EU VAT One Stop Shop (OSS)
When selling goods or services to consumers across the EU, you can register once, file one VAT return, and make one payment all through a single online portal in the EU country of your choice.
The One Stop Shop (OSS) system helps both EU and non-EU businesses manage VAT obligations for cross-border sales within the EU. It reduces the need for VAT registration in multiple Member States.
The OSS can also be used by online marketplaces that facilitate sales between sellers and EU consumers.
How the OSS works
To use the VAT OSS, you will need to register via the OSS portal of the EU country’s tax authority, which will become your “Member State of Identification”. You charge VAT at the rate of the customer’s country, which is also called destination-based VAT.
You only need to submit one OSS return quarterly or monthly that lists all your EU sales and pay VAT once in the country that you’re registered in. The tax authority will then forward any outstanding VAT to the countries that you have sold goods and services to. You will need to keep your records for up to 10 years in case of audits.
This means one registration, one return, one payment for all your EU sales.
OSS schemes
There are different OSS systems (called schemes) that are suited to different types of sales:
The Union scheme
The Union scheme can be used by both EU-established and non-EU established businesses. It covers the cross-border sales of goods and services to consumers in other EU countries. For this scheme, you can file a quarterly VAT return through the OSS portal of the EU country where your business is established. The VAT you apply is at the customer’s country rate.
However, non-EU established businesses cannot use this scheme to declare and pay VAT due on supplies of services. Instead, they can use the non-Union scheme for their supplies of services to consumers in the EU.
The Non-Union scheme
The Non-Union scheme is for businesses established outside the EU, with no EU fixed establishment. It covers services supplied to EU consumers (for example, digital, consultancy, or professional services). For this scheme, you can choose any one EU country to register for OSS and submit a quarterly VAT return through that country’s OSS portal.
The Import scheme (IOSS)
The Import scheme (IOSS) is for non-EU sellers and EU established sellers, including marketplaces, importing low-value goods (up to EUR 150 per order) to EU customers. It is designed for distance sales of imported goods from outside the EU. For this scheme, you must file a monthly VAT return through an IOSS registration system in one EU country where you are registered to use the scheme. The VAT on the goods imported is collected at the time of payment, which avoids the customer having to pay VAT on delivery.
Businesses, marketplaces, and the OSS
If you are a business, you are responsible for collecting and reporting VAT only on your direct sales to consumers. For this, you can use the Union OSS (for supplies of goods and services to consumers in the EU if you are established in the EU or just for supplies of goods to consumers in the EU if you are a non-EU established business) or the Non-Union OSS (if you are established outside the EU and are supplying services to consumers in the EU). Remember, you must apply the VAT rate of the customer’s EU country.
If you sell through a marketplace, such as a website or app where many different businesses can offer their products or services to many customers in one place, they may be deemed to be the seller or supplier for VAT purposes in certain cases. The marketplace would then be responsible for collecting and paying VAT when:
- non-EU sellers sell goods to EU customers through their platform, or
- goods are imported (value of up to EUR 150) and sold via the platform.
For this, they can use the IOSS or Union OSS, depending on the transaction.
Sample story
Juan's cross-border business made easy
Juan’s business sells beauty products to customers in France, Italy, and Belgium. He is based in Spain, so registers through the Spanish tax authority’s OSS portal. He charges each customer their local VAT rate on each purchase. Once a quarter, he files one OSS VAT return in Spain. Spain’s tax authority then forwards the VAT owed to France, Italy, and Belgium. Juan can run his business without worrying about multiple VAT registrations in different EU countries.
Find out about the VAT OSS in your country:
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