Since July 1, 2021, the European Union has put in place the OSS (One-Stop Shop) system, a key initiative to simplify VAT management on intra-EU sales between businesses and consumers (B2C). This scheme has revolutionized cross-border trade by simplifying tax obligations, particularly for eCommerce companies.
In this article, we explore in detail how the OSS works, its benefits, the associated obligations, and how Odoo can become an essential tool for managing your VAT efficiently.
What is intra-EU distance selling?
Intra-EU distance selling covers B2C transactions where a seller registered for VAT in an EU member state sells goods or services to customers located in other member states. These transactions often take place through online platforms, by email, or through other remote ordering methods.
Before the One-Stop Shop was introduced, companies had to register for VAT in every country where they sold their products. This was a heavy administrative burden, sometimes holding back companies' international growth.
With the OSS, this complexity is largely reduced.
The One-Stop Shop (OSS): how does it work?
The One-Stop Shop is an online portal that centralizes VAT reporting and payment for intra-EU B2C sales. Companies can use this system to declare all their sales to consumers in other EU member states, while being registered only in their country of origin.
Two main schemes exist:
- The Union scheme: It applies to goods and services supplied at a distance within the European Union.
- The import scheme: For goods with a value of €150 or less imported into the EU.
The €10,000 threshold: a point to watch
The OSS system introduces a €10,000 threshold for intra-EU sales. Here are the consequences of this threshold:
- Below €10,000: Companies can continue to apply the VAT rate of their country of origin.
- Above €10,000: They must charge VAT at the rate applicable in the buyer's country.
This threshold applies to the annual revenue of your distance sales in the EU. It is therefore crucial to monitor your figures to avoid any administrative inconvenience.
How to manage OSS reports and returns?
Companies using the OSS must generate regular reports to declare their sales and pay the VAT. These reports include detailed information on transactions by country.
With Odoo, this management becomes simple and smooth:
- Access the VAT return: In Odoo, go to Accounting → Reporting → Tax Return.
- Generate the OSS reports: Select the OSS Sales or OSS Imports option, then export your data as PDF, XLSX or XML.
- Submit on the tax portal: Log in to your tax authority's OSS platform to upload your reports and make your payment.
These automated steps reduce the risk of errors and save precious time.
Why use Odoo to manage the OSS?
Odoo, with its integrated accounting modules, is a major asset for eCommerce companies wanting to adapt quickly to OSS requirements.
- Data centralization: Odoo gathers all your transactions in a single tool.
- Task automation: Generating OSS reports is intuitive and fast.
- Simplified compliance: Comply with local regulations with no extra effort.
- Time savings: Avoid long, complex administrative procedures in each member state.
With Odoo, you can not only track the €10,000 threshold, but also anticipate your tax obligations and ensure perfect compliance.
The benefits of the OSS for cross-border trade
- Administrative simplification: A single registration for all sales in the EU.
- Assured compliance: VAT rates automatically adapted to the country of purchase.
- Easier growth: The OSS system encourages companies to explore new European markets.
- Suited to small and large companies: Whether you are a start-up or an established business, the OSS is within your reach.
Conclusion
Since its introduction in July 2021, the One-Stop Shop (OSS) has become an essential lever for eCommerce companies wanting to sell within the European Union. By simplifying VAT management, it lets companies focus on their growth, without being held back by complex tax obligations.
By combining the OSS system with a powerful tool like Odoo, you can manage your intra-EU sales with peace of mind, while complying with local regulations.