OSS VAT: Selling Across the EU Without Registering in Every Country

You sell from Portugal and orders start arriving from Spain, France, Germany. The question always comes in the same order: which VAT do I charge? And right after: who do I pay it to?

The short answer: above a certain volume you charge the buyer's country rate and you pay it all through a single return filed in Portugal. That mechanism is the OSS, the One Stop Shop.

The €10,000 threshold

Since 1 July 2021 there is a single threshold for the whole European Union: €10,000 per calendar year, adding up all distance sales to consumers in all EU countries, plus electronic, telecommunications and broadcasting services.

• Below €10,000 you may keep charging Portuguese VAT to everyone, as though the sales were domestic. Simple, and perfectly legal.
• Above €10,000 you start charging the destination country rate, from the sale that crosses the threshold. Not the following year: that sale.

The threshold is aggregate, not per country. €4,000 to Spain plus €7,000 to France is €11,000 and the threshold is crossed, even though no single country came close.

You may opt to apply destination rates before reaching the threshold. For anyone selling mostly into countries with lower rates than Portugal it is worth weighing with your accountant. The option binds you for two calendar years.

What OSS solves, and what it does not

Under OSS the VAT rate is the buyer's country's, but it is filed in a single Portuguese return.

Without OSS, charging destination rates meant registering for VAT in every country you sold into. With OSS you register once in Portugal and file everything in one quarterly return; the tax authority distributes the VAT to each member state.

What does not go through OSS:

• Sales to businesses with a valid VAT number in another member state. That is reverse charge, not OSS.
• Sales outside the EU. Export, 0%, code M05.
• Domestic Portuguese sales. They go in the ordinary periodic return, as always.
• Sales shipped from another country, for example stock in a German warehouse. Those have their own rules and may well require local registration.

Registering: where and how

Registration is done on the Portal das Finanças, in the One Stop Shop (OSS) area, under the Union scheme. Once registered:

• You file a quarterly return, by the end of the month following the quarter.
• You pay the total in a single transfer, using the reference the return generates.
• You keep filing your ordinary periodic return for domestic sales.

The registration takes effect from the start of the following quarter, except for someone registering because they have just crossed the threshold: then it applies from the sale that crossed it, provided the registration is made by the 10th of the following month.

The standard rates across the 27

The rate you apply is the buyer's country rate for the product in question. These are the standard rates; many products carry their own reduced rates in each country, and those vary considerably.

| Country | Rate | Country | Rate | Country | Rate | |---|---|---|---|---|---| | Austria | 20% | Estonia | 24% | Latvia | 21% | | Belgium | 21% | Finland | 25.5% | Lithuania | 21% | | Bulgaria | 20% | France | 20% | Luxembourg | 17% | | Croatia | 25% | Germany | 19% | Malta | 18% | | Cyprus | 19% | Greece | 24% | Netherlands | 21% | | Czechia | 21% | Hungary | 27% | Poland | 23% | | Denmark | 25% | Ireland | 23% | Portugal | 23% | | Slovakia | 23% | Italy | 22% | Romania | 21% | | Slovenia | 22% | Spain | 21% | Sweden | 25% |

The invoice is still Portuguese

The point that confuses most people: applying Spanish VAT does not mean issuing a Spanish invoice.

The document still comes out of your Portuguese certified software, in your series filed with the tax authority, with ATCUD and QR Code, and it enters your SAF-T file. What changes is the rate applied on the line and, at quarter end, where that VAT is declared.

That is why a shop registered for OSS does not need a series per country: it needs software that can apply the right rate per line.

Madeira and the Azores are not OSS

A domestic case that gets confused with this one: a customer living in Madeira or the Azores is not an intra-EU distance sale. It is Portugal, at the regional rate (22% and 16% at the standard level). It does not go through OSS; it goes in the ordinary periodic return.

Common mistakes

• Counting the threshold per country. It is €10,000 added up, for the whole EU.
• Applying destination rates to businesses. If the buyer is a business with a valid VIES number, the sale is reverse charge at 0%, not OSS.
• Forgetting shipping. As a rule the carriage follows the rate of the goods carried: if the goods go at the Spanish rate, so does the shipping.
• Charging 23% to everyone after crossing the threshold. You are overcharging the customer and under-declaring to their country. Both sides are a problem.
• Registering for OSS and leaving the software on a single rate. The registration on its own changes not one invoice.

How Rioko helps

In Rioko, OSS is a registration you declare, not a rule you write. You switch it on once and from then on each sale is classified by the buyer's country and status: a consumer in the EU gets their country's rate, a business confirmed in VIES gets reverse charge at 0%, outside the EU gets export.

When the source has already calculated tax, and Shopify and Stripe Tax do, Rioko respects what the customer was charged and recalculates nothing: the document total has to match what the person actually paid. It only decides when the source decided nothing.

If you also sell to businesses, read Intra-EU reverse charge and VIES next. If you are still unsure which code goes on a zero-rated line, the table is in Exemption codes M01–M99.

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