What is the OSS (One Stop Shop) Declaration?

The OSS (One Stop Shop) declaration is an electronic reporting system that enables businesses located outside the European Union or within the EU to manage their VAT obligations from a single hub for their goods sales and service supplies to B2C consumers across the EU (European Commission, 2021).

This system eliminates the obligation for cross-border e-commerce companies to register for VAT separately in each EU country. Instead, businesses declare and pay the VAT for their sales to all EU countries to the tax administration of a single member state of their choice.

What are the Advantages of the OSS (One Stop Shop) Declaration?

The system significantly reduces operational costs for companies focusing on the international e-commerce market. Furthermore, businesses using the OSS (One Stop Shop) declaration break free from the complexities brought by local legislations. Other advantages provided by this declaration include:

• The requirement to open separate tax registrations in 27 different EU countries, work with different financial advisors, and submit declarations in various languages for each country comes to an end. At this point, all transactions are managed through a single portal and in a single language.
• VAT registration, tracking, and consultancy fees paid separately in each country are eliminated.

In addition to the elements above, the EU ensures coordination between tax offices for the One Stop Shop declaration. In this context, the business deposits the total VAT amount into a single account, and the relevant country distributes this amount to the other member states.

Who Can Use the OSS (One Stop Shop) Declaration?

A wide range of audiences who sell goods and services to B2C consumers located inside or outside the EU borders benefits from the system. Within this framework, taxpayers falling under the scope of the OSS (One Stop Shop) declaration are grouped into three main categories:

User Group	Activities Covered	Country of Registration
Non-EU Businesses (Non-Union)	Telecommunications, broadcasting, and electronic services provided to consumers in the EU	Any EU member state of choice
EU Businesses (Union)	Intra-EU distance sales of goods and all types of B2C service supplies	The member state where the business’s headquarters is located
E-Commerce Marketplaces	Platforms facilitating sales and acting as the deemed supplier (e.g., Amazon, Etsy, etc.)	The member state where the platform is registered

Taxpayers in the groups listed above can easily benefit from this system. Moreover, e-commerce companies outside the European Union (e.g., in Turkey) also have the right to benefit directly from this system if they ship goods from an EU warehouse or provide an electronic service. For companies within the EU, the use of the system becomes mandatory as soon as the annual exemption threshold of €10,000 is exceeded (KPMG, 2023).

How Does the OSS (One Stop Shop) Declaration Preparation Process Work?

The operation of the system relies entirely on a digital infrastructure and consists of three main stages. The process begins at the time of sale and is completed with the transfer of the tax. The OSS (One Stop Shop) declaration operational workflow consists of the following steps:

• The current VAT rate of the EU country where the consumer is located (e.g., 19% for Germany, 20% for France) is added to the sale price and collected.
• All taxes collected until the end of the month following the three-month quarterly periods of each calendar year (January-March, April-June, July-September, October-December) are entered into the system via a single OSS declaration.
• The total declared VAT amount is paid in a single transfer to the tax authority of the member state where registered. The receiving country then automatically distributes the money to the respective consumer countries.

Businesses registered in the system must store invoice and transaction records of their sales digitally for 10 years for potential audits (PwC, 2022).

How is the OSS Declaration Registration Process Done?

Businesses wishing to join the OSS (One Stop Shop) declaration system can complete their application processes electronically. Companies established in EU member states register for the system through the tax office portal of the country where they are registered.

Businesses located in non-EU countries like Turkey, which do not have a physical company or warehouse in the EU, choose a Country of Registration for themselves under the Non-Union Scheme (European Commission, 2021). Companies whose registration applications are approved are assigned a special OSS VAT number. From that moment on, businesses can start declaring all their EU B2C sales from a single hub.

You might also be interested in our article titled “What is a VAT Number in Estonia? When Should It Be Obtained?“.