EU: Do you need to register for the OSS (One-Stop-Shop) system?

June 25, 2021

The EU VAT reform will profoundly affect VAT declaration and remittance for eCommerce retailers who have customers in the EU. Suppliers across the world are preparing to meet its new requirements and adapt to the changes, and to ensure business continuity, you need to know what to do. So, if you’re operating a business that sells goods in the EU, do you need to register for OSS? 

In this article, we’ll look into that question. 

Should you register for OSS? 

If you’re selling goods to end customers in different EU countries, then the OSS system could be very beneficial to you, regardless of whether you’re based in the EU or abroad. It’ll simplify VAT compliance, making it easier to declare and pay VAT: if you register for OSS, you’ll only need to declare VAT in one EU member state, and not in all countries in which you have customers. This way, you’d only have one quarterly VAT return to file. 

With that being said, however, you should know that using the OSS system is not mandatory. So if you prefer declaring and remitting VAT via separate VAT returns in each country where you’re selling your products and keeping your standard VAT registrations there, that’s possible. 

When would it make more sense not to register for OSS?

There are a few instances in which registering for OSS might not be necessary, or might not make sense for you and your business. For example:

  • You’re operating an EU business and selling less than €10,000 in the EU annually. Distance selling thresholds are now replaced by a pan-EU annual sales limit of €10,000. Under that limit, you need to charge VAT based on your home country’s rules, and file a local VAT return. 
  • You have inventories in multiple EU countries, and are selling to local customers exclusively. First, to be able to deduct VAT on B2B transactions in those countries, you need to keep your local VAT registrations. Additionally, if your customers are local, these are considered domestic B2C transactions.

  • You only have domestic transactions in the EU country where you’re established. If your customers are in the same country as you and you sell there exclusively, the OSS system is probably not relevant to you.
  • You’re importing goods. If you’re importing goods from non-EU inventories (i.e. if they’re located there at the time of purchase by your customers), and if their value is of €150 or less, you need to use the IOSS (Import-One-Stop-Shop) system. If their value is of €150 or more, standard import procedures apply, including VAT. 
  • You’re always selling through an online marketplace, and all your orders are of a value of €150 or less. In that case, the online marketplace that’s facilitating the sale is responsible for VAT. Examples of such marketplaces include Amazon, eBay, AliExpress, Etsy, Cdiscount, and more. 

To be able to make an informed decision and make the right choice on whether you should register for OSS, consult a tax expert.