VAT OSS and EU special territories – Canary Islands, Ceuta, Aland and other exceptions
Political affiliation to an EU country does not automatically mean affiliation to the EU VAT territory.
Before choosing an OSS, check the region, postal code, and shipping direction. Selling to Tenerife may have different consequences than selling to Mallorca, even though both addresses are Spanish.
The country code is not sufficient to select the procedure
VAT territory and customs territory are two separate questions
The map helps to see the differences, but the source of truth remains the table based on the official territorial scope of the European Commission.
Standard territory of a Member State, e.g. the Balearic Islands, the Azores and Madeira.
Goods require a distinction between VAT and customs duties, e.g. Canary Islands, Aland Islands and Mount Athos.
This is not an ordinary STO like Ceuta, Melilla, Helgoland or Livigno.
Monaco acts like France for VAT purposes, and Akrotiri and Dhekelia act like Cyprus.
Tenerife, Ceuta and Mallorca are not subject to the same rule
In the shopping cart, the value "Spain" is not sufficient. The region or postal code must lead to the correct tax territory.
Outside the EU VAT, in the customs area
The Canary Islands use IGIC. Goods from the Canary Islands to the continental EU are treated as imports for VAT purposes, so the Union OSS does not function like a regular ESPO.
VAT in SpainOutside EU VAT and outside EU customs
This is a different status than the Canary Islands. Shipments require analysis of import, customs documents, and local IPSI.
Spanish IVA and EU territory
Mallorca, Menorca, and the other Balearic Islands are part of the EU VAT territory. Their island location alone does not create an exception.
Aland, Athos and other regions require separate mapping
A single country code can cover both the regular EU VAT territory and an exempt region. VAT and customs status do not always coincide.
Åland Islands
They are within the EU customs territory but outside the EU VAT territory. The movement of goods is treated as imports or exports for VAT purposes.
Mount Athos
It is covered by EU customs rules but exempt from EU VAT. The other Greek islands are not automatically exempt.
Heligoland, Büsingen and Livigno
These territories are outside EU VAT and customs. Campione d'Italia has a different status: EU customs apply, but EU VAT does not.
Check VAT, customs and possible procedure
Statuses are derived from the official European Commission table. The OSS/IOSS column indicates the direction of further analysis, not the automatic outcome of the transaction.
| Territory | Related country | EU VAT? | EU customs? | Treated as | OSS / IOSS | Council Tax / Note |
|---|---|---|---|---|---|---|
| Canary Islands | Spain | NO | Yes | Outside EU VAT | Union OSS not like WSTO; IOSS possible on import | IGIC |
| Ceuta | Spain | NO | NO | Territory Three | Import analysis; IOSS possible | IPSI |
| Melilla | Spain | NO | NO | Territory Three | Import analysis; IOSS possible | IPSI |
| Åland Islands | Finland | NO | Yes | Outside EU VAT | Not like the usual WSTO | VAT import/export formalities |
| Mount Athos | Greece | NO | Yes | Outside EU VAT | Not like the usual WSTO | Special tax scope |
| Heligoland | Germany | NO | NO | Territory Three | Import analysis | Don't follow the usual DE rule |
| Büsingen | Germany | NO | NO | Territory Three | Import analysis | Don't follow the usual DE rule |
| Livigno | Italy | NO | NO | Territory Three | Import analysis | Outside Italian VAT EU |
| Campione d'Italia | Italy | NO | Yes | Outside EU VAT | Not like the usual WSTO | VAT status different from Livigno |
| French overseas territories | France | NO | No or yes | Depending on the territory | Requires identification of a specific region | Don't use one status for all |
| Monaco | France | Yes | Yes | France | How to properly deal with France | For transactions to and from Monaco |
| Akrotiri and Dhekelia | Cyprus | Yes | Yes | Cyprus | How to do a proper transaction with Cyprus | For transactions to and from databases |
| Northern Ireland | Great Britain | Only goods | Yes | EU for goods traffic | Union OSS may apply to goods | Number XI; do not extend to services |
| Azores and Madeira | Portugal | Yes | Yes | Portugal | Standard OSS Analysis | Regional VAT rates |
| Balearic Islands | Spain | Yes | Yes | Spain | Standard OSS Analysis | Spanish IVA |
The full, official list is published by the European Commission in the summary of the territorial scope of EU VAT and customs duties.
Monaco, Akrotiri and Dhekelia operate in the opposite way to the Canary Islands
Politically they are not a regular part of a Member State, but the regulations assign them for VAT purposes to France and Cyprus respectively.
For VAT and customs purposes treated as France
You analyze the PL→Monaco transaction for VAT purposes in the same way as the actual delivery to France.
VAT in FranceFor VAT and customs purposes treated as Cyprus
The Rules apply to transactions to and from the British Sovereign Base Areas in Cyprus.
Analysis of how to deliver to France
If the STO conditions are met, the Union OSS procedure may be appropriate.
Not like the usual ESPO to Spain
The Canary Islands are outside the EU VAT system. Exports, imports, and any IOSS must be checked.
Spanish IVA and EU VAT
The Balearic Islands remain in the EU VAT and customs territory.
Northern Ireland - EU VAT link for goods only
Number XI identifies activities covered by the Windsor Framework. This rule should not be extended to services or the rest of the UK.
Distance selling to Northern Ireland may be reportable by Union OSS subject to conditions being met.
Services do not benefit from this special link to EU VAT.
Sales to these parts of the country are not ordinary Union OSS sales.
The system should distinguish between GB and XI and the type of transaction.
An island does not automatically mean an exception
The addressing system should know the specific exclusions and not block all islands or territories away from the mainland.
They remain within the EU's VAT and customs territory. Do not apply the Canary Islands rule to them.
Mallorca and the other islands are covered by the Spanish IVA and standard OSS analysis.
They are not exempt from EU VAT simply because they are islands. An exception that deserves attention is Mount Athos.
What to check before calculating VAT and choosing OSS?
The tax rule should use the full location and route of the goods, not just the two-letter country code.
- Country of address
- Administrative region
- Zip code
- Island or territory
- VAT territory
- Customs area
- Place of goods
- Export, import or STO
- Possibility of using IOSS
- Local tax, e.g. IGIC or IPSI
- Number XI for goods
- The right rate
- Customs documents
- Exception to the country code rule
"ES = Spanish VAT 21%." For the Canary Islands, Ceuta, and Melilla, this automatic rule is incorrect. The region and type of territory must change the basket result.
Do you sell to regions with special status?
We can help you separate STOs, exports, and imports, determine the feasibility of using OSS or IOSS, and organize your local VAT registrations. EU VAT rates are a starting point but do not replace checking local taxes, such as IGIC or IPSI.
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VAT OSS
General guide to One Stop Shop, procedures, declarations and payments.
Read the guideDon't let the country code alone select VAT
Combine the country, region, postal code, and location of the item before applying OSS, IOSS, or import rules.
VAT OSS and EU Special Territories - FAQ
No. The Canary Islands are outside the EU VAT territory, although they remain within the EU customs territory. They apply the local IGIC.
No. The Balearic Islands, including Mallorca, are covered by the Spanish IVA and the EU VAT and customs territory.
For VAT purposes, Monaco is treated as French territory in respect of transactions to and from Monaco.
It has a special status for goods and can participate in the Union OSS in this respect. This should not be extended to services.
No. You may need to map your region, postal code, island, and tax territory type.
Not like a regular ESPO to Spain. The Canary Islands are outside the EU VAT system, so exports, imports, and the potential use of IOSS need to be analyzed.
No. Both territories are outside the EU VAT area, but the Canary Islands remain in the EU customs area, while Ceuta and Melilla are outside it.
No. The Azores and Madeira remain in the EU VAT and customs territory as part of Portugal.
