OSS Feature Overview

Important:

NetSuite supports the One Stop Shop (OSS) taxation scheme for the supply of physical goods and digital goods and services in the European Union (EU). If your company has an OSS registration, you can enable the OSS feature. You can enable OSS in NetSuite OneWorld and in most UK and International edition accounts that aren't OneWorld but have Advanced Taxes enabled. You need to use the OSS feature with the OSS tax codes, tax types, and tax control accounts from the International Tax Reports SuiteApp. Be sure to read Best Practices for OSS.

With the EU One Stop Shop (OSS) feature, you can charge the correct tax on B2C sales of physical goods and some services, including digital services, based on your customer's EU member state VAT rate.

Before January 2015, EU rules taxed digital services sold to non-VAT registered EU customers at the VAT rate of the seller’s country.

Under the local VAT registration scheme, a company must do the following in EU countries where they sell to or handle stock:

Maintain a VAT registration
Submit VAT returns according to the local rules of each country the company is registered in
Report in the currency of the countries the company is registered in
Work with local tax authorities in each country where the company is registered

To make taxes simpler, the EU introduced the Mini One Stop Shop (MOSS) scheme. This means digital service suppliers don't have to register in every EU member state where they do business. With the MOSS scheme, businesses submit their tax returns to only one agency, in the country where they're registered for MOSS.

As of July 1, 2021, the EU expanded the Mini One Stop Shop scheme to include physical goods and services as well as digital services such as downloads and subscriptions. The new scheme was named One Stop Shop (OSS). At the same time, the VAT threshold on online sales became a union-wide EUR 10,000 (net), replacing individual member state thresholds.

With the OSS scheme, VAT-registered companies and individuals selling digital services to non-VAT registered customers in the EU don't have to register for VAT in every EU member state where they do business.

Charging VAT according to the customer’s location is obligatory, but registration for OSS is optional for both EU based and non-EU based companies. A business can choose either an OSS registration or local VAT registrations.

There are two OSS schemes, one for non-EU businesses (non-Union scheme) and one for EU businesses (Union scheme). Both are optional. However, if you register for OSS, you need to use it for all your sales of digital service to customers in EU countries.

OSS is only used to declare the output VAT on transactions. You need to recover input VAT (VAT charged by suppliers) through standard local VAT returns.

For more information about OSS, refer to the European Commission Guide to the VAT One Stop Shop.

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