One-Stop Shop (OSS) in Germany

Key Takeaways

• The One-Stop Shop (OSS) system in Germany simplifies VAT reporting for businesses engaged in cross-border sales within the EU.
• It eliminates the need to register for VAT in multiple EU countries by allowing businesses to file a single OSS VAT declaration.
• OSS is especially beneficial for small and medium-sized enterprises (SMEs) by reducing administrative burdens and streamlining compliance.

This is How You Do It

• Register for OSS on the BZSt Online Portal (BOP).
• Maintain accurate records of all cross-border sales within the EU. You need it to complete the OSS VAT return.
• File your OSS VAT Return quarterly.
• After submitting your OSS VAT return, pay the VAT amount owed.
• Get support from a tax advisor or use specialized OSS services to handle OSS VAT for you.

Table of Contents

Selling to customers across the European Union opens up a massive market for your German-based business. However, it also introduces complex VAT obligations.

Before 2021, selling goods or services to customers in different EU countries often meant you had to register for VAT in each country where you made sales. This created a huge administrative burden for small and medium-sized businesses.

To solve this, the EU introduced the One-Stop Shop (OSS) system.

What is the One-Stop Shop (OSS)?

The One-Stop Shop allows businesses selling goods and services to private consumers (B2C) in other EU states to handle their VAT obligations in one place. Instead of registering for VAT in every EU country you sell to, you can register for the OSS in your home country.

Through the OSS portal, you file a single quarterly OSS VAT return. In this return, you include your cross-border sales within the EU.

The German tax office then distributes the collected VAT to the respective EU countries where your customers are located. This simplifies administrative work for business owners.

Who Should Use the One-Stop Shop?

You should consider using the OSS if you are based in Germany and:

• You are an e-commerce seller shipping goods from Germany to private customers in other EU countries.
• You are a service provider whose services are taxed in the customer’s EU country. This includes telecommunications, broadcasting, and electronically supplied services (TBE), as well as other B2C services like consulting or event admissions.
• You operate an electronic interface (like a marketplace or platform) that facilitates the sale of goods.

The OSS applies once your total qualifying cross-border B2C sales exceed a threshold of 10,000€ per calendar year (as of 2026). Below this threshold, you can continue to apply German VAT rules.

Once you cross the threshold, you must either

• register for VAT in each country where you have customers or
• use the OSS to simplify the process.

How Does the OSS Process Work?

Using the OSS involves three main steps: registration, reporting, and payment. The entire process is managed online through the German Federal Central Tax Office (Bundeszentralamt für Steuern – BZSt).

1. Registration

You must register for the OSS scheme electronically via the BZSt Online Portal (BOP).

• Access the Portal: You can log in to the portal via three ways: Elster, Bund ID, and BZSt certificate. If you don’t have any of these accounts, you must create one before registering with OSS.
• Complete the Application: The registration form requires your business details, German VAT identification number (USt-IdNr.), and the date you intend to start using the scheme.
• Confirmation: Once your application is approved, the BZSt will confirm your participation and provide you with an individual OSS identification number.

2. Quarterly Reporting

Once registered in the OSS scheme, you must file a quarterly OSS VAT return electronically. The deadline for submission and payment is the last day of the month following the end of the reporting period (e.g., April 30 for the first quarter).

You must declare all your eligible B2C sales for each EU member state separately. You’ll need to list the total sales value and the applicable VAT rate for each country.

NOTE: You’ll continue to file your German VAT return as usual. OSS VAT return and German VAT return are two separate filings.

3. Single Payment

After submitting your OSS VAT return, you make a single payment for the total VAT amount due to the German tax authorities.

• Payment Reference: Each payment must include your unique reference number, which is provided when you submit your VAT return. This ensures the payment is correctly allocated.
• Distribution: The BZSt is responsible for forwarding the correct VAT amounts to the tax authorities in each of your customers’ home countries.

Benefits of Using the One-Stop Shop

• Single VAT Registration: Register once in Germany to cover B2C sales across all 27 EU member states.
• One VAT Return: File a single electronic return for all your cross-border EU sales instead of separate returns in each country.
• Single Payment: Make one payment in euros to the German tax authorities.
• Reduced Administrative Costs: Avoid the costs and complexity of hiring tax advisors and managing compliance in multiple countries and languages.
• Level Playing Field: The system ensures VAT is paid in the customer’s country, creating a fairer playing field for domestic and foreign sellers.

Limitations: When is OSS Not Applicable?

The OSS is a powerful tool, but it does not cover all transactions.

• B2B Sales: The OSS is only for sales to private consumers (B2C). Business-to-business (B2B) transactions continue to be handled through the reverse-charge mechanism.
• Domestic Sales: Your sales to customers within Germany are not reported through the OSS. They must still be declared in your regular German VAT return. This means you need to file two different VAT returns, one for OSS and another for Germany.
• Input VAT Reclaim: The OSS return is only for output VAT on cross‑border B2C sales. It doesn’t allow input VAT deduction. Input VAT on German expenses and on reverse‑charge intra‑EU purchases is reclaimed through your normal German VAT return.
• Non-EU Goods: The OSS covers goods shipped from within the EU. For goods shipped from outside the EU directly to customers, the Import One-Stop Shop (IOSS) is used instead.

Services and Tools to Help with OSS Compliance

Managing OSS can still be complex, especially when dealing with different VAT rates across the EU. Fortunately, there are services and tools available to help.

• Tax Advisors (Steuerberater): A qualified tax advisor can manage the entire OSS process for you, from registration to filing returns. This is the safest option to ensure full compliance.

English-speaking tax advisor in Germany ->

• Accounting Software: Many modern accounting software solutions (e.g., DATEV, Lexoffice, Sevdesk) have integrated OSS features. They can automatically track sales by country, apply the correct VAT rates, and generate the data needed for your OSS return.

Best accounting software in Germany ->

• Specialized VAT Compliance Services: Companies like Taxdoo, Hellotax, and Avalara offer automated solutions specifically designed for e-commerce and cross-border VAT compliance, including OSS reporting.
• Merchant of record: Some payment platforms, such as Paddle, FastSpring, etc., act as a Merchant of Record. In that model, the platform is the legal seller to your customer. It processes the payment, manages billing and subscriptions, calculates the correct VAT for each country, collects it from the customer, and remits the VAT to the appropriate local tax authorities on your behalf. This is the easiest way to ensure compliance and eliminate administrative work. Usually, SaaS companies go for this option.

Practical Examples of Businesses Using OSS

Example 1: Online Clothing Store

A Berlin-based online store sells handmade clothing to customers across the EU. Their total sales to France, Spain, and Italy exceed €10,000.

Instead of registering for VAT in all three countries, the owner registers for OSS in Germany. Each quarter, the owner files

• OSS VAT return detailing her sales and the VAT due for each country, and
• Local German VAT return

Example 2: Freelance App Developer

A freelance developer (Adam) in Munich sells a productivity app to private users in Poland, the Netherlands, and Sweden. Since these are digital services sold to B2C customers, he uses the OSS to report the VAT collected from these sales. This saves him from having to understand and comply with the national VAT laws of three different countries.

Frequently Asked Questions (FAQ)