OSS (One-Stop Shop)

On July 1st, 2021, OSS was implemented as a new electronic system allowing businesses to declare and pay VAT on their cross-border sales of goods and services to customers within the EU by using just one registration number.

Despite the fact that the OSS scheme is designed to simplify VAT compliance for businesses and reduce the administrative burden of managing VAT obligations in multiple EU member states, there is a large number of e-commerce business owners who need help understanding it correctly.

OSS scheme allows EU and non-EU businesses to collect, declare, and pay VAT for their sales using just one number issued in a single country of identification within the EU.

There are two types of the OSS VAT scheme.

Non-Union OSS scheme: this scheme is created exclusively for Non-EU established taxable persons selling B2C supplies of services to customers in the EU (e.g., software company established in the US selling one-time license, or subscription-based (SaaS) access to its software to private individuals in the EU). It’s important to state that there is no threshold when it comes to the registration of the Non-Union OSS scheme.
Non-EU established taxable persons selling B2C supplies of services to customers in the EU must register from the first transaction and start collecting VAT, submitting quarterly OSS returns, and paying VAT. Member States may or may not oblige non-EU suppliers to appoint a tax representative to use the Non-Union scheme (Article 204 of the VAT Directive). Non-Union OSS numbers can be recognized from the format EUxxxyyyyyz.

Union OSS scheme: this scheme is wider than the Non-Union OSS scheme and can be used by:

• Non-EU established taxable persons involved in the B2C Intra-Community distance sales of goods (e.g., in the UK, established Shopify seller using a warehouse in Germany to fulfill goods to B2C customers in other EU Member states, annual EU threshold of 10.000 EUR is not applicable for Non-EU established taxable persons involved in the B2C Intra-Community distance sales of goods)
• EU established taxable persons that are shipping goods only from their country of establishment and have passed the annual EU threshold of 10.000 EUR of B2C Intra-Community distance sales of goods (e.g., in Germany, established Shopify seller using a warehouse in Germany to fulfill goods to B2C customers in other EU Member states, which B2C Intra-Community distance sales of goods in 2022 has been 12.000 EUR without VAT)
• EU-established taxable persons that are shipping goods from the warehouse outside their country of establishment, or more than one EU Member state, and are involved in B2C Intra-Community distance sales of goods (e.g., in Germany, established Shopify seller using a warehouse in Poland to fulfill goods to B2C customers in other EU Member states, in this case, annual EU threshold of 10.000 EUR is not applicable)
• EU established taxable persons selling ALL intra-Community B2C supplies of services to customers in the EU (e.g., software company established in Ireland selling one-time license, or subscription-based (SaaS) access to its software to private individuals in other EU Member states; a ticketing company established in France selling tickets for the events organized in different EU Member states; passenger transportation company established in Italy selling bus tickets to private individuals for transfers within the EU)
• EU and Non-EU established electronic interfaces providing domestic B2C supplies of goods (Article 14a(2)) (e.g., an electronic interface like Amazon or Etsy for the transactions made by the Non-EU established sellers shipping goods within the same EU Member state, or from one EU Member state to another)

As can be seen, EU and non-EU businesses can benefit from the OSS scheme in the following ways:

• Reduced administrative burden: Businesses only need to register for OSS, submit quarterly OSS returns, and pay the VAT in one EU Member State of identification rather than in each Member State where they make sales.
• Simplified compliance: The OSS rules are harmonized across the EU, which makes it easier for businesses to understand and comply with their VAT obligations.
• Reduced risk of penalties: Businesses that are registered for the OSS are less likely to be penalized for non-compliance with VAT rules.

Choosing eVAT’s Premium Service Provider network as your OSS compliance partner, you get:

• Registration: eVAT’s Premium Service Provider handle the entire process, leaving you free to focus on what you do best – growing your e-commerce business.
• Submission: eVAT’s Premium Service Providers are committed to ensuring the timely submission of your OSS returns without fail.
• Confidence in accuracy: Your peace of mind is our concern, and we take every measure to ensure error-free OSS submissions, thereby minimizing the potential for audits and associated penalties.

To explore the subject independently, visit eVAT’s blog post “Basics of OSS.”

Choose to partner with eVAT's network of Premium Service Providers and embark on your tax registration process with confidence. Contact us Contact us today!