Two separate transactions
There is a purchase from the supplier and a sale to the customer: each must be classified according to its own place of departure and destination.
VAT numbers · Online sales
E-commerce and the OSS VAT scheme
Selling online in Italy is simple. Selling across Europe changes everything: once you pass an overall threshold, VAT must be paid in the customer's country. The OSS scheme exists precisely so that you do not have to register in every country.
01 · The basic case
Sales to Italian customers
For online sales to private individuals living in Italy, Italian VAT applies at the product's ordinary rates. What is special is the paperwork, not the tax.
- Indirect e-commerce (online sale of physical goods that are shipped) is treated like mail-order selling.
- There is no obligation to issue an invoice, unless the customer asks for one at the time of the sale.
- There is no obligation to record takings with a till receipt, but the sales must be entered in the takings register.
- You need to notify the start of the activity with the correct ATECO code (the Italian classification of business activities) and file the SCIA (certified notice of start of activity) with the municipality.
- Direct e-commerce (digital goods, services provided online) follows different rules, with its own place-of-supply rules.
- Businesses under the regime forfettario (the Italian flat-rate scheme) do not charge VAT, but they remain subject to the rules on intra-EU sales.
The distinction between direct and indirect e-commerce is the first fork in the road: the first concerns intangible goods delivered electronically and is always a supply of services; the second concerns physical goods ordered online and shipped, and is a supply of goods. The VAT rules differ in every respect.
02 · The dividing line
Selling to other European countries
Distance sales to private individuals living in other member states have a single annual threshold, calculated on total sales across the whole EU, not country by country.
| Situation | Where VAT is paid |
|---|---|
| EU sales below the overall threshold | Italian VAT, as for a domestic sale |
| EU sales above the threshold | VAT of the customer's country, at its rate |
| Above the threshold, registered for OSS | A single payment in Italy, which passes it on to the other countries |
| Above the threshold, without OSS | VAT registration in each country of destination |
| Sales to EU VAT-registered businesses | Intra-EU supply, under the VIES rules |
| Sales outside the EU | Export, zero-rated with proof that the goods left the EU |
The threshold is a single total for the whole EU and is added to digital services supplied to private customers in the EU. Anyone selling a little in Germany, a little in France and a little in Spain reaches it sooner than they imagine, and crossing it has immediate effects on the very sale that crosses it.
03 · The one-stop shop
How the OSS VAT scheme works
The One Stop Shop is the scheme that lets you settle the VAT due in other member states with a single registration and a single return filed in Italy.
Registering
You apply online to the Agenzia delle Entrate (the Italian Revenue Agency). It takes effect from the following quarter, except where the first sale crosses the threshold.
Invoicing
You apply the VAT rate of the customer's country. There is no obligation to invoice sales to private customers, but records must be kept.
The return
Quarterly, separate from the ordinary VAT return, with a breakdown by member state and by rate.
Payment
A single payment to the Italian tax authorities, which pass it on to the other countries. It cannot be offset against ordinary VAT credit.
What OSS does NOT cover
The scheme has a precise scope.
- It does not cover sales to VAT-registered businesses: those remain intra-EU supplies
- It does not let you reclaim VAT on purchases made in other countries
- It does not replace the Italian VAT return, which is still due
- It does not cover sales shipped from warehouses located in other countries
04 · If you sell on a platform
Selling through a marketplace
When a sale goes through a platform, in many cases the platform itself becomes liable for the tax. What changes is who pays, not what has to be declared.
- For certain transactions the platform is treated as the deemed supplier and pays the VAT instead of the seller.
- This applies in particular to sales of imported goods below a certain value and to sales by non-EU sellers to private customers in the EU.
- The seller still makes a supply to the platform, which must be documented under the rules.
- The commissions paid to the platform, if it is based abroad, require you to supplement the invoice and pay the VAT under the reverse charge.
- Sales data is reported by the platforms to the tax authorities: transparency is total.
- Platforms that facilitate sales have their own reporting obligations, with data that feeds into the tax databases.
Commissions paid to foreign platforms are the item small sellers forget most often: every month they create an obligation to supplement the invoice and, for businesses under the flat-rate scheme, an actual VAT payment that cannot be reclaimed.
05 · The complex case
Dropshipping
This is the model in which the seller does not hold the goods and the supplier ships directly to the end customer. For tax purposes it is one of the most delicate situations.
Non-EU supplier
The goods enter the EU: this raises questions of importation, customs duty and import VAT, including who the importer is.
EU triangulation
When the three parties are in different countries, the rules on triangular transactions must be applied with care.
The main risk
Treating dropshipping as a simple domestic resale, without considering where the goods are and where they move.
The IOSS scheme
For distance sales of low-value imported goods there is a dedicated one-stop shop, as an alternative to collection at customs.
Documentation
Contracts, transport documents and proof of the goods leaving or entering are the only way to support the treatment applied.
06 · First steps
What you need to start an e-commerce business
The start-up formalities are few, but they must be done in the right order.
- A partita IVA (Italian VAT number) with the e-commerce ATECO code, which is different from the one for trading from fixed premises.
- SCIA filed with the municipality to start the online sales activity.
- Registration with the Registro delle imprese (the Companies Register) and with the traders social security scheme, where due.
- Registration in the VIES (the EU database of VAT numbers for cross-border trade) if you expect intra-EU sales or purchases.
- Assessing the tax regime: the flat-rate scheme can make sense at the start, but you need to check the effect of costs and of VAT on purchases.
- Setting up the accounts and the takings register, with periodic extraction of data from the sales platform.
The time to decide on the regime and on any OSS registration is at the start, not the first time you cross the threshold. Changing the set-up partway through the year means reclassifying the sales already made, which is possible but costly.
Frequently asked
The questions that keep coming up
I sell very little abroad. Do I have to register for OSS?
Not if you stay below the overall annual threshold for distance sales to the whole EU: in that case you apply Italian VAT, as for a domestic sale.
Be careful, though: there is one threshold for all countries, and it is added to digital services supplied to private customers in the EU. You can register for OSS voluntarily even below the threshold, and in some cases it makes sense for ease of management.
I am under the flat-rate scheme. Can I sell online in Europe?
Yes. The regime forfettario does not prevent online sales, including to other member states, but the VAT rules on cross-border transactions still apply.
The critical point is purchases: commissions from foreign platforms and advertising services require you to supplement the invoice and pay VAT that you cannot reclaim. It is a real cost to budget for.
Do I have to issue an invoice for every online sale?
No, for sales to private customers there is no obligation to invoice unless the customer asks at the time of the sale. The sales must, however, be entered in the takings register.
Sales to VAT-registered businesses are a different matter: there an invoice is mandatory and must be sent through the Sistema di Interscambio (the Italian e-invoicing exchange system).
The platform pays the VAT for me. Do I not have to do anything?
It is not that simple. Where the platform is the deemed supplier, it pays the tax on the sale to the end customer, but you still make a supply to the platform, which must be documented and declared.
You also remain responsible for the obligations on the commissions paid to the platform and for the ordinary VAT return.
Let's talk
There is one threshold for the whole EU, not one per country
It is the most common misunderstanding. If you sell even a little in several countries, the totals add up and you reach the threshold sooner than you think.