OSS VAT for webshops: which VAT do you charge EU consumers?
Selling from the Netherlands or Belgium to consumers in other EU countries? Sooner or later you will run into OSS. When do you charge your own country's VAT, when your customer's, and how do you report it? An overview.
The €10,000 threshold
Since 1 July 2021 there is a single EU-wide threshold of €10,000 per calendar year. It adds up your distance sales of goods to consumers in other EU countries, together with any telecom, broadcasting and electronic services to consumers in other EU countries. Amounts are excluding VAT and cover all countries combined, not each country separately.
| Situation | Which VAT |
|---|---|
| Below €10,000 (this year and last year) | Your own country's VAT, for example 21% Dutch or Belgian VAT. |
| You pass €10,000 during the year | From the sale that takes you over: the VAT of your customer's country. |
| Above €10,000 last year | All year: the VAT of your customer's country. |
| You opt in | You may charge the customer's country's VAT even below the threshold. In the Netherlands that choice applies for at least 2 years. |
What is OSS?
The One Stop Shop saves you from registering for VAT in every EU country. You register in your own country and file one OSS return per quarter for all your sales to consumers in other EU countries. Your tax authority passes the VAT on to the other countries.
- Return and payment: by the last day of the month after the quarter (30 April, 31 July, 31 October, 31 January).
- A quarter without sales still needs a nil return.
- Domestic sales stay in your regular VAT return.
Which rate?
Above the threshold you charge the rate that applies to that product in your customer's country. Some standard rates: Netherlands 21%, Belgium 21%, Germany 19%, France 20%. Reduced rates differ by country and product, so check them for your range. The European Commission publishes rates in its TEDB database.
When OSS does not apply
- Sales to businesses with a valid VAT number: an intra-Community supply with reverse charge. See reverse charge to Belgian businesses.
- Sales in your own country: ordinary domestic VAT.
- Sales outside the EU: export, usually 0%.
- Goods already stocked in the customer's country (for example in a local fulfilment centre): that is a domestic sale there, and you usually need a VAT registration in that country.
OSS in Shopify
Shopify can charge VAT per EU country when you tell it in your tax settings that you use the Union OSS scheme. Shopify does not file your OSS return; each quarter you need an overview of sales per country and rate. Your invoices also need to show the rate and VAT amount of the customer's country.
How PeppolKit helps
For every order PeppolKit picks the VAT treatment (domestic, OSS, reverse charge or export) from your country, your customer's country and a live VIES check of the VAT number, and puts the right rate on the invoice. The monthly ZIP export gives your accountant all invoices and credit notes in one go.
Frequently asked questions
Is the €10,000 threshold per country?
No. It is one threshold for all your distance sales to consumers in other EU countries combined, plus telecom, broadcasting and electronic services to those consumers.
Do I have to use OSS?
No, it is a simplification. Above the threshold you must pay the customer's country's VAT; without OSS you would do that through a VAT registration in each country.
Does OSS apply to sales to businesses?
No. A business customer with a valid VAT number in another EU country gets a reverse charge invoice, outside OSS.
When is the OSS return due?
Every quarter, by the last day of the following month: 30 April, 31 July, 31 October and 31 January.
The right VAT rate on every invoice.
Install PeppolKit: domestic, OSS, reverse charge or export, decided per order.
Install in Shopify Start free with 10 invoices a month.An explanation for orientation, not tax advice. Rules depend on your situation; check with your accountant or your tax authority.