Difference between "Allowed Countries" and "European Union Countries"

Question

What is the difference between "Allowed Countries" and "European Union Countries"?

In Magento 2:

Admin -> Stores -> Settings -> Configuration > General -> General

In Magento 1:

Admin -> System -> Configuration -> General -> General

From docs.magento.com official website,this is the explanation:

On the General page, click to expand the Countries Options section. Then, do the following:

a. Set Default Country to the country where your business is located.

b. In the Allow Countries list, select each country from which you accept orders. By default, all countries in the list are selected. To select multiple countries, hold down the Ctrl (PC) or Command (Mac) key.

c. In the Postal Code is Optional list, select each country where you conduct business that does not require a ZIP or postal code to be included as part of the street address.

d. In the European Union Countries list, select each country in the EU where you conduct business. By default, all EU countries are selected.

But I still don't fully understand the purpose of the "European Union Countries" list. The same result can be achieved by using the "Allowed Countries" list?

What is the purpose of the "European Union Countries" list?

EDIT:

In addition there is a field with "Top Destinations", can anyone explain what is that for and how it is used?

References: https://docs.magento.com/m1/ce/user_guide/configuration/countries-options.html

Answer 1

Allowed countries identify each country from which you accept orders.

European Union countries identify the countries that are members of the European Union. Here, you can select each country in the EU where you conduct business. By default, all EU countries are selected.

EU countries have different tax rules for example VAT, Magento support VAT calculation as the built-in feature. So, they have included a separate list of EU countries.

For more details on VAT and EU, you can go through the following links: https://docs.magento.com/m2/2.0/ee/user_guide/tax/eu-place-of-supply.html?Highlight=european%20union https://docs.magento.com/m2/2.0/ee/user_guide/tax/taxes.html?Highlight=european%20union https://docs.magento.com/m2/2.0/ee/user_guide/tax/vat-validation.html?Highlight=european%20union

Countries selected under Top Destinations will appear at the top of any dropdown where the customer might have to select a country. Example: country selection dropdown in the tax and shipping estimate block on cart page, country selection dropdown in the shipping address form on the checkout page.