Guide

EU OSS VAT for Shopify: The One-Stop-Shop Guide

Updated 2026-06-13

If you run a Shopify store and ship to consumers in more than one EU country, sooner or later you cross a line that changes how you charge VAT. Below a small threshold you keep charging your home-country rate. Above it, you are supposed to charge the rate of the country your customer lives in, and the One-Stop-Shop (OSS) is the system that lets you report all of that through a single return instead of registering for VAT in every country you sell to. This guide explains the threshold, how destination-country VAT works in practice, what the quarterly OSS return involves, and why business-to-business sales follow completely different rules.

A note before we start: Faktwise is invoicing software, not a tax advisor. The mechanics below are accurate, but your registration choices and filings should be confirmed with your accountant.

What the One-Stop-Shop actually is

The Union One-Stop-Shop is an EU VAT scheme for business-to-consumer (B2C) cross-border sales. It covers distance sales of goods shipped from one EU country to private individuals in another, plus certain services. Instead of registering for VAT in each member state where you have customers, you register once for OSS (normally in the country where your business is established), charge each customer the VAT rate of their own country, and file one combined OSS return that distributes the VAT to the right tax authorities.

The point is administrative relief. Without OSS, a German store selling to consumers in France, Italy and Spain would in principle need three foreign VAT registrations. With OSS, that becomes one extra return on top of the normal domestic one.

The EUR 10,000 threshold

OSS is built around a single EU-wide threshold of EUR 10,000 per calendar year. This figure is the combined total of your cross-border B2C distance sales of goods plus your cross-border telecommunications, broadcasting and electronic (TBE) services to consumers in other EU countries. It is one threshold for the whole EU, not a separate amount per country.

Two things about this threshold trip merchants up:

• It is cumulative across all countries. EUR 4,000 of sales to France plus EUR 4,000 to Italy plus EUR 3,000 to Spain is EUR 11,000, so you are over the line even though no single country looks large.
• There is no grace period. Destination-country VAT applies from the transaction that crosses EUR 10,000, not from the start of the next quarter or the next year. The sale that tips you over is the first one charged at the destination rate.

Below the threshold you stay on your home-country rules: you charge your own country’s VAT on those cross-border B2C sales and report them on your normal domestic return. You can also opt in to OSS voluntarily before reaching EUR 10,000, which can simplify things if you are clearly heading over it, but the choice binds you for two calendar years.

Charging destination-country VAT

Once you are in OSS, the rate you charge on a B2C sale is the standard (or applicable reduced) VAT rate of the customer’s country, not yours. A few reference points for the standard rates as of mid-2026:

• Germany 19 percent
• France 20 percent
• Italy 22 percent
• Spain 21 percent
• Netherlands 21 percent
• Ireland 23 percent

So the same EUR 50 product sold to a consumer in Germany carries EUR 9.50 of VAT, while sold to a consumer in Italy it carries EUR 11. Your net price stays the same; the VAT line changes with the destination. Reduced rates (for example on books or certain foods) vary by country and by product, which is one reason getting the rate right per order matters.

In Shopify, you configure this through the tax settings, where you enable OSS-style destination VAT for the EU and let Shopify apply the correct country rate at checkout. Shopify calculates and collects the VAT; it does not file your OSS return for you, and it does not produce a legally complete invoice showing the correct exemption wordings and sequential numbering. Those are separate jobs.

The quarterly OSS return

The Union OSS return is filed quarterly, through the OSS portal of the member state where you registered (your home tax authority for most established merchants). For each EU country you sold to during the quarter, you report the total taxable amount and the VAT due at each applicable rate, then pay the whole sum to your home authority, which forwards each country’s share.

Practical points that make filing smoother:

• The OSS return sits alongside your normal domestic VAT return, it does not replace it. Domestic sales and B2B transactions are reported the usual way; OSS only handles in-scope cross-border B2C.
• You report in your home filing currency, converting where needed using the European Central Bank rate for the last day of the quarter.
• Accurate records per destination country are what make the return painless. If your order data already tags each sale with the destination country and the VAT charged, the quarterly figures fall out of it. If it does not, you are reconstructing them by hand.

This is where clean invoicing pays off. Every OSS sale should still produce a proper invoice for the customer, with the destination VAT rate shown, even though an invoice is not always strictly required for B2C OSS sales when your home country is the member state of identification. Most customers expect one, and you want the figures recorded consistently for the return.

OSS versus B2B reverse charge: do not mix them up

This is the single most common confusion, so it is worth being blunt. OSS is for B2C. It does not apply to business customers. When you sell to a VAT-registered business in another EU country, OSS is the wrong mechanism entirely, and a different VAT treatment applies.

• B2C goods to a consumer abroad (in OSS): you charge the destination country’s VAT rate, collect it, and report it on the OSS return. The customer pays VAT to you.
• B2B goods to a VAT-registered business abroad: this is an intra-Community supply. With a valid VAT ID for the buyer (checked against the EU VIES system) it is zero-rated in your country, the invoice carries the exemption reference for an intra-Community supply (Art. 138 of Directive 2006/112/EC), and the buyer accounts for the VAT in their own country.
• B2B services subject to reverse charge: you issue the invoice at 0 percent with a “reverse charge” note, and the business customer accounts for the VAT themselves. Both parties’ VAT IDs go on the invoice.

The trigger that separates these worlds is whether the buyer is a consumer or a VAT-registered business, which is why capturing and validating a VAT ID at checkout matters so much. A valid, VIES-checked VAT ID moves the sale out of OSS and into the zero-rated B2B path; no valid VAT ID keeps it as a B2C sale under OSS at the destination rate. For the full mechanics of the business side, see our guide on reverse charge and intra-EU sales on Shopify.

How this fits with e-invoicing

OSS is a VAT reporting scheme; it is separate from the structured e-invoicing mandates rolling out in Germany and France. They interact, though: a German-established merchant deals with domestic German VAT and the German e-invoicing rules at home, with intra-EU B2B treatment for business customers in other EU countries, and with OSS for B2C distance sales above the threshold. One store can touch all three. If you sell into Germany, the companion piece is our Shopify e-invoicing in Germany guide.

FAQ

Does OSS apply to sales within my own country?

No. OSS only covers cross-border B2C sales to consumers in other EU countries. Domestic sales stay on your normal domestic VAT return at your home rate.

Is the EUR 10,000 threshold per country or for the whole EU?

For the whole EU. It is the combined total of your cross-border B2C distance sales of goods and TBE services across all other EU countries in the calendar year. Cross it on the combined figure and destination VAT applies from that transaction onward.

Do I have to use OSS once I cross the threshold?

You must charge destination-country VAT once you are over EUR 10,000. OSS is the simplified way to report it through one return. The alternative is registering for VAT in each country you sell to, which is what OSS is designed to spare you.

How often do I file an OSS return?

Quarterly, through the OSS portal of the member state where you registered. It is filed alongside, not instead of, your normal domestic VAT return.

Does OSS cover sales to businesses?

No. OSS is strictly B2C. B2B sales to VAT-registered businesses in other EU countries follow intra-Community supply or reverse-charge rules, where the supply is zero-rated and the buyer accounts for the VAT. See the reverse charge guide.

If you would rather have the VAT treatment decided automatically per order, Faktwise is a Shopify app that generates a correct invoice on every paid order: destination-country VAT for B2C OSS sales, zero-rated intra-Community supplies and reverse charge for B2B customers with a VIES-validated VAT ID, plain domestic VAT at home, each with the right wording and sequential numbering. It is EU-hosted (Paris), free for up to 5 invoices a month, then a flat EUR 19/month. Faktwise records the destination and VAT on every sale so your quarterly OSS figures are already there, but it is software, not tax advice, so confirm your registration and filings with your accountant. You can see the current plan on the pricing page.