1. Overview and Scope

EU legislation imposes layered obligations on e-commerce businesses regarding how prices — including VAT and other charges — must be displayed to consumers. These obligations derive from multiple directives that interact with each other and with national implementing legislation in each Member State.

This document covers three core situations:

• Intra-EU cross-border sales (goods sold from one EU Member State to a consumer in another)
• Extra-EU imports below €150 (goods imported from third countries using the Import One-Stop Shop / IOSS regime)
• Extra-EU imports above €150 (goods subject to full customs procedures, including both customs duties and import VAT)

2. Price Indication Directive (Directive 98/6/EC)

2.1 Purpose and Scope

Directive 98/6/EC of the European Parliament and of the Council of 16 February 1998 on consumer protection in the indication of the prices of products offered to consumers (the "Price Indication Directive" or "PID") establishes the fundamental rule that all prices shown to consumers must be VAT-inclusive.

The directive was substantially amended in May 2022 by the Omnibus Directive (EU) 2019/2161, which introduced stricter rules on price reduction announcements and increased penalty caps.

2.2 Key Obligation: VAT-Inclusive Selling Price

Article 3(1) of the PID requires:

The selling price and the unit price shall be indicated for all products referred to in Article 1 which are offered by traders to consumers. The indication of the unit price shall not be compulsory where such indication would not be useful due to the nature of the product, or where such indication would create confusion.

Article 2(a) defines the "selling price" as:

The final price for a unit of the product, or a given quantity of the product, including VAT and all other taxes.

2.3 Cross-Border Nuance

In a cross-border context, the applicable VAT rate is that of the consumer's destination country (destination principle). This creates a practical challenge: a merchant cannot display a fully accurate VAT-inclusive price before the customer's country is known.

In practice, the following approaches are commonly adopted and are broadly accepted by enforcement authorities:

• Show the product price ex-VAT on product pages with a clear, prominently displayed note such as "Price shown excludes VAT; VAT will be calculated at checkout based on your delivery country."
• Display an estimated price inclusive of a default VAT rate (e.g., the merchant's home country rate) with a note that the final price may differ.
• Show prices as VAT-inclusive from the moment the customer's country is identified (e.g., via geolocation or upon account login).

2.4 Penalties

Following the 2022 Omnibus amendments, Member States are required to impose penalties that are:

• Effective, proportionate and dissuasive
• Up to 4% of the trader's annual turnover in the Member State(s) concerned
• Up to €2,000,000 where turnover information is not available

3. Consumer Rights Directive (Directive 2011/83/EU)

3.1 Purpose and Pre-Contractual Information Requirements

Directive 2011/83/EU on consumer rights (the "Consumer Rights Directive" or "CRD") governs the information that traders must provide to consumers before a contract is concluded. For e-commerce (distance contracts), Article 6 sets out an extensive list of mandatory pre-contractual disclosures.

3.2 Article 6(1)(e) — Total Price Disclosure

Article 6(1)(e) is the key provision on pricing. It requires traders to disclose, before the order is placed:

The total price of the goods or services inclusive of taxes, or where the nature of the goods or services is such that the price cannot reasonably be calculated in advance, the manner in which the price is to be calculated, as well as, where applicable, all additional freight, delivery or postal charges and any other costs or, where those charges cannot reasonably be calculated in advance, the fact that such additional charges may be payable.

This provision is highly significant for cross-border e-commerce because it explicitly acknowledges that some charges cannot be calculated in advance — and in those cases, the obligation shifts from showing the exact amount to clearly warning the consumer that additional charges may be payable.

3.3 Article 6(6) — Consequence of Non-Disclosure

Article 6(6) creates a direct legal consequence for failure to comply:

If the trader has not complied with the information requirements on additional charges or other costs [under Article 6(1)(e)], the consumer shall not bear those charges or costs.

3.4 Application to Charges That Cannot Be Pre-Calculated

Customs duties are the clearest example of a charge that often "cannot reasonably be calculated in advance" for a cross-border e-commerce transaction, because the precise duty rate depends on:

• The HS (Harmonised System) tariff code of the specific product
• The country of origin of the goods (affecting applicable trade agreements and tariff rates)
• The destination country's applicable rate for that product category
• Any anti-dumping or safeguard duties that may apply

In such cases, Article 6(1)(e) does not require the merchant to calculate the exact duty — it requires the merchant to clearly disclose that customs duties may be payable. Silence is not permitted.

4. VAT Regimes: OSS and IOSS

4.1 One-Stop Shop (OSS) — Intra-EU Cross-Border Sales

The One-Stop Shop (OSS) regime, introduced as part of the EU VAT e-commerce package effective 1 July 2021, allows merchants registered in one Member State to declare and remit VAT on B2C sales to consumers across all EU Member States through a single registration.

Under OSS:

• The applicable VAT rate is that of the consumer's Member State (destination principle)
• No customs duties apply — these are intra-EU transactions
• The seller collects VAT from the consumer at the point of sale
• The price displayed at checkout must reflect the correct destination-country VAT rate

For price display purposes, this means the VAT-inclusive price shown at checkout (once the customer's country is known) must reflect that country's applicable VAT rate — not the seller's home country rate.

4.2 Import One-Stop Shop (IOSS) — Imports Below €150

The Import One-Stop Shop (IOSS) applies to goods imported from outside the EU with an intrinsic value not exceeding €150. Under IOSS:

• Import VAT is collected by the seller at the point of sale (checkout)
• The rate applied is that of the consumer's destination country
• Goods are released at the border without import VAT being collected again
• Customs duties currently do not apply below the €150 threshold (until 1 July 2026)

For merchants using IOSS, the price shown at checkout must include the destination-country VAT. This is arguably easier to comply with than OSS because the VAT amount is added at checkout — but the Price Indication Directive still requires adequate notice prior to checkout that VAT will be applied.

4.3 The New €3 Customs Duty from 1 July 2026

Key details of the new regime:

• The €3 duty is charged per item by tariff classification, not per parcel or shipment
• It applies where the non-EU seller is registered under IOSS for VAT purposes
• A Union-wide customs handling fee is expected to follow in November 2026
• Several Member States (Belgium, France, Italy, Netherlands, Romania) are also considering national customs handling fees from January 2026

For price display purposes, from 1 July 2026 IOSS-registered merchants selling goods below €150 will need to either:

• Build the €3 duty into the displayed price (DDP approach), or
• Clearly disclose at checkout that a €3 customs duty will be added per item

5. Extra-EU Imports Above €150: Full Customs Procedures

5.1 Applicable Charges

For goods imported from outside the EU with a value above €150, the full customs regime applies. This means:

• Import VAT: charged at the destination country's applicable rate on the customs value of the goods (which includes the cost of the goods plus shipping and insurance — CIF value)
• Customs duties: charged at the rate applicable to the product's HS code under the EU Common Customs Tariff (CCT), potentially modified by trade agreements
• Anti-dumping duties: may apply to goods from specific countries in certain product categories
• Customs handling fees: charged by carriers or customs agents for processing declarations

These charges are typically not calculable with precision at the product page stage, but their existence is entirely foreseeable and must therefore be disclosed.

5.2 DDP vs. DAP — The Merchant's Choice

Merchants have a fundamental commercial choice about how to handle import charges, typically expressed through Incoterms:

6. Legal Reference Summary

The following table lists the primary legislation and guidance documents referenced in this document.

7. Practical Compliance Checklist

The following checklist summarises the minimum compliance requirements for each cross-border scenario.

7.1 Intra-EU Sales (OSS)

• Product pages: show VAT-inclusive price, or show price with clear disclosure that VAT will be calculated based on delivery country
• Checkout: display the correct VAT rate for the customer's destination country before order confirmation
• Price reduction offers: apply the 30-day prior-price rule (lowest price in preceding 30 days must be used as the reference price)
• Invoice: show VAT amount and applicable rate separately

7.2 Extra-EU Imports Below €150 (IOSS)

• Product pages: show price with disclosure that import VAT will be applied at checkout
• Checkout: show destination-country import VAT amount before order confirmation
• From 1 July 2026: disclose the additional €3 customs duty per item; either include in checkout total or display as a separate itemised charge
• Confirm IOSS registration number is valid and current

7.3 Extra-EU Imports Above €150 (Full Customs)

• Product pages: prominently disclose that customs duties and import VAT are applicable and are not included in the displayed price (DAP) OR include all charges in a DDP price
• Checkout: before order confirmation, either show the estimated duty and VAT amounts, or clearly state that customs duties and import VAT will be charged on delivery and provide a link or explanation of how they are calculated
• Failure to disclose: consumer is legally entitled under CRD Article 6(6) to refuse payment of any charge not disclosed before the order was placed
• Consider DDP terms to avoid consumer friction and Article 6(6) risk entirely