OSS or local VAT registration: which do you actually need?
Most sellers ask this as an either/or question, and that is why the answer keeps confusing them. OSS and local VAT registrations are not two ways of doing the same thing. They are triggered by different events, and it is perfectly normal to need both — or to need one and be told, expensively and late, that you also needed the other.
The one distinction that settles most cases
OSS follows your sales. Local registration follows your stock.
The One Stop Shop exists so you can charge the destination country’s VAT on cross-border sales to consumers without registering in each of those countries. You file one quarterly return at home, pay one amount, and your own tax authority distributes it.
A local registration is what a country demands when your goods are physically present on its territory. Storing a pallet in a Czech warehouse creates a Czech obligation from the first item, whether you sell one unit or ten thousand. Turnover is irrelevant. OSS does nothing about it.
Hold those two sentences and the rest of this article is detail.
What OSS covers
- Goods sold to private consumers in other member states and shipped from your own country
- Telecommunications, broadcasting and electronic services supplied to consumers in other member states
That is the whole list. It is a lot for a typical small seller — often 100% of their cross-border activity — which is why OSS feels like a complete solution until the day it is not.
Below the EU-wide threshold of €10,000 a year you may skip all of this and keep charging your domestic rate. Above it, destination rates apply from the transaction that crosses the line.
What OSS does not cover
- Goods dispatched from a warehouse in another country. If your stock sits in Germany and ships to a German customer, that is a domestic German sale. It needs a German registration and a German return, not OSS.
- Movements of your own stock across borders. Sending your goods from your warehouse to one abroad is a reportable transaction in both countries.
- B2B sales. Those run on the reverse charge and sit outside OSS entirely.
- Input VAT. You cannot reclaim foreign VAT through an OSS return. That needs either a local registration or a refund claim under the EU refund procedure.
That last point catches people who pay significant local costs — warehousing, fulfilment, advertising invoiced with local VAT — and then discover the OSS return has no box for reclaiming it.
The decision, in order
- Do you store goods outside your own country? If yes, you need a local registration in each of those countries. This is not optional and no threshold protects you. Answer this first, because it overrides everything else.
- Are your cross-border consumer sales above €10,000 a year? If yes, destination rates apply. Register for OSS unless you enjoy filing in seven countries.
- Below the threshold? You may keep charging your domestic rate — but check whether that is actually in your favour. Sometimes it is not.
Step three is the one people skip. If you sell from a high-rate country into lower-rate ones, opting into OSS voluntarily before you reach the threshold puts money in your pocket on every order. A Polish seller at 23% shipping to Germany at 19% gains four points of net revenue at unchanged gross prices; to Luxembourg at 17%, six. It works in reverse for a Luxembourg seller shipping into Hungary.
What each option costs
OSS is free to register and free to run. You file one extra quarterly return. If your accountant charges for it at all, it is a small fixed fee.
A local registration costs a one-off setup, then a recurring compliance fee per country per month, in practice somewhere between €50 and €150 depending on the country and the provider. Some countries also require a fiscal representative for non-established businesses, which adds cost and sometimes a bank guarantee.
Multiply that by the number of countries a fulfilment programme has quietly moved your stock into and the arithmetic gets uncomfortable quickly. This is the real price of Pan-European FBA, and it never appears in the enrolment screen.
Where sellers get caught
Pan-European FBA. The programme redistributes your inventory to warehouses across several countries so that deliveries arrive faster. The faster delivery is real. So is a registration obligation in every country your stock lands in — often five or six. Sellers enrol for the conversion boost and find out about the rest a year later. The Amazon FBA calculator prices the fees; it does not price the compliance, and the compliance is often the larger number.
Third-party fulfilment abroad. Same mechanism, smaller scale. A 3PL warehouse in another member state is stock in another member state.
Assuming the threshold resets your obligations. Once you cross €10,000, destination rules bind you for the rest of that calendar year and the whole of the next one, even if sales fall back.
Deregistering too early. Leaving OSS does not erase liabilities for periods already covered, and re-entering has its own timing rules.
Run your own numbers
The OSS threshold calculator shows how much of the €10,000 you have used, roughly when you will cross it at your current rate, and what your VAT looks like before and after between any two member states — the rates it uses are the ones in the EU rate table. If you store stock in more than one country, tick that box and it will tell you plainly that the threshold does not apply to you.
None of this replaces an accountant who knows your setup. It does mean you can walk into that conversation knowing which of the two questions you are actually asking.
Frequently asked questions
Yes, and many sellers must. OSS handles your cross-border sales dispatched from home; local registrations handle sales dispatched from stock held in those countries. They cover different transactions and do not overlap.
No. An OSS return only declares VAT due. To recover input VAT you need either a local registration in that country or a claim under the EU VAT refund procedure.
For many cross-border consumer sales the marketplace is treated as the supplier and accounts for the VAT itself. That does not remove obligations arising from where your stock is held, and it does not cover sales you make through your own shop.
No. IOSS is the import scheme, for consignments of up to €150 sent to EU consumers from outside the EU — see import VAT under €150. OSS covers movements inside the EU. Different scheme, different registration.