OSS – the EU VAT One-Stop-Shop

What is the One-Stop-Shop (OSS)?

The OSS is a platform that serves as a simplified VAT reporting and payment system for businesses involved in distance sales within the EU. It means that a business is not required to register for VAT in each individual EU country and file VAT returns there once the EU threshold of €10,000 of sales is exceeded.

The most important facts about OSS

• You must register for OSS when the EU distance sales threshold of €10,000 is exceeded (transactions within the threshold are intra-community distance sales and digital services, e.g. streaming or e-books).
• OSS allows a business to report and pay VAT on cross-border sales in one EU member state, rather than registering for VAT in each member state where it has customers.
• Registration to OSS is voluntary.
• OSS returns are submitted quarterly, within one month of the end of the quarter.
• The VAT payable is paid centrally through the OSS and the relevant authority forwards the amounts to each EU country concerned.
• Only B2C sales are reported in the OSS (B2B sales are not).
• Online sellers cannot declare local B2C supplies through OSS (these are reported in the local VAT return).
• No invoices need to be issued to report intra-community distance sales through OSS.
• When using the OSS, every transaction has to be reviewed to assess whether it qualifies for OSS or must be reported in the local VAT return. ACLA Auditors can help you handle this distinction and prepare the relevant returns.

Transactions that cannot be reported via OSS

• Local B2C and B2B supplies – reported in the local VAT return.
• Intra-community transfers of goods – in the country of destination a taxable intra-community acquisition generally exists; the VAT payable is normally deductible as input VAT in the destination country (provided the input VAT rules are met). Since such transfers cannot be declared via OSS, local VAT registration in the country of destination is required.
• B2B supplies of goods.