Digital Businesses and E-Commerce Companies
How do EU businesses use the One Stop Shop for VAT compliance on digital sales?
The EU One Stop Shop (OSS) allows businesses making B2C supplies of digital services, goods, or services in multiple EU member states to register in a single EU country and file one quarterly VAT return covering all EU sales. Without OSS, businesses need VAT registrations in each EU country where their B2C revenue exceeds the EUR 10,000 threshold. OSS dramatically simplifies cross-border EU VAT compliance for digital and e-commerce businesses.
What are the different OSS schemes available?
The EU OSS comprises three separate schemes:
- Union OSS: For EU-established businesses selling digital services, goods, or services B2C across EU
- Non-Union OSS: For non-EU established businesses selling digital services to EU consumers
- IOSS: Import One Stop Shop for goods imported from outside EU valued at EUR 150 or less sold to EU consumers
- Eligibility: Each scheme has different registration eligibility criteria based on where the business is established
- Return: Quarterly VAT return filed in the registration country in Euros; covers all EU member state VAT
- Payment: Single VAT payment in Euros; registration country distributes to each member state
Frequently Asked Questions
- Can a business use OSS for all its EU B2C sales?
- OSS covers most cross-border B2C supplies but not all. Excluded supplies include local supplies (where goods are located in the customer's country at the time of supply and the seller is VAT-registered there), supplies where the customer's country applies a different rule (e.g., land-related services must be taxed locally regardless of OSS registration), and B2B supplies (reverse charge applies, not OSS). Businesses with complex supply types should verify which supplies are covered by OSS versus requiring local registration.
- What happens if a business deregisters from OSS?
- A business deregistering from OSS must register for VAT in each EU member state where it continues to make taxable B2C supplies above local thresholds. Deregistration is effective from the end of the quarter in which the business applies. Historical OSS returns cannot be amended after deregistration; amendments must be handled through local registrations in the relevant member states. Businesses should consider carefully before deregistering from OSS as re-registration requires a waiting period.