The €10,000 threshold, what counts as a cross-border sale, how member-state-of-consumption reporting works, and the two details (currency conversion, corrections) that are easy to get wrong by hand.
If you sell physical goods to consumers in more than one EU country, you've probably run into the term "OSS" — the One-Stop-Shop scheme — usually right around the point where a spreadsheet stops being enough. Here's what it actually means, without the compliance-firm jargon.
The problem OSS solves
Before OSS existed, selling into another EU country past a certain threshold meant registering for VAT in that country — a separate VAT number, a separate local return, for every member state you sold enough into. A seller doing meaningful volume in Germany, France, and Spain could end up filing three completely separate VAT returns, in three languages, on three schedules.
Union OSS replaced that with one registration (in your own country) and one quarterly return that covers every EU country you sold into. You still charge each customer VAT at their country's rate — that part doesn't change — but you report and pay it all through a single portal instead of registering everywhere.
Who actually needs it
There's a threshold: €10,000 per year, EU-wide, combining all your cross-border B2C sales of goods and digital services dispatched from your home country. Below that, you can usually keep charging your own country's VAT rate on those sales (a simplification, not a requirement — you can opt into OSS earlier if you want to).
Cross the €10,000 line and the simplification stops applying: from that point, you owe VAT at each customer's local rate, and OSS is the practical way to report it without registering country by country.
A few things that catch sellers out:
- The threshold only counts cross-border distance sales dispatched from your own country. Domestic sales (a German shop selling to a German customer) don't count toward it. Neither do sales you make from stock held in a different EU country — that's a separate, stricter rule (and if you hold stock abroad, the €10,000 simplification stops applying to you entirely, regardless of volume).
- B2B sales with a valid VAT number are out of scope for OSS. If your buyer gives you a VAT number, that's typically a reverse-charge transaction, handled differently and not part of an OSS return.
- Sales to customers outside the EU aren't OSS sales either. OSS only covers intra-EU distance selling.
What actually goes on the return
A Union OSS return is organized by member state of consumption — the country your customer was in — broken down by VAT rate (standard vs. reduced) within each country. For each combination, you report the total taxable amount and the VAT due, in EUR.
Two details that are easy to get wrong doing this by hand:
- Currency conversion uses the European Central Bank's rate on the last day of the return period (or the next published rate if that day has none) — not the rate on the day each individual sale happened. A quarter's worth of USD or GBP sales all convert at the same single rate.
- Corrections to an already-filed period don't get resubmitted. If you find an error after filing Q1, you don't refile Q1 — you add a correction line to your next return (Q2), referencing the period and country it corrects. Editing a filed return isn't how the scheme works.
Filing itself
Once you have the country-by-country numbers, filing is a matter of entering them into your national tax authority's OSS portal (or importing a formatted file where the portal supports it — Germany's BZSt accepts a specific CSV format for exactly this). The deadline is the end of the month following the quarter — so Q1 (Jan–Mar) is due by 30 April.
Where this gets tedious
None of the rules above are especially hard. What's tedious is applying them consistently across every order, especially once you're selling on more than one channel. Sorting hundreds of line items into domestic/OSS/out-of-scope, checking each one against the right VAT rate, and converting everything at the correct period-end rate is exactly the kind of mechanical work that's easy to get wrong by hand and easy to automate correctly.
That's the whole premise behind Vatlio: connect your sales channels, and get the country-by-country breakdown already built — ready to hand to your accountant, not filed on your behalf. See what your current quarter looks like, free.
Not tax advice. Vatlio prepares OSS/IOSS return summaries from your sales data. It does not file returns with any tax authority and does not provide tax advice — your accountant stays in control of the filing.