On 1 July 2021, the rules for collecting VAT on goods and services to EU consumers will change.


Distance selling of goods and services to EU consumers

If your total sales to EU consumers exceed EUR 10,000 then you can take advantage of the EU scheme for VAT One Stop Shop.

You must register for the scheme with your local tax authority. VAT is collected on sales to EU consumers based on the local VAT rate and is registered, reported and paid through your local tax authorities.

With OSS, you register, report and settle the VAT with the rate applicable in the country of delivery. The place of delivery is often the buyer’s country, but not always (!). Same goods have different rates in various EU countries. It is your responsibility to ensure that the correct VAT rate is used.

Excise goods, such as tobacco and alcohol, are, like second-hand goods “margin scheme”, not included in the OSS scheme.

The existing scheme for the sale of electronic services (TBE) is extended to apply to all services to consumers (hotel services and construction services as well as access to different sorts of events such as culture, art, sports, education, etc.)


The OSS scheme is voluntary

  • It is possible to maintain local VAT registrations, but then OSS cannot be used.
    • EU stock – here the ordinary VAT registration is still a requirement.
  • If you are registered under the scheme, it must be used consistently.
    • You cannot choose to use the scheme for distance selling in some countries and settle VAT, via a local VAT registration, in other countries.
  • If you choose the scheme, VAT numbers must be closed in case you do not have stock in the country in question.
  • The OSS declaration is reported quarterly and independently from the periodic VAT report

You are fee to make use of the scheme before EUR 10,000 is exceeded.

If you have chosen the scheme, you are bound by your choice for 2 years. Documentation requirements and the filing obligation are 10 years.


VAT refund

With the OSS scheme any purchase VAT must be refunded through the electronic EU VAT refund application. In countries where you have a VAT registration due to local stock or local BtB sales you can deduct the input VAT with the periodic VAT report.


To keep in mind:

  • how the complexity can increase with the handling of OSS combined with stock in other or more EU countries (eg. AMAZON FBA etc.)
    • online sales of goods from warehouse in DE to consumer in DE are not distance selling and OSS cannot be used.
    • online sales from a German warehouse to an Austrian consumer are distance selling – reporting with the OSS.
  • how is it with your payment system / webshop, do you have a VAT matrix and is it set up?
    • Remember: the seller is liable for VAT which is not charged!
  • how do you correctly transfer VAT data from your payment system / webshop to your financial system?
  • You must ensure correct posting and documentation of the VAT charged
  • Are you familiar with VAT groupings / codes?
  • If you purchase and sale goods in the same EU country, you must keep your VAT number
  • How do your prices appear to customers and how do you manage foreign VAT in general?
  • Do you have an overview of the specific VAT rate in other EU countries?
  • might your products be subject to a foreign tax or excise?