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. OSS can be enabled in NetSuite OneWorld, as well as most UK and International edition accounts that are not OneWorld but have Advanced Taxes enabled. The OSS feature must be used together with the OSS tax codes, tax types, and tax control accounts provided by the International Tax Reports SuiteApp. Be sure to read Best Practices for OSS.

The EU One Stop Shop (OSS) feature in NetSuite enables you to charge the appropriate tax on B2C sales of physical goods and some services, including digital services, based on the VAT rate of the customer’s EU member state.

Under European Union (EU) taxation rules prior to January 2015, the sale of digital services to non-VAT registered EU customers was taxed at the VAT rate in the country where the seller’s business is established. Digital services include telecommunications, broadcasting, and electronically supplied services (e-services).

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
Deal with local tax authorities in each country the company is registered in

To simplify taxation, the EU introduced the Mini One Stop Shop (MOSS) scheme so that digital services suppliers do not have to register in every EU member state where they do business. With the MOSS scheme, businesses submit their MOSS tax returns to one tax agency only, in the country where they are 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 was set at a union-wide EUR 10,000 (net), replacing the previous regime of individual member state thresholds.

Under the OSS scheme, VAT-registered companies and individuals selling digital services to non-VAT registered customers in the EU do not 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 different OSS schemes—one for non-EU based business (non-Union scheme) and another for EU based businesses (Union scheme). Both are optional. However, when you register for OSS, you must use the scheme on all your sales of digital services to customers in EU countries.

OSS is only used to declare the output VAT on transactions. Input VAT (VAT charged by suppliers) must be recovered through the 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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