What is the EU VAT One-Stop Shop (OSS)? Schemes and returns

The One-Stop Shop (OSS) is an EU system that lets businesses declare and pay VAT due in other Member States through one electronic return, filed in a single Member State (the Member State of identification). It covers sales to consumers, so sellers do not have to register for VAT in every country they ship to.

How OSS works

OSS grew out of the mini One Stop Shop (MOSS), which began on 1 January 2015. From 1 July 2021 it was extended to cover a wider range of supplies. The European Commission lists three special schemes:

  • Union scheme: for businesses established in the EU, covering cross-border services to consumers and intra-Community distance sales of goods. Non-EU businesses can also use it for certain supplies of goods.
  • Non-Union scheme: for businesses not established in the EU that supply services to consumers in the EU.
  • Import scheme (IOSS): for distance sales of goods imported from outside the EU in consignments worth no more than EUR 150.

Returns are filed quarterly under the Union and non-Union schemes and monthly under the import scheme. Under the EU VAT Directive, a Union scheme return is due by the end of the month after the quarter it covers, and it must be filed even if there were no sales that quarter.

Worked example

Imagine a hypothetical seller established in one EU country that sells EUR 30,000 of goods to consumers in two other EU countries in a year. That is above the EUR 10,000 EU-wide threshold, so VAT is due in each customer's country at that country's rate. Without OSS, the seller would need a VAT registration in both countries. With the Union scheme, it files one quarterly OSS return at home, listing sales and VAT per country of consumption, and pays the total there.

Why it matters for an online store

For stores that sell across borders to consumers, OSS turns many foreign VAT registrations into one return. The Commission estimates a reduction in red tape of up to 95% for businesses that register with OSS.

Common mistakes

  • Picking and choosing sales. If you use a scheme, you have to declare all supplies that fall under it through the OSS return.
  • Putting domestic or B2B sales in OSS. OSS covers supplies to consumers (B2C). Your ordinary sales at home, and your other obligations, still go through your national VAT return.
  • Counting the threshold per country. The EUR 10,000 threshold is counted per calendar year across all qualifying cross-border B2C sales in the EU, not separately for each country.

See also VAT and place of supply.

This page is general information, not tax advice. Check the current rules with a tax adviser or your tax authority.

Sources