Simplifying Cross-Border Sales: How the OSS Facilitates VAT Compliance for EU Selling

When starting a company in EU, it is not necessary to obtain a VAT ID in every country to sell your products or services. Thanks to the introduction of the OSS (One-Stop Shop) system under the regulation on OSS 2021, the VAT requirements for cross-border sales within the EU have been simplified for businesses both within and outside the EU.

For businesses located outside the EU, there are specific schemes to consider depending on the nature of the goods or services being sold. If you are selling physical goods, the Import One-Stop Shop (IOSS) scheme is applicable. By registering for IOSS in one EU member state, you can declare and pay VAT on your imports to customers located within the EU using a single VAT return.

If you are selling digital goods and services, you can register for the Non-Union OSS scheme. This scheme allows you to register for VAT in one EU member state and report and remit VAT for your sales of digital goods or services to customers within the EU through a single online portal. This eliminates the need to register for VAT in each individual EU country where you have customers (If you have a US LLC you can discover how to online sale in EU in: How to sell to EU having a US LLC). 

By taking advantage of the appropriate OSS scheme, you can simplify your VAT obligations, reduce administrative complexities, and ensure compliance with EU regulations while selling your products or services across borders.

For businesses located within the EU, the options are similar. The IOSS scheme can still be used to declare and pay VAT on cross-border sales of physical goods to EU customers. Additionally, the Union OSS scheme is available for reporting and remitting VAT on sales of digital goods or services to EU customers.

These schemes provide a streamlined approach to VAT compliance and enable businesses to focus on expanding their cross-border operations without the burden of individual VAT registrations in multiple EU countries. For any doubt on VAT schemes, taxes and accounting don´t hesitate to ask our Free Online VAT and tax Consultant in EU.

By centralizing your VAT reporting and payment obligations through the OSS schemes, you can effectively manage your cross-border sales within the EU and ensure compliance with VAT regulations. In other words, only a single VAT registration is needed, and it has to be done in the Member State of Identification (MSI): Member State where the taxable person is registered to utilize a One Stop Shop scheme and fulfill their VAT obligations in the Member State(s) of consumption. It is important to note that a taxable person can only register in a single Member State to participate in a specific scheme. Are you interested in discovering your Member State of Identification (MSI) to facilitate your VAT registration and enable a seamless expansion? Get to know it in our article: Who has to get a vat id number and where?

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