As of July 2021, VAT One-Stop-Shop (OSS) scheme replaced the MOSS (mini-one-stop-shop scheme), providing even more opportunities for online businesses to report VAT in a simplified way. OSS offers three schemes that help avoid multiple VAT reports and payments in countries of the European Union. Here is how you can benefit from it.
Instead of registering your e-commerce business in each country where you provide services or sell goods, you can register on the OSS scheme from one of the Member States. The country of identification will distribute your reported payments every quarter.
After completing a single registration, a business gets access to register for VAT in any member state on one platform, declaring and paying VAT quarterly (or on a monthly basis for Import-OSS users) and communicating with the tax authorities of its identification state.
Unlike its predecessor, the MOSS scheme, OSS allows more businesses to benefit from the single VAT submission platform. Now, most suppliers of B2C services and distance sellers interacting with customers within the EU can sign up for OSS.
While the MOSS scheme provided two registration options, the OSS consists of three schemes for online businesses. These include Union-OSS, Non-Union-OSS, and Import-OSS – suited for the EU-based, non-EU-based companies and importers. One individual or a company can take advantage of one or multiple schemes. You can learn more about the Import-OSS here.
A wide range of transactions covered by OSS
OSS simplifies VAT compliance for both businesses located in the EU (including North Ireland) and the third countries.
Union OSS allows reporting for:
Services supplied by EU-based companies to individual customers
Distance sales of goods within the EU (applicable to both EU and non-EU based suppliers)
Domestic sales of goods (applicable to both EU and non-EU based suppliers)
Non-Union OSS users can report for:
Services supplied to EU-based customers by non-EU companies
Registering for the OSS scheme can be done via one of the EU member states. Both individuals and companies – eligible online sellers or electronic interfaces – can opt in the scheme. You should keep in mind that even if your business is not required to register for VAT in your home country, you can still sign up for the OSS scheme if your sales volume exceeds 10 000 EUR.
VAT compliance for OSS users
OSS users should account for VAT in the countries where their customers are located. Therefore, they should be consistent with the VAT rates applied to the products in each country where the goods or services are acquired.
OSS VAT deadlines Union and Non-Union OSS users must submit their VAT reports and pay the VAT until the last day of the month following the end of a quarter.
OSS VAT declarations
Each quarterly declaration must include the country of consumption, its VAT rate, VAT amount, and the total amount payable.
10,000 EUR threshold covers cross-border supplies of TBE services and intra-Community distance sales of goods but not supplies of other types of services carried out to customers in the EU. In order to evaluate if the business does not exceed 10,000 EUR threshold, current and preceding calendar year sales should be taken into account.
Member States may not require non-EU suppliers to appoint a tax representative to be able to use the non-Union scheme (Article 204 of the VAT Directive), but the supplier is free to appoint one.
The non-EU supplier cannot declare supplies of goods in the non-Union scheme, since the non-Union scheme only covers supplies of services.
You can read about VAT rates in the EU here.