Distance sales in Germany (§ 3c UStG): what online sellers must report

A distance sale (§ 3c UStG): you sell goods to private customers in another EU country, and you or someone for you transports or ships them there. Up to €10,000 net a year (all other EU countries together) you pay German VAT, above it the destination country's. As a rule, you report it with the OSS return to the BZSt.

Last updated: 29 October 2026

In short

Below: German VAT, if previous and current year stay under it and you are established in one EU country only.
Above: destination country's VAT from the exceeding sale; from 1 January if above it in the previous year.
Reporting: OSS return to the BZSt quarterly, by the end of the next month, or registration in each destination country.

What is a distance sale under § 3c UStG?

The law speaks of an “intra-Community distance sale” (“innergemeinschaftlicher Fernverkauf”). You supply goods that you, or someone on your behalf, transport or ship from one EU country to another. That also applies if you are only indirectly involved in the transport (§ 3c (1) sentence 2 UStG). So you do not have to transport the goods yourself; it is enough that they are shipped for you, for example by a parcel service.

Buyers are mainly private customers. Buyers whose EU acquisitions are not subject to VAT are treated the same (§ 3c (1) sentence 3 UStG; BZSt). If a business with a valid VAT ID number of another EU country buys from you, that is not a distance sale. See the section on intra-Community supply further below.

The place of supply is where the goods are when the transport or shipment ends, that is, your customer’s country (§ 3c (1) sentence 1 UStG). This rule does not apply as long as you stay below the threshold (next section).

Three cases are excluded under § 3c (5) sentence 1 UStG:

new vehicles
goods supplied with assembly or installation
goods to which the margin scheme under § 25a UStG is applied

For goods imported from a country outside the EU, paragraphs 2 and 3 of § 3c UStG apply. That is a topic of its own and not covered here.

What this means for you: Shipping goods to private customers in another EU country, even through a parcel service, makes your sale a distance sale, so check each such order against the threshold.

When does foreign VAT apply? The €10,000 threshold

Whether you pay German or foreign VAT on a distance sale is decided by a threshold (§ 3c (4) sentence 1 UStG):

Who: You are established in one EU country only, for example only in Germany. What counts is your registered office, place of management or a permanent establishment; failing that, your residence or habitual abode.
What counts: all your distance sales to other EU countries together. Telecommunications, broadcasting, television and electronically supplied services to private customers in other EU countries count too. The calculation uses the net amount, that is, without VAT.
How much: at most €10,000 in the previous year and in the current year. What counts is the total for all other EU countries together, not each country separately.

Below the threshold, § 3c (1) UStG does not apply. The general rule then applies: a supply is made where the transport or shipment begins (§ 3 (6) sentence 1 UStG). For shipments from Germany, that is in Germany. You charge German VAT and declare it to the tax office (Finanzamt).

Above the threshold, the place of supply is the place where the goods arrive: the so-called destination principle. The supply is subject to the VAT rate of the destination country.

Waiving the threshold: You can declare to the tax office that you do not want to apply it. The VAT of the destination country then applies even below the threshold. The declaration binds you for at least two calendar years (§ 3c (4) sentences 2 and 3 UStG).

An example: In the current year, up to June you sell goods for €6,500 net to France and for €3,000 net to Austria; in the previous year it was €4,000 together. That makes €9,500: below the threshold, German VAT. In July a sale of €800 net to Italy is added. Now it is €10,300: from this sale on, the VAT of the destination country applies to your distance sales.

Registration timing is covered in how long OSS registration takes.

What this means for you: Add up your net sales to all other EU countries together; once you pass €10,000 the destination country's VAT applies.

How do I report distance sales: OSS return or registration in the destination country?

If you are above the threshold, you owe the VAT of each destination country. There are two ways to do that:

With the OSS: You register once for the One-Stop Shop in the BZStOnline Portal. You then declare all distance sales in one return to the BZSt. Participation applies uniformly to all EU countries (§ 18j (1) UStG); the tax period is the calendar quarter (§ 16 (1d) UStG).
Without the OSS: You register in each destination country, file your returns there and pay there. With the OSS, this obligation falls away (BZSt).

The OSS return must have reached the BZSt by the end of the month after the quarter (30 April, 31 July, 31 October and 31 January). The payment must have been received by the Federal Treasury (Bundeskasse) by then as well. If there were no sales in the quarter, you submit a nil return. All steps from registration to payment are in the article OSS return for online sellers. If you had no sales in a period, see the OSS nil return.

In the advance VAT return, OSS sales appear only as a net amount in box (Kennzahl) 45 – not additionally with German VAT. Sales below the threshold (§ 3c (4) sentence 1 UStG) do not belong in box 45, according to the ELSTER help. You enter them with your sales with German VAT (box 81 for 19%, box 86 for 7%).

What this means for you: Above the threshold you either register once for the OSS and file one return per quarter, or register in each destination country.

Is it a distance sale or an intra-Community supply?

The difference lies with the buyer:

	Distance sale	Intra-Community supply
Buyer	Private customer or equivalent buyer	Business with a valid VAT ID number (USt-IdNr.) of another EU country
VAT	German VAT below the threshold, that of the destination country above it	VAT-exempt in Germany (§ 4 no. 1 letter b, § 6a UStG)
Reporting	Advance return or OSS return	Advance return (box 41) and recapitulative statement (Zusammenfassende Meldung)

One condition of the VAT-exempt intra-Community supply is that the buyer gives you a valid VAT ID number (USt-IdNr.) of another EU country (§ 6a (1) sentence 1 no. 4 UStG). For the invoice, see which VAT rate to show on OSS invoices.

What this means for you: The buyer decides: a private customer makes it a distance sale, a business with a valid EU VAT ID number makes it an intra-Community supply.

Which mistakes come up most often?

Calculating the threshold per country. It applies to all other EU countries together.
Calculating gross instead of net. What counts is the amount without VAT.
Forgetting the services. Telecommunications, broadcasting, television and electronic services to private customers in other EU countries count towards the threshold as well.
Continuing to charge German VAT after exceeding the threshold. From the moment you exceed it, the tax rate of the destination country applies.
Treating buyers with a VAT ID number and private customers alike. The one is a VAT-exempt intra-Community supply, the other a distance sale.
Forgetting the nil return. Even without sales in the quarter, a return is due by the same deadline.
Paying too late. The payment must reach the Federal Treasury (Bundeskasse) by the end of the following month. Put the reference number (Kassenzeichen) and the tax period in the payment reference. A direct debit is not possible.

What this means for you: Count net sales for all EU countries together, include services, and file and pay on time with the correct payment reference.

How VAT GPT helps

VAT GPT does the calculating, in three steps:

Upload: You upload your Amazon or eBay CSV report and your invoices. The AI reads amounts, countries and tax rates.
Check: VAT GPT calculates the OSS return for all EU countries and the advance VAT return. You check and confirm.
Send: With VAT GPT Pro – the OSS return directly to the BZSt, the advance return via ELSTER to the tax office.

You apply for participation in the OSS yourself in the BZStOnline portal.

Everything is in one place:

advance VAT return
annual VAT return
OSS return
EÜR
trade tax return
income tax return

There is Free (basic features, free of charge), Go (30 days free with all Pro features) and Pro. Try for Free Now

Frequently asked questions

What does distance sale mean? You sell goods to private customers in another EU country, and the goods are transported or shipped there by you or on your behalf. The law calls it an “intra-Community distance sale” (§ 3c (1) UStG).

From when do I pay the VAT of the destination country? As soon as your distance sales and the services mentioned to private customers in all other EU countries together exceed €10,000 net in the current year. The same applies if they already did so in the previous year.

Does the threshold apply to each country separately? No. What counts is the total for all other EU countries together, without VAT.

Do I have to take part in the OSS? No. Without the OSS, however, you must register in every EU country to whose private customers you sell above the threshold, and file and pay there.

Does § 3c UStG also apply to deliveries to Switzerland? No. A distance sale under § 3c UStG is a supply to the territory of another EU member state (§ 3c (1) sentence 2 UStG). Other rules apply to deliveries to countries outside the EU, on which this article gives no information.

From when does my OSS registration apply? Generally from the first day of the quarter that follows your application. What applies if you exceed the threshold in the middle of a quarter is in the article OSS return for online sellers.

What is the distance selling threshold? €10,000 net a year for your distance sales and certain digital services to private customers in all other EU countries together. It applies if you are established only in Germany; German VAT stays only while the total was not exceeded in the previous year and is not exceeded in the current year (§ 3c (4) UStG).

What are the place of supply rules for EU distance sales to private customers (B2C)? The place of supply is where the goods are when transport or shipment ends, so your customer's country (§ 3c (1) sentence 1 UStG). If you are established only in Germany and stay below the threshold, the place of supply stays in Germany and German VAT applies, unless you tell the tax office that you waive this; the waiver binds you for at least two calendar years (§ 3c (4) UStG).