OSS Process: The One-Stop-Shop Explained Simply
The OSS (One-Stop-Shop) procedure is a special EU regulation that allows you to report and pay sales tax on cross-border B2C sales for all EU countries through a single point of contact. In Germany, this is handled by the Federal Central Tax Office. This eliminates the need for tax registration in each individual destination country.
At a Glance
- OSS has been in effect since July 1, 2021, and has replaced the previous national supply thresholds as well as the MOSS procedure.
- Only cross-border B2C sales within the EU are reported, aggregated through the Federal Central Tax Office (BZSt).
- If annual net sales across the EU total 10,000 euros or more, value-added tax is due in the customer’s country.
- B2B sales (reverse charge) and domestic sales continue to be reported via the regular sales tax return.
What is the OSS process?
Through the OSS procedure, you report your EU-wide B2C sales in aggregate to the Federal Central Tax Office. For each country where a purchase was made, you specify the applicable tax rate, report all sales in a quarterly return, and pay the total sales tax in a single lump sum. The Federal Central Tax Office then distributes the tax to the respective EU countries.
At what threshold does the OSS procedure become relevant?
As soon as your total cross-border B2C sales in the EU exceed 10,000 euros net per year, value-added tax (VAT) is due in the customer’s country. Up to this threshold, you may charge the German VAT rate. Above this threshold, you must either file through the OSS or register individually in each destination country.
What is reported via OSS, and what isn't?
You use OSS exclusively to report cross-border sales to private customers (B2C) within the EU. Domestic sales, B2B sales with a valid VAT ID number, and imports from third countries are not included. In these cases, the regular sales tax return, the reverse-charge procedure, or the IOSS procedure apply.
General guidance; not tax advice. Consult your tax advisor regarding your specific situation.
Sales Type
Report via OSS?
Cross-border transactions with individual customers in the EU (B2C)
Yes
Domestic Sales
No, regular sales tax return
Imports from third countries up to 150 euros
No, IOSS instead
Practical Example of the OSS Procedure
Jonas sells an online course to individual customers in Germany, Italy, and the Netherlands. As soon as his EU-wide cross-border sales exceed 10,000 euros net, he must report the Italian and Dutch tax rates. Instead of registering in both countries, he reports everything quarterly to the BZSt via the OSS procedure and pays the value-added tax in a single lump sum.
ablefy classification
If you sell through ablefy using the reseller model, you don’t have to handle OSS yourself: Legally, ablefy makes the sale through its subsidiary namotto and handles the EU value-added tax. If you sell in your own name, you’re responsible for filing the report. Learn more at ablefy.io.
Common Misconceptions
- "OSS also applies to B2B sales." No. For business customers with a VAT ID number, the reverse-charge procedure applies, not OSS.
- "With OSS, I have to register in every EU country." The opposite is true. OSS replaces precisely these individual registrations.
- "OSS and IOSS are the same thing." IOSS applies only to imports from third countries with a goods value of up to 150 euros. OSS applies to sales within the EU.
- "For amounts under 10,000 euros, I need to use OSS." Up to this threshold, you may apply the German tax rate; OSS remains optional.
Frequently Asked Questions About OSS Procedures
Is participation in the OSS process voluntary?
Yes. However, once you exceed the 10,000-euro threshold, it's the simplest solution because it saves you from having to register individually in each target country. If you participate, the OSS applies uniformly across all EU countries.
Do I need to issue invoices for OSS sales?
There is generally no requirement to issue invoices for these B2C sales. You can issue invoices on a voluntary basis.
What is the difference between OSS and IOSS?
OSS applies to sales within the EU. IOSS applies to imports of goods from third countries with a value of up to 150 euros to private individuals.
