VAT One-Stop Shop (OSS)
What is the VAT One-Stop Shop (OSS)?
The VAT One-Stop Shop, or OSS, lets an online shop declare in a single return the VAT it owes to every EU country where it has consumer customers. Once cross-border sales to consumers in the EU pass €10,000 a year, VAT follows the customer’s country rate; instead of registering in each country, the shop files one quarterly OSS return at home. Registering and calculating stay the accountant’s work.
Example
A Bulgarian shop sells into Romania, Greece and Germany. In its first year, sales to EU consumers come to €8,400 — under the threshold, so home VAT applies. In the second they reach €26,000: the threshold is passed, and from then on VAT is due at the rate of the country the customer is in.
That is felt in the margin, because shoppers see a final price. A €60 shelf price at a 20 per cent rate leaves €60 ÷ 1.20 = €50.00 net. The same €60 at 24 per cent leaves €60 ÷ 1.24 = €48.39, which is €1.61 less per order. Across 500 such orders the gap is €805. Standard rates across the EU differ widely, so a cross-border price is calculated rather than copied.
Instead of registering for VAT in three countries, the shop registers for the Union scheme and files one return each quarter, paying through it what is owed to each country.
Why it matters for a business
The threshold counts all cross-border sales to EU consumers together, not country by country, and it is crossed earlier than most owners expect. After that every order carries the customer’s national rate, which changes the price, the document and the report.
The scheme does not cover everything. Sales to VAT-registered businesses follow different rules, and stock held in another country usually still requires a local registration. Goods imported from outside the EU have their own scheme. The decision belongs to your accountant; the shop simply has to be able to carry it out — recording the customer’s country and the rate applied, and exporting sales by country. The shop takes all of that on; which parts are switched on is agreed with your accountant during an online store build.
What to ask
- Does your accountant expect the threshold to be crossed this year, and what follows if it is?
- Does the shop record the customer’s country and the rate applied on every order?
- Can sales be exported grouped by country and rate for the reporting period?
- How are prices shown abroad: the same final amount everywhere, or a different one?
- Do you hold stock in a warehouse outside the country, and what does that add?
- Do you also sell to businesses, and are those orders separated in the reports?