One-Stop Shop (OSS) is an electronic solution that helps ecommerce stores and online businesses to comply with EU VAT obligations. If you are an online seller or have an ecommerce store, sometimes it can be challenging to comply with VAT obligations in Europe. OSS was established in 2021 to simplify VAT return process for online sellers in Europe. Since its introduction, Business to Consumer (B2C) sellers are not required to register for foreign VAT or to complete VAT filings in countries where they are selling goods.
How OSS simplifies VAT returns process: When you sell products to consumers in different countries, you need to pay VAT in those countries. However, if you have an eCommerce store in EU that engages in cross-border sales of products to consumers, OSS helps you avoid filling VAT returns in multiple countries. It is cumbersome to file tax returns in multiple EU countries. Instead, with OSS, you can just file your VAT returns in one place. For instance, it can be to the home country you are selling from or to a service provider. You, the seller, need to remit the VAT quarterly to your home country’s VAT authority, which will then forward the VAT to the local tax authorities in countries you are selling goods and services. To make it even easier, you can use online service providers such as Taxdoo that can automate these processes for you.
- 1 How Does One-Stop Shop VAT Work?
- 2 Who Qualifies for OSS? Who Can Use OSS
- 3 What is Not Included in the OSS?
- 4 What Changed Since July 1, 2021
- 5 Who is Affected by July 1, 2021, Changes?
- 6 One-Stop Shop Service Providers for EU VAT
- 7 Summary of One-Stop Shop (OSS) VAT Return for Ecommerce
- 8 One Stop Shop VAT FAQ
How Does One-Stop Shop VAT Work?
OSS simplifies work and reduces VAT registrations across the EU. It allows sellers to report distance sales (selling via the internet, e-mail or telephone) on a single VAT return in one EU country. This eliminates the need to have multiple VAT registrations across the EU. As such, online marketplaces can declare and pay VAT electronically in one of the EU countries. OSS applies to all business-to-consumer (B2C) sales of goods and services within the EU.
Who Qualifies for OSS? Who Can Use OSS
You qualify for OSS if you are an online seller or a marketplace (electronic interface) in EU. If you qualify, you can register for VAT electronically in a single member state for all sales of goods and services within the EU.
Therefore, you can use OSS if you are:
- An online seller within the EU. You can use the OSS for supplying goods and services online to consumers within the member states.
- Online marketplaces. Websites, platforms, and application program interfaces (APIs) can use OSS for facilitating the sell of goods and services to buyers.
- Non-EU sellers. Sellers who are not EU residents may also use the OSS. They need to register as a ‘non-Union’ taxpayer with the tax authority of any EU member state.
What is Not Included in the OSS?
There are some transactions that are not included in the OSS. They include:
- Business to business (B2B) sales
- Imports, purchases, and expenses that are not reported in the OSS
- Domestic sales
What Changed Since July 1, 2021
- Online marketplaces can register in one EU member state. They can then use the registration details for declaration and payment of VAT on all distance sales of goods and cross-border supplies.
- Abolishment of the previous threshold for distance sale of goods within the EU and introduction of the new threshold of EUR 10,000.
- New record-keeping requirements. There is an introduction of new record-keeping requirements for online marketplaces to facilitate the supplies of goods and services. This includes where online marketplaces are not a deemed supplier.
- End of low-value relief consignments. Previously, there was a VAT exemption for the importation of small consignments of a value up to EUR 22 is abolished. Therefore, all goods imported into the EU are subject to VAT. Excise goods like alcohol and tobacco have been exempted from OSS.
Who is Affected by July 1, 2021, Changes?
Some of the parties that will be affected by these changes include the following:
- Ecommerce sellers. Ecommerce sellers within and outside the EU that are selling goods below 150 EUR.
- Online marketplaces. All online retailers that facilitate the sale of goods in and out of the EU, like Shopify and Amazon.
- Post offices and courier services. Post offices and courier services will need to check for VAT compliance and in some cases collect VAT for consignments.
One-Stop Shop Service Providers for EU VAT
If you want to file your EU VAT obligations, or you want a service related to VAT in the EU, you can get assistance from any of the following companies.
Taxdoo One-Stop Shop
Taxdoo is an online platform that automatically calculates ecommerce taxes in the EU. You connect the program to your online shop whether it is hosted on Amazon, eBay, Shopify, or any other service. Taxdoo reviews your business transaction data and then evaluates your VAT. It then provides a dashboard where you can manage tax data. It has the ability to import data from the ERP system.
You can deploy Taxdoo on cloud, SaaS and the web. It offers APIs to online marketplaces and ERP systems. The platform recognizes your tax obligations and displays information like distance selling threshold and the use of foreign warehouses on the customer’s dashboard. To use it, you just need to register on Taxdoo online and then connect VAT channels with ERP or WaWi system.
Taxdoo Pricing Plans
- Taxdoo starter – €0 per month
- Taxdoo professional – €49 per month
- Taxdoo premium – €299 per month
If you book for your personal free demo, an expert will guide you through the sales tax dashboard and discuss the status quo and the next steps.
Hellotax is a platform that automates VAT for online retailers in the EU. It was founded in 2016 and is located in Spain. This tax software allows for quick completion of tasks like the monitoring of threshold and the movement of goods. Hellotax employs tax accountants in all EU countries for quality assurance and provides the best processes possible. Hellotax offers services like automated VAT registrations, calculations, and returns to online sellers on eCommerce platforms like Amazon and Shopify.
Hellotax can be deployed on the cloud, SaaS, and web. Hellotax has a free forever plan available for VAT management. For VAT registration and returns subscriptions, prices start from €99country and month.
- Free forever annual VAT registration and Returns – €99 per month for one country
- Monthly VAT registrations and returns – €119 per month for one country
- One-time payment of €300
Avalara Tax Software
Avalara is a business’s tax compliance platform for transaction taxes, VAT registrations, excise, tax filing, tax calculation, consumer use tax, audit trail, communications, returns and reporting, research, classify, and update content and data. You can integrate it with Magento, Microsoft Dynamics, NetSuite, QuickBooks, Sage, Shopify Plus, Stripe Invoicing and Zuora.
You can get all important IOSS numbers in just 7 days, with just a single registration, you can trade with all 27 members, manage monthly returns, and help you with filing and payment of VAT. To start using the service, you need to register, and you will get an IOSS identification number. Then, after that, you can calculate VAT at the point of sale. You can then file your return on a monthly basis.
- Basic (returns) – $19 per month
- Standard (returns and calculations) – $83 per month
- Custom – You need to request a quote
Summary of One-Stop Shop (OSS) VAT Return for Ecommerce
Many businesses are facing challenges when it comes to paying VAT. VAT rates can vary from one country to the other. This makes the payment of VAT challenging for ecommerce businesses selling goods and services to more than one EU country. The One-Stop Shop was created to simplify VAT returns in multiple countries in the EU.
One Stop Shop VAT FAQ
What does OSS mean in VAT?
OSS stands for One-Stop Shop in the context of VAT. It simplifies VAT reporting and payment scheme for businesses that sell goods or services to consumers in other EU countries. With OSS, businesses can register with a single EU country and file one VAT return to report and pay VAT on all of their cross-border sales. It helps ecommerce stores and online businesses to comply with EU VAT obligations.
What's OSS VAT registration?
One Stop Shop VAT registration is the process by which businesses can register for the One-Stop Shop (OSS) scheme within the European Union (EU) to fulfill their EU VAT obligations more efficiently. Instead of registering for VAT in each individual EU country where they make sales, businesses can choose to register with a single EU country of their choice. This chosen country becomes their "Member State of Identification" for OSS purposes.
What's EU OSS VAT return?
The EU OSS VAT return is a report that businesses registered under the One-Stop Shop (OSS) scheme must submit to the tax authorities of a single EU country of their choice. This return allows businesses to report and pay the VAT on their cross-border sales of goods or services to consumers in other European Union (EU) countries.
Does OSS apply to B2B?
No, OSS does not apply to B2B sales. OSS applies to businesses that sell goods or services to consumers in other EU countries. For B2B sales, businesses must continue to register for VAT in the EU countries where they make sales. They must also file VAT returns in those countries.
What is the difference between OSS and IOSS VAT?
OSS is for businesses selling to consumers in multiple EU countries, while IOSS is for businesses importing goods from outside the EU and selling to EU consumers. Both schemes simplify VAT reporting and payment.
What's EU VAT Mini One Stop Shop?
The EU VAT Mini One-Stop Shop (MOSS) is a simplified VAT reporting and payment scheme for businesses that sell electronic services or telecommunication/broadcasting services to non-taxable consumers in EU Member States in which they do not have an establishment.
What's Vertex tax?
Vertex is a solution that improves tax accuracy and consistency in sales and purchases. It offers tax determination, data analysis, compliance, and document management. It's suitable for online cross-border transactions. Furthermore, it integrates well with ERP, procurement, and billing systems.
Does Avalara handle One Stop Shop VAT?
Yes, Avalara handles One-Stop Shop (OSS) VAT. You can get all important OSS VAT in just 7 days, with just a single registration, you can trade with all 27 members, manage monthly returns, and help you with filing and payment of VAT.