From Mini One Stop Shop (MOSS) to the One Stop Shop (OSS)
Navigate EU VAT on B2C sales by understanding the principles behind the MOSS and OSS schemes and how they streamline cross-border tax compliance.
The Mini One Stop Shop (MOSS) was a value-added tax (VAT) simplification measure in the European Union. It allowed certain businesses to manage their VAT obligations for specific sales across all EU member states through a single registration and tax return. On July 1, 2021, the MOSS system was replaced and expanded by the One Stop Shop (OSS) scheme. This updated the VAT reporting framework to cover a much broader range of transactions.
Understanding EU VAT on B2C Sales
When a business sells goods or services to a private consumer in another European Union country, it must navigate the “place of supply” rules to determine where VAT is owed. For many business-to-consumer (B2C) transactions, the VAT is due in the country where the customer is located. This principle ensures that the tax revenue is allocated to the Member State of consumption. This creates a compliance challenge, as a business could be required to register for and remit VAT in every EU country where it makes a sale.
The original MOSS system was designed for providers of telecommunications, broadcasting, and electronically supplied services (TBE). A single, EU-wide threshold of €10,000 for cross-border sales of both goods and services was introduced. If a company’s total cross-border sales to EU consumers exceed this amount, it must charge VAT at the rate applicable in the customer’s country.
Without a simplification scheme, a U.S.-based company selling software to customers in Germany, France, and Spain would need to register for VAT in all three countries. This would involve managing separate tax registrations, filing different VAT returns according to local rules, and making payments to three distinct tax authorities. The OSS system was created to eliminate this multi-registration requirement.
The MOSS and OSS Simplification Schemes
The original Mini One Stop Shop was divided into two schemes: the Union scheme and the Non-Union scheme. The Union scheme was for businesses with an EU establishment, while the Non-Union scheme was for businesses, such as those in the United States, with no physical presence in any EU country. Under MOSS, a U.S. company could choose one EU country to be its Member State of Identification and register for the Non-Union MOSS scheme there to file a single quarterly return for its TBE sales.
MOSS was absorbed into the more comprehensive OSS, expanding the scope beyond TBE services. The OSS now also covers intra-EU distance sales of goods and most other B2C services where the place of supply is the customer’s location. The Non-Union scheme is for businesses with no EU presence selling services, while the Union scheme can be used by non-EU businesses for intra-EU distance sales of goods from a warehouse in one EU country to consumers in others.
A business registers for OSS in a single EU country and uses that country’s online portal to file one quarterly VAT return and make one consolidated payment. That country’s tax authority is then responsible for distributing the collected VAT to the respective countries where the consumers were located. For businesses already registered under MOSS, the transition to OSS was automatic.
Information Required for OSS Registration
To register for OSS, a business must provide the following information:
- Legal and trading name of the business
- Full registered address
- National tax identification number from its home country
- A list of any previous VAT registrations held within the EU
- Identification of any fixed establishments in EU member countries
- URLs of websites and mobile applications used for sales
- Bank account details, including the International Bank Account Number (IBAN) and Bank Identifier Code (BIC)
The registration process is initiated on the tax authority portal of the chosen Member State of Identification. The choice of this country depends on the nature of the business’s sales. A non-EU business selling only services can register for the Non-Union scheme in any EU member state. However, if the business sells goods that are dispatched from a warehouse within the EU, it must use the Union scheme and register in the country where the goods begin their transport.
If goods are shipped from multiple EU countries, the business can choose to register in any one of those specific countries. Once the application is approved, the business will receive a unique OSS identification number, which will be used for all subsequent filings and communications.
The Quarterly OSS Return and Payment Process
Once registered for the OSS, a business must comply with a quarterly filing and payment cycle. The business must compile sales data for the reporting period, broken down by each EU Member State where sales were made. This data must also be broken down by the specific VAT rate applied, as rates for goods and services can vary between countries.
The business or its tax representative logs into the OSS portal of its Member State of Identification to complete the standardized VAT return. Aggregated sales figures and corresponding VAT amounts are entered for each destination country. The return must be submitted electronically by the end of the month following the end of the reporting quarter, for example, by April 30 for the first quarter ending March 31.
Upon submitting the return, the business must make a single payment for the total VAT due to the tax authority of its Member State of Identification. This payment must be received by the filing deadline and include a unique reference number generated by the OSS return to ensure it is correctly allocated. The tax authority of the registration country then handles the distribution of the VAT to the individual member states.