EU Retailer Responsibility (OSS)

Owned by Darren Stretch
Last updated: Dec 07, 2023
3 min read

How VAT is handled for cross-border sales into the EU changed on July 1st 2021. In some ways it made tax declaration easier for selling across the EU, but there are changes you should have considered.

If you are a retailer who is domiciled within the EU, your sales on Fruugo will use the new OSS legislation calculation.

What is OSS?

The One Stop Shop (OSS) is a simplified way for EU retailers to account for VAT due on sales to customers across the EU.

If sales to customers are subject to VAT under the tax regime of the EU customer, rather than registering for VAT in every EU territory you have customers, retailers register in one member state (the member state of identification) and account for VAT due accross the EU on a single return in that state. The member state is typically their EU registered company country.

Basics

The changes from previous legislation for EU businesses is smaller for marketplace sales compared to non-EU businesses with the two key differences being:

  • The abolishment of the EU distance-selling thresholds set by each EU member country to instead use a single low EU wide sales threshold (10,000 EUR). The threshold applies to all EU wide sales and not only Fruugo.
  • The VAT rate on the order will be calculated at the EU customers location, not the businesses location. For example, a DE business (without additional VAT registrations) selling to a PL customer would see the order previously calculated by DE tax rules, whereas now it will be PL tax rules.

What do I need to do?

EU businesses will be required to register and use the OSS (One Stop Shop) to report all their EU sales (marketplace and own activity) in their chosen registered country / member state.

There are further changes you may need to take into consideration and you should familiarise yourself with how the reform affects your sales within the EU. For example, if you are shipping from another EU country(s), different to your established business, you may still require a VAT registration in that country(s) to hold and distribute stock from that location.

If unsure we would advise you speak to your tax advisors for assistance.

Registration

You should ensure that your OSS registration is active and ready to report all your EU sales. If you have not yet completed this process with your local tax office we would advise contacting them to ensure you complete this and are ready for the changes.

If unsure we would advise you speak to your tax advisors for assistance.

Which European countries are in the European Union?

In the countries which Fruugo is available, the following are within the EU (European Union):

Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Poland, Portugal, Romania, Slovakia, Spain and Sweden

Not yet registered?

If you are not OSS registered we would advise that you ensure this registration is completed alongside your Fruugo account integration. As the threshold of 10,000 EUR is relatively low it would be relevant to most accounts, and if you do not exceed the limit immediately you may quickly hit the threshold from your combined EU sales. If your registration will not be completed ahead of your Fruugo account please ensure you notify Fruugo to ensure your account configurations are adjusted accordingly.

Key Point Summary

  • Fruugo will apply VAT on your prices in these EU countries at the destination rate.
  • You will remit VAT for all EU country sales vour member state OSS registration.
  • You should include your tax ID on your shipment and declarations.