What is OSS and how does it simplify EU VAT for digital services and goods?
OSS (One Stop Shop) is the EU VAT scheme that allows businesses to register for VAT in one EU member state and declare and pay VAT on cross-border B2C sales of goods and services to customers across all EU member states through a single quarterly return. OSS replaced the previous MOSS (Mini One Stop Shop) for digital services from July 2021 and was extended to intra-EU distance sales of goods and certain domestic supplies.
What are the three OSS schemes?
The three OSS schemes: (1) Union OSS: for EU-established businesses supplying B2C services or selling intra-EU distance goods to customers in other member states. Register in the member state of establishment; (2) Non-Union OSS: for non-EU businesses supplying B2C services to EU customers. Register in any chosen EU member state; (3) Import OSS: see IOSS above. For each scheme, a quarterly OSS return is filed in the registration state, declaring sales and VAT by destination member state.
Frequently Asked Questions
- What is the EUR 10,000 threshold for OSS?
- Below EUR 10,000 annual cross-border B2C turnover within the EU, a business can apply the VAT rules of its home member state (not the customer's member state) to its cross-border B2C digital service and distance sale supplies. Once this threshold is exceeded, the customer's member state VAT rate and rules apply, and OSS registration becomes necessary to report and pay correctly. The EUR 10,000 threshold applies to the combined total of all cross-border B2C EU supplies.
- Can OSS be used for B2B sales?
- No. OSS applies only to B2C supplies (supplies to non-taxable persons). B2B intra-EU supplies of services are generally subject to the reverse charge mechanism in the customer's country. B2B distance sales of goods are subject to normal intra-community supply rules (zero-rated for the supplier, acquisition VAT for the buyer). OSS does not simplify B2B VAT obligations.