When you sell digital products to consumers across the European Union, VAT is decided by where your customer lives. Up to a combined annual turnover of EUR 10,000 you charge Slovak VAT, and once you pass that threshold the tax belongs to the buyer’s country — most conveniently reported and paid through the One Stop Shop (OSS) scheme.
E-books, online courses, downloadable software, membership access or design templates are what VAT rules call electronically supplied services. They are delivered over the internet, with minimal human involvement, and the customer can consume them anywhere. It is exactly this cross-border nature that catches many entrepreneurs off guard after their first sale abroad. The rules are harmonised across the Union, so the differences lie mainly in each country’s rates and in whether you sell to a consumer or to another business.
What counts as a digital product for VAT?
An electronically supplied service is a transaction delivered over the internet, largely automated and impossible without information technology. It covers e-books and audiobooks, pre-recorded online courses, software and its updates, mobile apps, web hosting, database access, media streaming, and the sale of templates and graphics.
It is important to distinguish these from services where a person actually works. If a lecturer runs a live online consultation scheduled for a specific time, it is not an electronically supplied service in the strict sense, because the value comes from human work rather than technology. This distinction changes the place-of-supply rules, so assess each product type separately.
Where does VAT arise on sales to consumers (B2C)?
When you sell a digital product to a private individual, the place of supply is the country where the customer resides or usually stays. This means the tax in principle belongs to the consumer’s state and should be charged at its rate. That is precisely why you need to know where your customer is from.
You cannot simply guess the customer’s location. The rules require two non-contradicting pieces of evidence — for example a billing address and the country of the payment card, or an IP address and a phone dialling code. Keep these records, because during an audit they prove why you applied a particular rate. For more on how we help, see our overview of Slovak tax advisory for companies.
How does the EUR 10,000 threshold work?
Small sellers are protected by a shared relief. As long as the total of your cross-border sales to final consumers in all other EU countries does not exceed EUR 10,000 per calendar year, you may apply Slovak VAT to those sales and need not deal with foreign rates. The threshold is cumulative for the entire Union; it is not counted separately for each state.
The limit adds up not only digital services but also distance sales of goods into the EU. Example: if you sell e-books to Austria for EUR 6,000 and T-shirts to Poland for EUR 5,000, together you reach EUR 11,000 and the threshold is crossed, even though you hit EUR 10,000 in neither country alone. From then on you charge the customer’s country rate.
What is the OSS scheme and how do you pay tax through it?
The One Stop Shop lets you pay VAT on sales to all EU countries from a single place. Instead of registering in every state where you have customers, you enrol once in OSS in Slovakia, file a single return each quarter, and settle the tax with one payment that the authority forwards to the relevant states. Keeping these records in order is part of sound professional accounting.
In OSS you charge each customer the rate of their country — a German buyer gets German VAT, a French buyer French VAT. The alternative is registering in every target country, which is far more demanding, so most small and mid-sized sellers choose OSS.
What VAT rate applies to an e-book and to other digital products?
In Slovakia, printed and electronic books and audiobooks have carried a reduced rate of 5 % since 1 January 2025. Other digital products, such as software, online courses or apps, are subject to the standard rate of 23 %. When selling with Slovak tax you use these rates.
Once past the threshold you follow the buyer’s country rate, and it can differ substantially. Books are a good example: while a Slovak e-book is taxed at 5 %, a Czech customer has a zero rate on electronic books, as the Czech Republic placed books including e-books in the 0 % rate in 2024. Under OSS never assume a foreign rate equals the Slovak one — always check the destination country.
What about sales to businesses (B2B)?
If you sell a digital product to another business holding a valid VAT number in another EU country, the reverse charge applies. The place of supply is the customer’s seat, you invoice without tax, and the customer accounts for the VAT at home. On the invoice you add a reverse-charge note and both parties’ VAT numbers.
Always verify the foreign VAT number in the VIES system, otherwise you risk the transaction being rejected and the tax falling back on you. The difference between selling to a business and to a consumer is therefore crucial already when setting up your e-shop.
What mistakes do sellers of digital products make most often?
Most problems arise from overlooking details that seem negligible at small amounts but grow into penalties during an audit. Before you launch sales abroad, go through this checklist.
- They keep no two pieces of evidence of the customer’s country, so they cannot defend the rate used.
- They overlook the EUR 10,000 threshold by not adding sales of goods into it.
- They apply the Slovak rate even after crossing the threshold.
- In B2B they do not verify the buyer’s VAT number in VIES.
- They register for OSS late and pay tax with interest for the earlier period.
Are you selling e-books, courses or software abroad and unsure when to switch to OSS and which rate to use? We are glad to set up your invoicing and records so that VAT is correct in every country.
FAQ
Do I have to register for OSS from my very first EU sale?
No. As long as your cross-border sales to consumers stay under EUR 10,000 per year, you may apply Slovak VAT and need not use OSS. You can also join the scheme voluntarily earlier if it suits you administratively. Once you pass the threshold, however, registration is mandatory and you charge the rates of your customers’ countries.
Which rate do I use when selling an e-book to a Czech buyer past the threshold?
You use the Czech rate, which for books including electronic ones is zero. So you add no tax for the customer, but you still report the sale through OSS. It is a good example of why you should never rely on the Slovak 5 % rate when selling to another country and always check local rules.
Does the EUR 10,000 threshold apply even if I only sell services, not goods?
Yes, it applies to digital services as well. The key point is that it is one shared limit for all cross-border sales to EU consumers — digital services and distance sales of goods are added together. If you sell only services, you count their total across all Union countries toward the limit.