The Union scheme of the One Stop Shop

Past the €10,000 threshold, a shop in Lille shipping to consumers in eight Member States would, left to itself, need a VAT registration in each of them. The One Stop Shop replaces those registrations with one quarterly return filed at home, on one condition: every sale the scheme covers goes through it.

Three schemes, one of them for EU sellers

Since July 2021 the One Stop Shop has covered three special schemes: the non-Union scheme, the Union scheme and the import scheme. They let a business declare and pay VAT due in Member States where it is not established, through a web portal in the one Member State where it is identified.

A seller established in the EU has access to two of them. The Union scheme takes its intra-Community distance sales of goods; the import scheme takes certain sales of goods shipped from outside the EU, covered in the third module. The non-Union scheme serves businesses established outside the EU.

The scheme is optional, but it is not à la carte. A seller who joins must declare in it every supply the scheme covers, in all the Member States concerned. Using it for customers in Germany while registering locally for customers in Italy is not possible.

Registering in your own Member State

For the Union scheme, no new number is issued. The seller is identified with the national VAT number it already uses for its domestic obligations, and that number must be valid when it registers. A business that has no VAT number yet has to obtain one first.

A small business under its country's special scheme for small enterprises is not shut out. The Commission states that it can register for the Union scheme without giving up that scheme, provided it holds a national VAT identification number from the Member State where it is established.

In the ordinary case, registration takes effect on the first day of the calendar quarter after the one in which the seller tells its Member State of identification that it wishes to use the scheme. A request made in February therefore opens the scheme for supplies made from April.

A seller whose first sale comes before that date is not left stranded. It can apply the scheme from that first supply if it informs its Member State of identification early in the following month, within the deadline the rules set. Missing that deadline means registering directly in each Member State of consumption.

One quarterly return, one payment

Under the Union scheme the tax period is the calendar quarter. The return is filed electronically with the Member State of identification by the end of the month that follows the quarter, and a nil return is still due for a quarter without a single sale.

For each Member State of consumption, the return gives the taxable amounts and the VAT at standard and at reduced rates. The rates are not set out in the scheme's rules: the Commission refers sellers to its Taxes in Europe Database for the rates in force in each country.

The OSS return sits beside the domestic return and never replaces it. Nor can VAT paid on expenses in a Member State of consumption be deducted in it: that VAT is reclaimed through the electronic refund procedure, or through a domestic return where the seller is registered in that country.

Payment goes in a single amount to the Member State of identification, quoting the unique reference number of the return, at the latest by the return deadline. That Member State then passes each share on to the Member State of consumption concerned.

A negative balance for one country, after a correction, never reduces what is owed to another. The overpaid Member State of consumption reimburses the seller directly, while the shares due elsewhere are paid in full.

Registration and filing happen on each country's own portal. The French and German fiches below walk through the steps with the French tax administration and with the Federal Central Tax Office.