Everything You Need to Know About the One Stop Shop (OSS)
What is OSS?
The One Stop Shop (OSS) is a system established by the European Union to simplify the process of VAT compliance for businesses selling goods or services online to customers in EU Member States. Previously the Mini One Stop Shop (MOSS), the reforms came into effect on July 1st, 2021.
There are a number of VAT schemes in the UK and EU that make the VAT process simpler, but none are as comprehensive as OSS. Under the OSS scheme, businesses can register for VAT in one Member State, and then use that registration to declare and pay VAT on all cross-border sales within the EU through a single electronic portal. This means businesses don’t have to register for VAT in every EU Member State where they have customers, which can be time-consuming and costly.
The One Stop Shop covers two types of cross-border supplies:
- B2C (business-to-consumer) supplies of goods, such as ecommerce sales.
- B2C supplies of services, such as digital services.
The OSS system is designed to simplify VAT compliance for businesses and make it easier for them to sell goods and services across the EU. It’s part of the wider EU ecommerce package, which includes other measures aimed at promoting cross-border ecommerce within the EU.
What’s the difference between the Union and non-Union One Stop Shop?
The One Stop Shop VAT scheme has two initiatives, Union OSS and non-Union OSS.
The EU's Union OSS is available to businesses already established in the EU and registered for VAT. The non-Union One Stop Shop is intended for businesses not established in the EU. This includes companies based in third-countries such as the United States or China (and the UK following Brexit).
Both the Union and non-Union options allow companies to declare and pay VAT due on their distance sales of goods and services to EU customers using the single electronic portal, whether they’re based within the EU or a third country.
So, with the One Stop Shop VAT system, even if you sell across the EU, you’ll only be required to register with one country and file one VAT return. Any VAT you’ve collected and remitted to your local tax authority will then be distributed to the relevant EU countries on your behalf.
How to register for the OSS system
To use the One Stop Shop, you must first register. When registering for OSS, you need to select the Member State where you’ll be identified for VAT purposes. This will be the Member State where you’ll make your VAT declarations and pay VAT.
EU businesses should register in their Member State. Non-EU businesses will typically register in the Member State where the majority of their customers are based or opt to register with the country where registration is easiest. Non-EU businesses registering for the One Stop Shop VAT scheme will be allocated a VAT ID number beginning EU.
You can register for the One Stop Shop by submitting an online application form to the tax authority of your chosen country for OSS registration. You also be required to provide supporting documentation, such as proof of VAT registration or identification documents.
Once your registration has been processed, you’ll receive confirmation from the tax authority in your chosen Member State. You can then activate your account on the One Stop Shop and start declaring, collecting, and paying VAT for your EU sales.
What are the benefits of the One Stop Shop VAT scheme?
There are many benefits to the One Stop Shop, for businesses both inside and outside the EU. These include:
Simplified VAT compliance
The One Stop Shop simplifies the VAT compliance process for businesses selling goods or services across EU Member States. Instead of registering for VAT in each Member State, businesses can register for the OSS system in one Member State and submit a single VAT return for all their cross-border sales.
Reduced administrative burden
With the OSS system, businesses no longer need to deal with the different VAT compliance requirements in each Member State. This reduces the administrative burden and makes it easier for companies to comply with their VAT obligations.
Improved customer experience
Thanks to the One Stop Shop VAT scheme, businesses can provide a better customer experience by ensuring that VAT is correctly charged and collected at the point of sale, regardless of where the customer is located.
The One Stop Shop with Taxually
At Taxually, we can take care of the One Stop Shop registration process for you, file your OSS returns, and pay VAT when it’s due.
To find out more, book a free call with one of our VAT experts. We offer bespoke solutions for your business, can optimize your VAT costs, and help you reach millions of new potential customers.