What is an OSS Return?

What is an OSS Return?

The One-Stop Shop (OSS) scheme is a VAT simplification mechanism introduced by the European Union to streamline VAT compliance for businesses selling goods or services cross-border to customers (B2C) within the EU. The OSS allows businesses to register, file, and pay VAT for multiple EU member states through a single online portal in their home country, eliminating the need to register for VAT in each country where sales occur.

Who Qualifies for the OSS Scheme?

The OSS scheme is primarily designed for businesses engaging in cross-border sales of goods and services to non-VAT-registered customers (B2C). Qualifying activities include:

1. Distance Selling of Goods:

   • Businesses selling and delivering goods directly to consumers in other EU countries.

   
   

2. Supplies of Digital Services:

   • Sale of electronically supplied services (e.g., e-books, online courses, software).

   
   

3. Certain Other Services:

   • Telecommunication, broadcasting, and electronically supplied services.

   
   

4. Threshold:

   • Businesses with total cross-border B2C sales exceeding €10,000 annually across all EU states must apply VAT in the customer’s country. Below this threshold, VAT can be applied based on the business’s home country.

How to Register and File an OSS Return

• Registration:

  • Register for the OSS scheme via your country’s tax authority (e.g., in the Netherlands).

  • Registration covers all sales to non-VAT-registered customers across the EU.

• Filing OSS Returns:

  • Returns are filed quarterly, covering all eligible cross-border sales.

  • Businesses report:

    • The VAT due for each EU member state where customers are located.

    • Total sales per country.

  • Returns and payments are submitted in the home country, and the tax authority distributes the VAT to the relevant EU member states.

  • Digital Submission: Returns must be submitted digitally. The return can be filed by FinTaxNL Solutions. In some cases, you need eHerkenning

Avoiding Double Taxation

1. Accurate VAT Application:

   • Ensure VAT is charged based on the customer’s location. Use tools or software to correctly determine the applicable VAT rate for each country.

   
   

2. Zero Registration Duplication:

   • OSS eliminates the need to register for VAT in every EU country where sales occur. Ensure you exclusively use the OSS for eligible transactions to avoid duplicate registrations.

   
   

3. Track Exempt Sales:

   • Certain transactions (e.g., sales to VAT-registered businesses) may not require OSS. Maintain separate records for such transactions to avoid errors.

Benefits of the OSS Scheme

• Simplifies Compliance: Eliminates the need for multiple VAT registrations.

• Centralized Reporting: All VAT obligations for EU sales are handled through a single quarterly return.

• Supports Cross-Border Growth: Reduces administrative burdens, enabling businesses to expand across EU markets.

By using the OSS scheme, businesses can efficiently manage VAT for cross-border B2C sales – Business to consumers Sales - while ensuring compliance with EU VAT regulations.