT in, whether you can use the One Stop Shop, and how your stock crosses the border.
This guide is for UK-established Amazon sellers (sole traders or limited companies) shipping physical goods from Great Britain into the EU. We'll walk through both models, the exact VAT obligations each one triggers, a worked example, and a clear set of decision steps. Every rule is linked to its gov.uk or official source at the end.
If you'd rather hand the whole thing to a specialist, our Amazon FBA accounting service covers EU VAT registration and filing end to end. But first, let's make the decision properly.
EFN vs Pan-EU: what's the difference after Brexit?
In short: with EFN you hold stock in one EU country and ship across the EU from there, so you need one EU VAT registration. With Pan-EU FBA, Amazon spreads your stock across multiple EU countries, so you need a VAT registration in each country your goods are stored in.
That single difference, where your stock physically sits, is the whole decision. EU VAT follows the goods. The moment you store stock in a country, that country wants you VAT-registered there, regardless of how much you sell.
Both models also share one hard Brexit reality: Amazon will not move your inventory between the UK and the EU for you. Great Britain is now outside the EU customs union and VAT area, so you have to get your own stock across the border and into an EU fulfilment centre yourself. EFN and Pan-EU only ever operate within the EU.
Why does Brexit change the VAT picture at all?
Before 2021, a UK seller could keep all stock in the UK, ship to EU buyers, and only worry about EU VAT once they crossed each country's distance-selling threshold. The EU treated the UK as a member state.
Since 1 January 2021, Great Britain is a "third country". Two things changed for sellers.
First, sending goods from GB to the EU is now an export then an import. Your sale out of GB can be zero-rated for UK VAT if you hold the right evidence of export within the time limits, normally three months from the supply date (VAT Notice 703). On arrival in the EU, import VAT (and potentially duty) becomes due in the destination country.
Second, the EU's e-commerce VAT package, live since 1 July 2021, abolished the old per-country distance-selling thresholds and the small-consignment import VAT relief. Every commercial import now carries VAT, and there are new single-return schemes (OSS and IOSS) to handle it. We'll come back to those.
The upshot: there's no longer a "just ship from the UK and ignore EU VAT until you're big" option. If you store or sell goods in the EU at any scale, EU VAT is in play from the first sale.
What VAT does the EFN model trigger?
European Fulfilment Network means your EU stock lives in one country, and Amazon ships from that single pool to buyers across other EU marketplaces.
Here's what that means for VAT.
One EU VAT registration, in your stock country. Storing goods in, say, Germany makes you liable to register for German VAT, irrespective of turnover. There's no minimum threshold for a business storing stock in a country where it isn't established. That registration is your home base for EU filing.
The EUR 10,000 pan-EU threshold does not save you. The EU's EUR 10,000 distance-selling threshold (below which you can charge home-country VAT on cross-border B2C sales) is only available to businesses established in one EU country and shipping from it. A UK-established seller is not established in the EU, so the threshold does not apply. You account for VAT in the customer's country from the first cross-border sale (European Commission, OSS).
This is where OSS earns its keep. Once you hold an EU VAT registration and ship within the EU, you can register for the Union One Stop Shop in your stock country and report all your cross-border B2C EU sales on one quarterly OSS return, instead of registering in every country you sell to.
So the EFN VAT footprint is typically: one local EU VAT registration plus one Union OSS registration. Tidy, and a big reason EFN is the usual starting point for sellers testing Europe.
The trade-off is fulfilment cost and speed. Shipping every EU order from one country means higher per-unit fees and slower delivery promises than holding local stock, which is exactly the gap Pan-EU is designed to close.
What VAT does Pan-EU FBA trigger?
Pan-EU FBA lets Amazon place your inventory in multiple EU countries (commonly Germany, France, Italy, Spain, Poland, and the Czech Republic), so orders ship from the nearest local stock. Faster delivery, lower fulfilment fees, more Buy Box strength.
The VAT cost is real, though.
A VAT registration in every country your stock is stored. Each country where Amazon holds your inventory requires its own local VAT registration and its own periodic VAT returns, in that country's language and on its deadlines. Enrol in the full programme and that can be six registrations and six sets of returns.
OSS still applies, but only to the cross-border B2C flows. When stock in one Pan-EU country ships to a buyer in another, that's a cross-border B2C sale you can report through OSS. But OSS does not replace the local registrations. Domestic sales within a stock country, and the movements of your own goods between Amazon's warehouses, are reported on the local returns.
Stock transfers between countries are reportable movements. When Amazon shifts your goods from, say, a German to a Polish warehouse, that's a "movement of own goods" and has to be reported in both countries. This is the admin that catches sellers out, and it's automated by Amazon's storage decisions, not yours.
In practice, Pan-EU multiplies your compliance work. That's fine when the volume justifies it, and expensive when it doesn't.
What are OSS and IOSS, and when do they help?
These two schemes are the EU's attempt to stop sellers needing a VAT number in all 27 member states. They solve different problems.
The One Stop Shop (OSS)
OSS lets you report B2C sales to consumers across the EU on a single return filed in one member state, rather than registering for VAT in every country you sell to.
For a UK seller with stock in the EU, the relevant version is the Union scheme. You register for it through your EU stock country, then declare all your cross-border B2C EU sales on one quarterly OSS return, charging each customer their own country's VAT rate (European Commission, OSS). It does not remove the need to be VAT-registered where your stock physically sits.
The Import One Stop Shop (IOSS)
IOSS is for low-value goods imported into the EU directly to consumers, where the consignment is valued at no more than EUR 150. It lets you charge EU VAT at the point of sale and report it on a single monthly return, so the parcel clears customs without the buyer being hit with import VAT on the doorstep (gov.uk, OSS and IOSS guidance).
The catch for UK sellers: a business established outside the EU generally has to appoint an EU-based intermediary to use IOSS. HMRC's own route for UK businesses and intermediaries to register became available from 1 April 2026 (gov.uk, OSS and IOSS guidance).
IOSS mainly matters if you ship low-value goods directly from the UK to EU consumers. If your goods are already inside the EU through FBA, you're in OSS territory, not IOSS. And note Amazon often acts as the "deemed supplier" and collects the VAT itself on certain facilitated sales, which changes who accounts for it.
A practical note on Amazon's role: where a marketplace is treated as the deemed supplier, it collects and remits the VAT on the sale to the consumer. That does not remove your obligation to be registered where your stock is stored, or to report your own goods movements. It changes who hands the output VAT to the tax authority, not whether you need a registration.
Side-by-side: EFN vs Pan-EU VAT obligations
| Factor | EFN | Pan-EU FBA |
|---|---|---|
| Where stock is held | One EU country | Multiple EU countries (up to ~6) |
| Local EU VAT registrations needed | One (the stock country) | One per storage country |
| Can use Union OSS for cross-border B2C? | Yes | Yes (alongside local returns) |
| Reportable "own goods" movements between EU countries | No | Yes, both ends |
| Typical compliance load | Lower | Higher |
| Fulfilment fees and delivery speed | Higher fees, slower | Lower fees, faster |
| Best suited to | Testing the EU, lower volume | Proven, higher EU volume |
UK VAT registration is a separate question driven by your UK turnover. The current UK VAT registration threshold is £90,000 of taxable turnover in any rolling 12-month period for 2025/26 (gov.uk, VAT registration thresholds). EU registrations sit on top of that and follow EU rules, not the UK threshold.
Illustrative example: the same sales, two models
Illustrative example. Priya runs a UK limited company selling homeware on Amazon. She expects EUR 120,000 of EU sales in 2025/26, all B2C, split roughly across Germany, France and Spain. Her UK turnover already exceeds the £90,000 threshold, so she's UK VAT-registered. UK figures use the 2025/26 standard VAT rate of 20% (gov.uk, VAT rates).
Under EFN, she holds all EU stock in Germany.
- She registers for German VAT (required because she stores stock there) and for Union OSS through Germany.
- Her sales to German buyers go on her German VAT return. Her sales to French and Spanish buyers are cross-border B2C, reported on one quarterly OSS return at French and Spanish VAT rates.
- VAT registrations to maintain: one (Germany) plus one OSS registration.
- Her shipment of stock from the UK into Germany is a UK export (zero-rated if she keeps export evidence within three months) and an import into Germany on which German import VAT is due, which she can generally recover through her German registration.
Under Pan-EU, Amazon stores her stock in Germany, France and Spain to speed up delivery.
- She now needs German, French and Spanish VAT registrations, because she stores stock in all three.
- Domestic sales in each country go on that country's local return. Genuine cross-border B2C sales still go through OSS.
- Amazon's transfers of her stock between the three countries are reportable movements of own goods at both ends.
- VAT registrations to maintain: three local registrations plus OSS.
Same EUR 120,000 of sales. EFN means one foreign registration and one OSS return to manage. Pan-EU means three foreign registrations, three sets of local returns, plus OSS and movement reporting. The fulfilment savings can be worth it, but only once volume makes the extra compliance pay for itself.
This is illustrative. Your own split, stock placement and Amazon's deemed-supplier treatment will change the detail.
Decision steps: which model fits you?
Work through these in order.
- How much EU volume do you genuinely expect? Low or unproven volume points to EFN. The fewer foreign VAT registrations you carry, the cheaper and simpler your compliance.
- Is delivery speed costing you sales? If EU customers are bouncing on slow delivery estimates, Pan-EU's local stock can lift conversion enough to justify the extra registrations.
- Can you absorb multi-country filing? Each Pan-EU country is a separate return, deadline and language. Be honest about whether you'll keep up, or whether an accountant will.
- Where will your stock actually sit? Confirm exactly which countries Amazon will store your goods in. Every storage country is a registration. Do not enrol in Pan-EU and discover the registrations afterwards.
- Have you sorted the UK-to-EU border leg? Both models need you to import stock into the EU yourself, with an EU EORI number, an importer of record, and a plan for import VAT recovery.
A common, sensible path: start on EFN with a single EU registration and OSS, prove the demand, then move to Pan-EU once the volume clearly outweighs the added compliance.
One more thing that applies to both: your UK VAT returns must be filed under Making Tax Digital, keeping digital records and submitting through compatible software, which is mandatory for all VAT-registered businesses (gov.uk, Making Tax Digital for VAT). Getting your bookkeeping clean in the UK makes the EU layer far less painful.
If you want this mapped to your actual numbers, our Amazon FBA accountants can model EFN against Pan-EU for your volumes and handle the registrations and returns. Book a free call with a Zmartly accountant and we'll tell you which model is cheaper for you, in writing.
Frequently asked questions
Do I need to register for VAT in every EU country with Pan-EU FBA?
You need to register in every EU country where Amazon stores your stock. Storing goods in a country creates a VAT registration obligation there with no minimum threshold for non-established businesses. With full Pan-EU that can mean six registrations. EFN keeps it to one, because your stock sits in a single country.
Does the EUR 10,000 EU distance-selling threshold help a UK seller?
No. The EUR 10,000 threshold is only available to businesses established in one EU country and shipping from it. A UK-established seller isn't established in the EU, so the threshold doesn't apply and you account for VAT in the customer's country from the first cross-border B2C sale.
Is OSS enough on its own, or do I still need local EU VAT numbers?
OSS reports cross-border B2C sales on one return, but it does not replace the registration you need in the country where your stock is physically stored. Under EFN that's one local registration plus OSS. Under Pan-EU it's a local registration in each storage country plus OSS.
When do IOSS and the EUR 150 limit matter to me?
IOSS applies to low-value goods, consignments of no more than EUR 150, imported directly to EU consumers. It's relevant if you ship low-value parcels straight from the UK to EU buyers. If your goods are already inside the EU through FBA, you're using OSS, not IOSS. UK businesses generally need an EU intermediary for IOSS, and HMRC's UK registration route opened from 1 April 2026.
Can I still move my own stock between the UK and the EU through Amazon?
No. Since Brexit, Amazon does not transfer inventory across the UK-EU border for you. You arrange the export from Great Britain and the import into the EU yourself. Within the EU, Amazon can move your Pan-EU stock between countries, but those movements are reportable for VAT at both ends.
Does the UK £90,000 VAT threshold affect my EU registrations?
No. The £90,000 figure is the UK registration threshold for 2025/26 and only governs whether you register for UK VAT. EU registrations follow EU rules, and storing stock in an EU country triggers a registration there regardless of how much you sell.
