In the era of globalization and booming online commerce, cross-border business relationships have become commonplace for many companies. In this context, the European Union introduced the One-Stop Shop (OSS) system, which facilitates VAT registration and reporting for firms engaged in cross-border activities within the EU. This article aims to provide a comprehensive overview of OSS, the timing of OSS registration, and the registration procedure for companies.

What is OSS (One-Stop Shop) for VAT

OSS, also known as the “Single Window” for VAT, is a system introduced by the European Union that allows companies to register and report VAT related to cross-border sales of goods and services in a simplified and centralized manner. This system facilitates tax compliance for businesses by reducing administrative barriers and costs associated with cross-border activities.

When does a company need to register for OSS

The obligation to register for OSS arises when a company makes sales of goods or services to other EU member states and meets certain criteria set by tax legislation. These criteria may vary depending on the country and the nature of the business activities conducted. Generally, companies that generate revenue from cross-border sales within the EU and wish to benefit from the simplifications offered by OSS should consider registering in this system.

The threshold that needs to be exceeded for OSS registration to be required is 10,000 euros, representing sales to non-taxable persons in other EU member states then the seller’s country of residence.

Procedure for registering a company in OSS

  1. Eligibility assessment: Before registering for OSS, the company needs to assess whether it meets the eligibility criteria set by the tax authorities. These criteria may include annual revenue levels, the type of goods or services provided, and cross-border transactions.
  2. Registration in OSS: The registration procedure for OSS may vary depending on the country, but generally involves completing a specific registration form, which can be submitted online or through the tax authorities. The company will need to provide information about its identity, activities, and other relevant details.
  3. Issuance of an OSS number: Once the registration has been successfully processed, the company will be assigned an OSS number, which will serve as a unique identifier for cross-border transactions. This number must be stated on invoices issued to customers in other EU member states.
  4. VAT reporting and payment: After registration, the company must report and pay VAT related to cross-border sales within OSS. This can be done through an OSS report, which needs to be submitted quarterly or monthly, depending on the firm’s chosen option and transaction volume.
  5. Compliance with tax rules: Companies registered in OSS must comply with the tax rules and requirements established by the member countries where they conduct business activities. It is important to maintain accurate records of transactions and adhere to the deadlines for filing returns and paying VAT.

The procedure for registering a company in OSS is described in the guide published by the ANAF (valid as of 05.07.2023) – click here.

How to declare and pay VAT through OSS

For the declaration and payment of VAT collected for intra-community trade through OSS (One Stop Shop), the tax form 398 is used, which can be downloaded and completed from the ANAF website, in the Declarations section.

The payment amounts resulting from this declaration are made into a special account of the Treasury established by ANAF, and the payments can only be made in Euro.

Conclusion

OSS represents an efficient solution for companies engaged in cross-border business within the EU, streamlining the VAT registration and reporting process. Through this system, firms can benefit from greater flexibility and reduced administrative burdens associated with cross-border transactions. However, it is crucial for companies to ensure compliance with the specific tax rules of each country where they operate and adhere to VAT reporting and payment deadlines.

Note: The text is valid as of its publication date, it is for informational purposes only, and represents an interpretation by the specialists at Cont Consulting. It is not intended to replace current legal provisions. We are not responsible for any damages caused by the use of this material for legal purposes or as evidence in any potential litigation.