Why Special VAT Territories Matter
The European Union’s complex history and geography have created an equally complex VAT landscape. VAT rules do not apply uniformly across all territories, and misjudging the status of a region like Monaco or Gibraltar can lead to significant compliance errors.
Even e-commerce giants often misapply these rules. For example, Brexit has introduced unique alignment for Northern Ireland, which remains fiscally linked to certain EU regulations. Merchants shouldn’t be expected to master these nuances—that’s where automated solutions like EAS come in.
Breaking Down the EU’s Fiscal Map
To simplify global sales, here is how the main categories of European territories are structured:
1. EU Countries
- 27 member states of the European Union.
- Includes Northern Ireland for certain fiscal purposes.
- Handled via IOSS for orders under €150.
2. Non-EU Countries
- Switzerland, Norway, UK, Iceland, etc.
- EU VAT laws do not apply.
- Sales should be handled as DDU or DDP via local tax rules.
Associated & Special Status Territories
Some territories linked to EU states have unique VAT profiles:
- Monaco: Treated as part of France for fiscal purposes (often mislabeled by platforms).
- San Marino: In EU customs territory, but EU VAT rules do not apply.
- UK Sovereign Base Areas: Follow Cyprus VAT rules, including IOSS eligibility.
- Azores & Madeira: Portugal applies special reduced VAT rates here.
EU Territories Outside the VAT Area
EU VAT rules do not apply in these specific zones. Merchants must treat these as non-EU imports:
- Spain: Canary Islands, Ceuta, Melilla.
- Finland: Åland Islands.
- France: Guadeloupe, Martinique, Réunion, Mayotte, French Guiana.
- Germany: Heligoland, Büsingen.
- Italy: Livigno, Campione d’Italia.
Northern Ireland: A Special Case
Under the Windsor Framework, Northern Ireland maintains a unique status:
- Outside UK/EU to NI: B2C deliveries under £135 follow IOSS rules.
- EU to NI / NI to EU: Standard Union OSS rules apply.
EAS plugins feature dedicated settings to handle Northern Ireland’s status automatically.
How Platforms Handle Territories
Most e-commerce platforms struggle with these nuances. Shopify, for instance, frequently mislabels territories like the Canary Islands as part of mainland Spain. WooCommerce is more flexible but still requires manual configuration.
EAS corrects these gaps by:
- Setting Monaco to French VAT rates automatically.
- Collecting correct VAT for Ceuta, Melilla, and the Azores.
- Excluding non-VAT area sales from your fiscal reporting to prevent double taxation.
Why You Don’t Need to Worry
With EAS, you can sell confidently to every corner of Europe without mastering VAT law. We ensure that VAT is applied correctly, special rates are used where required, and non-VAT area sales are excluded from your reports automatically.
Contact EAS today to see how simple EU VAT compliance can be.
