How does OSS work in practice?

OSS is divided into three schemes:

• Union Scheme: This scheme is for businesses with VAT-liable sales of goods and services within the EU to private individuals. If your business sells goods to other EU countries and does not exceed the threshold of €10,000 in annual sales, you can opt to use the OSS Union Scheme.
• Non-Union Scheme: This scheme is for businesses not established in the EU but providing electronic services to EU customers. For example, a U.S. company providing digital services to EU customers can use this scheme.
• Import Scheme: This scheme simplifies VAT reporting on goods imported into the EU from third countries and sold to EU customers. It applies to goods sold with a value up to €150.

A business wishing to use OSS must register in one of the EU countries. From there, they can report VAT on their sales across the EU via a single quarterly report. The reporting is done digitally through a VAT portal available in the country where the business is registered, eliminating the need to register in each country where the business has VAT-liable sales.

Storebuddy and OSS

With Storebuddy, you can set up OSS (One Stop Shop VAT). Storebuddy automatically allocates the VAT to the different countries, saving you from manually distributing the VAT and reducing administrative time. This is also a scalable solution as you expand your sales across more EU countries.

Benefits of OSS

There are many benefits to using OSS for e-commerce businesses:

• Streamlined VAT Reporting: Businesses can report VAT in multiple countries through a single declaration.
• Reduced Administration: OSS eliminates the need to register for VAT in every country where the business has customers.
• Scalable Solution: For businesses looking to expand to more EU countries, OSS provides a practical solution that simplifies VAT reporting.

OSS creates a more predictable VAT process by allowing businesses to handle all their VAT obligations through a single portal. This saves time and reduces the risk of errors or delays in reporting.

How to register for OSS

Businesses wishing to use the OSS scheme must register online via the VAT portal in the EU country where they wish to be registered. Typically, a business will choose the country where it is established or has significant business activity. Non-EU businesses wishing to use the Non-Union Scheme must also choose an EU country to register in.

Once registered, the business must begin reporting VAT via OSS quarterly. It’s important to note that even though reporting is done in one country, the VAT rules of individual countries still apply to VAT-liable sales. Therefore, the business must calculate and report VAT based on the rates applicable in the countries where their customers are located.

What does OSS (One stop shop VAT) mean for your business?

OSS is an essential reform for e-commerce businesses selling to private individuals in multiple EU countries. It simplifies and centralizes VAT reporting, saving time and resources. Businesses can choose to use OSS to avoid registering in each member state, thus easing their administrative burden.

With OSS, businesses can grow and expand their sales across borders within the EU without worrying about complex VAT rules in each country. Therefore, OSS is a crucial part of the future for e-commerce businesses aiming to operate efficiently in the EU.