Compliance

One-Stop Shop (EU VAT)

An EU VAT return mechanism that lets a business declare cross-border business-to-consumer sales in one member state.

Aliases: OSS, One-Stop Shop, Union OSS, 欧盟增值税一站式申报, 一站式服务

What OSS solves

Before July 2021, a business selling business-to-consumer across the EU had to register for VAT in every member state where it exceeded the local distance-sales threshold. The One-Stop Shop replaced that with a single registration and a single quarterly return, while the tax itself is still allocated to the country of consumption.

The scheme sits in the VAT Directive and is operated electronically by each member state's tax authority.

The three variants

Union scheme. For a business established in the EU, covering intra-EU distance sales of goods, domestic supplies by electronic interfaces, and services to consumers.

Non-Union scheme. For businesses established outside the EU, covering services to consumers. It is not a route for goods.

Import scheme. Known as IOSS, covering imports of consignments up to 150 euros.

For a non-EU seller shipping goods into the EU, the goods route usually runs through IOSS or through the marketplace's deemed-supplier status, not through the Union scheme.

The 10,000 euro threshold

Cross-border distance sales of goods within the EU are taxed in the member state of the customer once total cross-border sales exceed 10,000 euros per year across all member states. Below that threshold, the seller may apply the VAT of its own member state. Above it, destination VAT applies, and OSS is the practical way to remit it.

What the return requires

The member state of consumption for each supply
The VAT rate applied there
The taxable amount
Adjustments and corrections for earlier periods

The money is paid to the registering member state, which distributes it. The 2023 EU customs reform package would change how import data reaches the same authorities, but it does not alter the OSS reporting logic itself. Records must support every line, and corrections for previous periods go through the same channel.

Relationship to platform facilitation

Where a marketplace is treated as the deemed supplier, the marketplace accounts for the VAT and the seller's own OSS obligation may fall away for those sales. This is why two sellers with identical turnover can have very different OSS filings: the split depends on whether the platform is facilitating the sale. The same logic appears in marketplace facilitator laws in the United States, and platform data reporting under DAC7 feeds the same tax authorities.

Practical failure points

Registering in a country where the business has no establishment and no valid registration basis. Reporting sales at the home-country rate after crossing the threshold. Ignoring marketplace sales in the OSS return when the platform was not the deemed supplier.

Primary source: Council Directive 2006/112/EC, Title XII, Chapter 6; Commission explanatory notes on VAT e-commerce rules.

FAQ

Is OSS a tax or a registration?

It is a reporting and payment mechanism. The tax itself is VAT in the member state where the customer is located; OSS only simplifies how it is declared and paid.

Can a non-EU business use OSS for goods?

The non-Union scheme covers services only. For goods, non-EU sellers use [IOSS](/wiki/ioss) for low-value consignments, or rely on the marketplace's deemed-supplier status.

What is the 10,000 euro threshold?

It is the annual total of cross-border business-to-consumer distance sales within the EU. Above it, destination VAT applies; below it, the seller may charge the VAT of its own member state.

How often is the OSS return filed?

Quarterly, with a correction mechanism for earlier periods. Payment accompanies the return to the member state of registration.

Does OSS replace national VAT registration?

It replaces multiple distance-sales registrations, not all registrations. Local storage, establishment or specific transactions may still require a domestic registration.