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 1, 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, and allows businesses to declare a variety of other services provided to non-taxable persons across various EU member states.

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. This efficient service ensures that 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 the One Stop Shop (OSS) works

The One Stop Shop (OSS) is designed to help businesses selling goods or services across EU member states manage their VAT obligations efficiently through a single system. Here’s how it works:

Centralized VAT registration

Instead of registering for VAT in each EU country where goods or services are sold, businesses can register for the OSS in just one EU member state. This reduces administrative burden and saves time.

Quarterly VAT reporting

Businesses file a single quarterly VAT return via the OSS portal in their chosen member state. This report includes sales made to customers in all EU countries, specifying the VAT owed for each destination country.

Payment simplification

The business makes one consolidated VAT payment to the tax authority of their registered member state. This authority then distributes the VAT to the respective EU countries where the goods or services were sold.

Digital accessibility

The OSS operates entirely online, making it easy for businesses to register, file returns, and make payments without navigating complex international tax systems.

By consolidating VAT processes, the OSS significantly reduces compliance complexity, allowing businesses to focus more on growth and customer satisfaction while ensuring they meet their VAT obligations across the EU.

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, including the ability to save time by streamlining VAT processes. 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 offering comprehensive support services and specialist advice to ensure that VAT is correctly charged and collected at the point of sale, regardless of where the customer is located.

The Future of the One Stop Shop

The One Stop Shop has transformed VAT compliance for businesses in the EU, streamlining cross-border tax management. As digitalization and global trade grow, the OSS is set to play an even bigger role in simplifying processes and enabling seamless trade across member states, aligning with the EU's vision for a more unified marketplace.

Future expansions of the OSS could broaden its scope beyond B2C sales of goods and certain services. Potential developments include adding financial and insurance services, simplifying compliance for SMEs, and deeper integration with the Import One Stop Shop (IOSS). These changes aim to create a more efficient, global tax solution and reduce administrative burdens for businesses.

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.

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