Executive Summary
VAT MOSS, replaced in 2021 by the broader OSS , covered only cross‑border B2C digital services. Since 1 July 2021, OSS extends the one‑stop return to most B2C supplies of services and Intra‑Community Distance Sales of Goods (WSTO). Below EUR 10,000 annual EU‑wide B2C turnover, you may tax in your home state; above it, tax in the customer’s country (via OSS or local VAT). For imports ≤ EUR 150, IOSS simplifies VAT at checkout. In Poland, OSS registration uses form VIU‑R; quarterly returns are VIU‑DO. Marketplaces can be deemed suppliers and must collect VAT in specific models.
VAT OSS vs VAT MOSS differences
- MOSS (Mini One Stop Shop)was replaced by the broader OSS (One Stop Shop) procedure on July 1, 2021.
Applied only to TBE services (telecom, broadcasting, electronic) sold B2C across the EU. Registration and quarterly filing were done in a single Member State (the Member State of Identification), but goods were out of scope.
- OSS (One Stop Shop) keeps the one‑return logic and widens the scope: besides TBE services, it covers WSTO (distance sales of goods within the EU) and several cross‑border B2C services. That change is transformative for e‑commerce fulfilment and dropshipping.
Intra‑Community Distance Sales of Goods (WSTO)
WSTO arises when goods are shipped from one Member State to a consumer in another Member State and the seller (or a third party on their behalf) handles transport. Under country of consumption rules, VAT is due where the transport ends.
EUR 10,000 threshold explained
If your total B2C intra‑EU turnover for the current and previous year does not exceed EUR 10,000, you may:
- continue to apply home‑state VAT and invoice per local rules, or
- opt voluntarily for OSS and tax in customer countries via the OSS return.
Once the threshold is exceeded, VAT is due in each customer’s Member State. Most sellers prefer Union OSS to avoid multi‑country VAT registrations.
VAT IOSS (Import One Stop Shop)
For imports of low‑value consignments (≤ EUR 150) from non‑EU countries (e.g., Asian marketplaces or own web shop):
- charge the destination VAT at checkout, show it on the receipt, and report it in a monthly IOSS return; the parcel is fast‑tracked at customs with the IOSS number;
- you may need an intermediary for IOSS if you are a non‑EU business without an EU establishment;
- IOSS covers B2C sales only; customs duties may still apply where relevant; consignments > EUR 150 are outside IOSS.
Registration in Poland (VIU‑R) and quarterly VIU‑DO declaration
If Poland is your Member State of Identification, you:
- register for Union OSS via the Polish VIU‑R form (electronic submission),
- settle cross‑border B2C VAT quarterly using VIU‑DO,
- pay a single amount in PLN; Polish tax authorities remit VAT to other Member States.
You must keep transactional records for 10 years and ensure correct VAT rates for each Member State.
Marketplace deemed supplier rules
Certain electronic interfaces (e.g., Amazon, Allegro) can be deemed to receive and resell B2C supplies, becoming liable for VAT. Typical cases:
- Imports ≤ EUR 150 where a platform facilitates a third‑country seller → platform collects VAT (often via IOSS) and issues the receipt;
- Intra‑EU B2C supplies when the seller is non‑EU and the platform facilitates the sale.
Where a marketplace is deemed supplier, the underlying seller may still need OSS/IOSS for other flows and must maintain audit records (order IDs, shipping country, VAT applied).
Dropshipping VAT compliance in EU
Common set‑ups include goods stored in one Member State (own warehouse/3PL) and shipped across the EU. Key points:
- If shipping cross‑border to consumers, transactions qualify as WSTO and are taxed in destination; use OSS.
- If you warehouse in multiple Member States, domestic B2C sales in those states are outside OSS and may require local VAT IDs.
- For non‑EU dropshippers, IOSS helps for direct imports ≤ EUR 150; for stock already inside the EU, assess Union OSS plus any domestic registrations.
Non‑Union scheme for UK businesses
UK sellers with no EU establishment can use the Non‑Union OSS to report B2C services supplied across the EU from outside the EU (digital and selected other services). Goods (WSTO) require Union OSS if the dispatch starts in the EU.
VAT rates in EU member states – practical notes
- Apply the standard VAT rate (or reduced, if eligible) of the customer’s country for WSTO/OSS transactions.
- Keep a VAT rate table in your e‑commerce system and update it periodically.
- Use the checkout logic that determines country of consumption (delivery address/transport end‑point). Make sure you can evidence the place of supply to avoid double taxation.
Corrections and compliance hygiene
- Errors in OSS returns are corrected in subsequent periods (no amended return for a closed quarter).
- Reconcile platform data, payment processors and shipping reports to avoid under/over‑reporting.
- Keep your EU tax identification numbers, OSS/IOSS IDs and evidence for 10 years. Consider whether a fiscal representative is required in particular Member States for domestic registrations.
Quick checklist (for cross‑border e‑commerce)
- Track EUR 10,000 EU‑wide threshold across all B2C services and WSTO.
- Decide: OSS (Union/Non‑Union) and/or IOSS.
- Poland as MSI? File VIU‑R; report via VIU‑DO (quarterly).
- Confirm marketplace deemed supplier status and data flows.
- For imports ≤ EUR 150: collect VAT at checkout via IOSS (monthly), appoint intermediary where required.
- Maintain product VAT rate mapping by Member State; review quarterly.
- Capture evidence of country of consumption to avoid double taxation.
Country of identification (background from MOSS → still relevant for OSS)
Under MOSS, the Member State of Identification (MSI) depended on where a business was established (business establishment or fixed establishment). The concept survives in OSS. In practice:
- EU‑established seller → MSI is the Member State of establishment (e.g., Poland if your head office is in Warsaw).
- EU‑established with multiple FEs → choose one MSI, but the warehouse locations still matter for domestic transactions.
- Non‑EU seller → for Non‑Union OSS (services), pick any Member State that accepts your registration; for IOSS, many non‑EU sellers appoint an intermediary and use the intermediary’s MSI.
Why it matters: the MSI dictates where you register (VIU‑R in Poland), file (VIU‑DO quarterly / IOSS monthly), and how you pay one consolidated amount that the MSI redistributes to Member States of consumption.
Variants: Union OSS, Non‑Union OSS, and IOSS (quick map)
- Union OSS – for EU‑based sellers making WSTO and certain cross‑border B2C services. Typical e‑commerce scenario with stock in an EU warehouse shipping to consumers across the EU.
- Non‑Union OSS – for non‑EU sellers providing B2C services in the EU (e.g., SaaS to EU consumers by a UK company). No goods in scope.
- IOSS – for imports ≤ EUR 150 shipped from outside the EU direct to EU consumers. VAT is charged at checkout; parcel is fast‑tracked using the IOSS ID.
How the mechanism works (step‑by‑step)
- Determine place of supply: for WSTO and most covered services, use the country of consumption (where transport ends / consumer resides).
- Check EUR 10,000 threshold: if not exceeded in current + previous year, you may apply home VAT; otherwise tax in the consumer’s country.
- Register: choose MSI (e.g., Poland) and file VIU‑R (Union/Non‑Union) or IOSS (with an intermediary if required).
- Configure checkout: display the correct VAT rate of the customer’s country; capture evidence (address, IP, courier data).
- Report & pay: submit VIU‑DO quarterly for OSS (or monthly for IOSS), pay one amount; the MSI sends VAT to each Member State.
- Corrections: adjust prior errors in a later return (do not amend closed quarters). Maintain records for 10 years.
EUR 10,000 threshold explained — worked examples
- Example A (below threshold): A Polish micro‑seller of digital templates has EUR 8,500 B2C sales across PL, DE, CZ. They can apply Polish VAT to all those sales or opt into OSS for simplicity.
- Example B (threshold exceeded mid‑year): A Czech web shop crosses EUR 10,000 in May. From the next sale after crossing, VAT is due in each customer country (e.g., DE 19%, FR 20%); seller registers for Union OSS and charges destination VAT going forward.
Marketplace deemed supplier – what changes for you
When an electronic interface facilitates sales, it can become a deemed supplier and collect VAT itself (particularly imports ≤ EUR 150 or non‑EU sellers shipping intra‑EU). Effects:
- Your settlement may exclude those transactions from your own OSS/IOSS returns (the platform accounts for them), but you must keep records for audit.
- If you also sell via your own shop, you still need OSS/IOSS for those flows.
- Marketplaces may require your EU VAT numbers, proof of stock location, and confirmation whether an intermediary is appointed for IOSS.
Dropshipping & warehousing scenarios
- Single EU warehouse (e.g., Poland) → cross‑border B2C shipments are WSTO; use Union OSS. Polish domestic sales remain in PL VAT return (outside OSS).
- Multiple warehouses (PL + DE) → deliveries from the German warehouse to German consumers are domestic DE supplies (outside OSS) → you need a German VAT ID. Cross‑border flows from either warehouse to other Member States are OSS.
- Direct import to the consumer (CN → FR) → use IOSS if ≤ EUR 150; over EUR 150 → standard import VAT + customs, IOSS not available.
UK perspective (Non‑Union scheme) – practical view
Post‑Brexit, UK businesses are non‑EU. Options:
- Digital B2C services to the EU → register for Non‑Union OSS (single e‑return) or get local VAT numbers in each Member State.
- Goods dispatched from the EU (e.g., UK seller stores in PL) → use Union OSS for WSTO and keep a PL VAT registration for Polish domestic sales.
- Goods dispatched from the UK to EU consumers → consider IOSS for ≤ EUR 150 shipments; for higher values, import VAT/customs at the border and potentially local VAT registrations.
VAT rates & pricing – implementation tips
- Maintain an EU VAT rate matrix (standard and reduced) in your ERP. Validate at least quarterly.
- Price display: show VAT‑inclusive prices with the correct country rate once the customer selects a delivery country.
- Avoid double taxation by documenting the transport end point (carrier proof, delivery confirmation) and applying the same country in invoicing and reporting.
Filing in Poland: VIU‑R / VIU‑DO – mini guide
- Who can file in PL? Sellers using Poland as MSI (head office or chosen state for Non‑Union scheme).
- Forms:VIU‑R (registration) → VIU‑DO (quarterly returns). IOSS is monthly; if non‑EU, often via intermediary.
- Payments: settle in PLN; include currency conversion where applicable.
- Archives: store transaction‑level data (order number, VAT rate, country of consumption, evidence) for 10 years; ensure export from marketplace/PSP systems.
Compliance hygiene & common mistakes (checklist)
- Forgetting that domestic sales from foreign warehouses are outside OSS → missing local VAT IDs.
- Applying home VAT after crossing EUR 10,000 → underpaid VAT in destination states.
- Using wrong VAT rates (catalogue not updated) → misstatements in VIU‑DO.
- Ignoring deemed supplier flows → double reporting with marketplaces.
- Missing intermediary for IOSS (non‑EU seller) → invalid IOSS use.
- Not keeping 10‑year records → audit risk, potential penalties.
Need help choosing between Union OSS, Non‑Union OSS and IOSS, or mapping your warehouse flows to the correct VAT settlements? Our team can review your store setup, marketplaces and logistics to design a compliant filing model and implement VIU‑R/VIU‑DO routines.