Prepare your company for tax changes in the EU in 2026

In today’s borderless world of online shopping, charging the right taxes at the right time to customers in different countries can be a challenge. In the EU in particular, VAT rates vary by country and product type, and keeping up with the latest figures and regulations is frankly one of the most boring parts of running an e-commerce business.

However, it’s also one of the most important parts of your business and it’s essential to review it at least once a year to make sure your site is not only paying correctly, but also reporting correctly. If you’re selling to EU countries, it’s time to take a look at the upcoming VAT changes for 2026 and head into the new year with the peace of mind that comes from knowing you’re set for a great year of sales.

Please note that our WooCommerce team are not tax experts. Always check with your local tax professional that your business is following the correct procedures and processes for your products, structure and location.

Several European countries are introducing new tax rates in 2026, and most will come into effect on January 1. The increased VAT rates will apply to:

• Lithuania: The rate for basic products and services (formally called the reduced rate) increases from 9% to 12%.
• Netherlands: The accommodation reservation rate increases from 9% to 21%.
• Slovakia: Foods high in sugar and salt will see a 23% increase.

Please note that the planned increase in standard VAT from 8.1% to 8.8% in Switzerland has now been postponed until 2028.

VAT rates for the following categories will be reduced:

• Finland: The rate for basic products and services will be reduced from 14% to 13.5%.
• Germany: The previously temporary rate of 7% on restaurant food and catering services will become permanent.
• Austria: Rates will be reduced to 0% for menstrual and contraceptive products.

Please note that this is an accurate summary at the time of writing, but as always regulations are subject to change. Please check with the European Commission for all tax rates in the countries you sell to.

While it’s always good to keep an eye on current VAT rates and ensure your online sales are fully compliant, you can think a lot less about taxes – and spend more time focusing on the growth areas of your business – if you use an extension to add localized tax rates to your website and keep all tax rates up to date.

Tax extensions usually require a third party service that gives you permanent access to their database of current rates for all areas of the world. If you are selling outside of your home country, tax extension is a must to reduce the likelihood of errors, aid bookkeeping and ease time-consuming accounting tasks.

Four tools for automating localized tax rates

Stripe Tax

Stripe Tax integrates seamlessly if Stripe is your payment gateway, but can also be used with other payment methods on your site. Stripe Tax is a usage-based service, so the pricing is ideal for small and medium-sized businesses.

Avalara Avatax

Avalara provides a very flexible service to handle all types of complex tax scenarios. The extension is also fully integrated with WooCommerce Subscriptions, WooCommerce Customer/Order CSV Export and Local Pickup Plus. Data can be exported in standard Peppol Network format for government submissions.

Notebook

Particularly useful for EU stores, Quaderno’s automated tax service provides up-to-date rates on your WooCommerce site, plus digital invoicing and reporting as required by law.

WooCommerce tax

Our free tax plugin can be used to automate tax rates for small EU e-commerce businesses with very simple tax needs. If your annual sales are below the OSS reporting level and you sell physical goods directly to consumers, then WooCommerce Tax is a great option for your business. If you have a small volume of B2B sales in addition to B2C, you can add the EU VAT Number extension to help you manage simple VAT-based exemptions.

If you don’t have a tax service on your site and sell internationally, you’ll need to set and maintain your tax rates manually using WooCommerce’s basic tax tables. The required tables can be found below WooCommerce > Settings > Tax in the main menu.

Depending on the products you sell, you may need to update several tables for each country with rate changes. Most products will require standard rates to be used, but food, books and other essential items usually have a separate reduced rate. In addition, digital products have their own separate EU taxation rules.

If you need to brush up on the basics, here are some resources to get you started:

If the new rates for 2026 require some products on your site to move to a new tax bracket, you may need to update a large number of products in bulk. If you have a small number of products, you can bulk edit your product list, but if you have a large number of products, consider using an extension to help you make this change quickly and painlessly.

Handy bulk editors for WooCommerce products include:

You may also consider exporting the product list, editing the tax class information using the table, and re-importing the products; this works especially well if you already have an advanced import and export extension on your site, such as Import Export Suite for WooCommerce or Product CSV Import Suite.

Like many other countries in Europe and Latin America, government-led digital invoice tracking is coming to Spain. If you are a business or professional based in Spain or a non-resident entity with a permanent establishment in Spain and your business issues digital invoices, you will need to support VERI*FACTU invoice tracking standards by 2027. This means:

• Corporate taxpayers are required to comply by January 1, 2027;
• SMEs must comply by 1 July 2027;
• Established large taxpayers who already use SII (“Instant Information Delivery”) to submit invoices immediately do not need to change their reporting.

If VERI*FACTU applies to you, you will need to ensure that all digital invoices include a QR code of the minimum required size that can be scanned to provide additional information by the end of the year. This additional metadata should include the issuer’s TIN, serial number, date, total amount, and contact URL for verification. The invoice should also state that it is VERI*FACTU compliant.

In addition, you will need:

• Guarantee that billing records cannot be changed without leaving a trace to ensure the integrity of billing records.
• Use hash chaining to link each record to the next to ensure that the sequence of records is maintained.
• Keep an event log recording system events to track any possible data loss.
• Ensure accessibility, legibility and retention of all records for at least four years.

You must be able to export or provide the tax authority (AEAT) with invoicing records in electronic form upon request; or you can set up an automated secure transfer of billing records using the VERI*FACTU system to ensure full AEAT availability at all times.

Pro tip: Ease the transition to required VERI*FACTU reporting with these handy extensions:

Read more about VERI*FACT requirements here.

If the EU inbound tax changes in 2026 have created a unique and complex tax situation for your business, we are happy to help. While we are not tax experts, we are experts in all things WooCommerce and can guide you to the right set of technical solutions to choose the right taxes for your products and your customer profile.

Please contact our support team with details of your own scenario and we will advise you on the next steps.