What is the OSS procedure?
The One-Stop-Shop (OSS) is a central reporting procedure for VAT in cross-border EU trade. Online retailers who sell goods to private customers (B2C) in other EU member states must, as a rule, pay the VAT arising there in the country of destination – that is, where the customer is located. Without OSS, retailers would have to register for VAT in every single EU country. Through the One-Stop-Shop, you instead report these sales in a bundled form via a single platform – in Germany via the Federal Central Tax Office (BZSt).
When does the OSS procedure apply?
The decisive factor is the EU-wide delivery threshold of 10,000 euros net per year. It applies to all intra-Community distance sales to private customers taken together – not per country.
- Below 10,000 euros: You may continue to show and pay German VAT. The OSS procedure is not mandatory, but voluntary participation is possible.
- Once the 10,000 euros are exceeded: From the transaction that exceeds the threshold onwards, the VAT of the respective country of destination applies as a matter of obligation. You must either register in every country concerned or – considerably more practical – participate in the OSS procedure.
Typical use cases are classic distance sales via your own shop as well as sales through marketplaces, provided you yourself remain the party liable for the tax. Important for Amazon-FBA retailers and comparable models: if goods are stored in a foreign warehouse, additional local registration obligations often arise there that the OSS does not cover. You should definitely have these situations reviewed.
How does registration work?
In Germany, registration is carried out online via the BZSt online portal (BOP). A prerequisite is a user account as well as a valid ELSTER certificate. The procedure in brief:
- Registration: You apply for participation electronically in the BOP. Registration generally takes effect from the beginning of the calendar quarter following the application.
- Observing deadlines: Anyone who wants to participate immediately because the delivery threshold has been exceeded must complete registration by the 10th day of the month following the first relevant transaction.
- Reporting: You submit the OSS declaration quarterly – in each case by the end of the month following the quarter (i.e. by 30 April, 31 July, 31 October, 31 January). Sales are reported broken down by country of destination and the tax rate valid there.
- Payment: You transfer the entire VAT in a bundled form to the BZSt, which forwards the amounts to the EU member states.
What you should watch out for
A nil return is also mandatory: if no OSS-relevant sales were made in a quarter, you must nevertheless submit a report on time. Missed or late declarations can lead to exclusion from the procedure. In addition, pay attention to the correct foreign tax rates – these differ in some cases considerably – and to a clean separation of OSS sales in your accounting and in the shop system.
Conclusion
The OSS procedure saves online retailers from multiple registrations abroad within the EU and considerably simplifies VAT on distance sales. What remains complex is the correct delineation – particularly with foreign warehouses, marketplace sales and the correct application of tax rates. As a tax firm specialized in e-commerce, we examine your specific situation, handle the registration and the ongoing reports and ensure that deadlines are met. Please feel free to get in touch with us.