OSS declaration

The OSS declaration. You may have heard it passed by before. Either way, definitely worth knowing about again if you are a business-to-consumer (B2C) seller. The OSS scheme stands for the One Stop Shop scheme. This is the way to make your VAT easier to calculate if you sell to consumers in other EU countries. And the great thing is that with this scheme, you no longer have to declare VAT in different EU countries, but can simply arrange this from your own country. Ideal right? No more hassle from foreign Tax Authorities, just one central point through your own Tax Office. They can't make it any nicer.

The Union scheme

Then you also have the Union scheme. And that is the part of the OSS meant for EU entrepreneurs. It actually works quite simply. You sell your stuff or services to consumers in other EU countries and you pay the VAT to the tax authorities in your own country. Do you have customers in Germany, France and Italy? Then you pay all VAT here in the Netherlands and the Tax Administration makes sure the right amount ends up in all those countries. All you have to do is use the correct VAT rate of the relevant country.

How does the OSS scheme work?

It is not something you have to worry about and goes through in a few steps:

1. Register with the Inland Revenue: You only do that once. From then on, you can always use OSS.
2. Check the correct VAT rate of your customer's country: Each EU country has different VAT rates. Check the rate and calculate it on the invoice.
3. Every quarter you file OSS returns: You then collect all sales and the VAT amount per country. You then indicate that in one statement.
4. Pay the tax in one go: You pay the total amount of this VAT to the Dutch tax authorities. They then make sure this arrives in the relevant countries.

No separate registrations in each country, no separate payments and, above all, no hassle. Just everything through one system.

Benefits OSS scheme

Arranging everything in one system and not making things difficult. In fact, you used to have to register separately in each EU country where you had customers (today there are 27). But that is long gone.

With OSS, you use one portal and one declaration. And that is really super convenient if you do a lot of business within several EU countries. Another advantage is that you will never again miss or misapply a VAT return. The tax authorities have really made things a lot clearer for entrepreneurs.

When are you OSS liable?

The OSS scheme is for any entrepreneur selling across borders to EU consumers. Some good examples:

1. Webshops: Do you sell your products to customers in other EU countries? Then you can arrange VAT through OSS.
2. Digital service providers: Think of entrepreneurs offering e-books, software, online courses or streaming services to consumers across borders (but therefore within the EU).
3. Service providers: Companies providing services such as tourism services or consultancy services to consumers within the EU.

We said it before, but this scheme is really meant for B2C (business-to-consumer) sellers. Different VAT rules apply to B2B (business-to-business) sellers.

Why do you need to file OSS returns?

All Tax Administrations within the EU have to tax now. Super unfortunate, but it's no different. Yet you don't have to file this tax immediately for small jobs abroad. As an entrepreneur, you have to file this tax return if you supply products or services to customers (within the EU) and exceed the €10,000 turnover threshold per year. So don't worry if you are a small player. Because do you sell less than €10,000? Then you can continue to use VAT from your home country. But if you do cross that 10K threshold, then you are obliged to use OSS.

So: if your turnover is below the €10,000 threshold remains, you may use your home country's VAT. You do this very simply.

• You just enter the VAT in box 1a of your Dutch VAT return.
• And that works the same as for domestic sales, because you charge Dutch VAT.

We said it before, but for the Tax Authorities, it is super clear if you submit it through the OSS system. Saves some work for them too.

How does calculating and declaring VAT through OSS work?

Do you use the OSS scheme? Then calculate VAT based on the VAT rate of your customer's country. Each EU country has its own VAT rates. You can find these rates through official sources, or use accounting software that calculates them automatically.

Just a quick example. Suppose you sell a product to a customer in Germany. In Germany, there is a VAT rate of 19%. For an invoice of €100 exc. VAT, you then charge:

• €100 × 19% = €19 VAT.
  The total price will then be €119. Indicate the VAT rate and VAT amount on your invoice. Because this should also be clear to your international customers!

You then declare this VAT via the OSS portal. The portal then wants to know a few things from you. You tell by country:

1. The total turnover you made in that country.
2. The VAT amount you calculated according to local rates.

Then, once you file the return, you pay the total VAT amount of all your OSS sales to the Inland Revenue at once. They will then ensure that this VAT amount is forwarded to your customers' countries.

Replacing the MOSS scheme with OSS

"The MOSS, do you remember it?" Once upon a time (until July '21) there was the MOSS scheme (Mini One Stop Shop). This scheme was used for VAT payments on digital services. Think products like e-books and software. Super outdated and especially very limited to digital only. For this reason, the OSS scheme created.

If you were already using MOSS, you are automatically switched to OSS. This will save you even more time and make the VAT party even easier!

How do you file OSS returns with the tax authorities?

It's very simple and fast!

1. Sign up at the Tax Office.: Register through the OSS portal.
2. Keep track of your sales: Note which products or services you sold. Not to mention in which countries and which VAT rate you applied.
3. Filing the declaration: Every quarter, you log in to the OSS portal and fill in all your details. You will then immediately see how much you have to pay.
4. And pay up: Pay the total VAT amount to the tax authorities in the Netherlands. They will take care of the rest.

Need advice on your OSS declaration?

Do you find it difficult to set everything up properly? Or do you want to make sure your VAT records are correct? We understand that all too well! At Van Passe B.V., we are ready to help you. So you avoid mistakes and are always on time. And so you will have time for what really matters: growing your business.