EU OSS Threshold Explained: When Do You Need to Register?

What Is the EU OSS?

The One Stop Shop (OSS) is an EU-wide VAT registration and reporting system that simplifies cross-border B2C (business-to-consumer) sales. Instead of registering for VAT in every EU country where you have customers, you register once in your home country and file a single quarterly return covering all your EU sales.

The OSS was introduced on July 1, 2021 as an expansion of the old Mini One Stop Shop (MOSS), which only covered digital services. The current OSS covers three categories:

• Union OSS: For EU-based businesses selling digital services, telecoms, broadcasting, and intra-EU distance sales of goods to consumers in other EU countries.
• Non-Union OSS: For non-EU businesses selling digital services to EU consumers.
• Import OSS (IOSS): For distance sales of imported goods with a value up to 150 EUR per consignment.

For most freelancers, SaaS founders, and Etsy/Gumroad sellers reading this, the Union OSS is the relevant one.

The 10,000 EUR Threshold: When OSS Becomes Mandatory

Here is the key rule: if your total cross-border B2C sales of digital services, telecoms, and broadcasting to consumers in other EU member states exceed 10,000 EUR per calendar year, you must either:

1. Register for VAT in each country where you sell — which is impractical for most small businesses, or
2. Register for the OSS scheme — the sensible option for anyone selling to consumers in multiple EU countries.

Below 10,000 EUR, you can continue charging your domestic VAT rate on all EU sales. Once you cross the threshold — even by a single euro — you must start charging the VAT rate of the customer’s country.

Important: The 10,000 EUR threshold is cumulative across all EU member states, not per country. If you sell 4,000 EUR to French consumers and 6,001 EUR to German consumers, you have crossed the threshold.

Use the OSS/IOSS Calculator to check whether your cross-border sales exceed the threshold.

What Counts Toward the Threshold?

Not all sales count toward the 10,000 EUR OSS threshold. Here is what does and does not count:

Counts toward the threshold:

• Digital services sold B2C to consumers in other EU countries (SaaS subscriptions, e-books, online courses, software downloads, digital templates)
• Telecoms and broadcasting services to EU consumers
• Intra-EU distance sales of goods (if you ship physical products to consumers in other EU countries)

Does NOT count:

• B2B sales (business-to-business) — these are handled via the reverse charge mechanism
• Sales to consumers in your own country
• Sales to consumers outside the EU
• Services that are not digital (consulting, freelance design work billed by the hour, etc.)

A common point of confusion: if you are a freelance web developer billing businesses for your time, those are B2B services and do not count toward OSS at all. OSS only applies when you sell to consumers (private individuals without a VAT number).

How to Register for OSS

Registration is done through your national tax authority’s online portal. The process varies by country, but the general steps are:

1. Log in to your tax authority’s portal. For example, in the Netherlands it is the Belastingdienst portal; in Germany, the BZSt (Bundeszentralamt für Steuern); in France, impots.gouv.fr.
2. Apply for OSS registration. You will need your VAT identification number, business details, and bank account information.
3. Wait for confirmation. Registration typically takes effect from the first day of the calendar quarter following your application. Some countries process it faster.
4. Start charging the customer’s country VAT rate on all qualifying cross-border B2C sales from the effective date.

You can also voluntarily register for OSS before you hit the 10,000 EUR threshold. This can simplify your compliance if you expect to cross it soon or if you prefer to charge local rates from the start.

Filing OSS Returns

Once registered, you file a quarterly OSS return through your home country’s tax portal. The deadlines are:

The return lists your sales by member state, the VAT rate applied, and the VAT amount due. You pay the total VAT in one payment to your home tax authority, which then distributes the amounts to each member state.

Late filing penalty: If you miss a deadline, your home country will send a reminder. If you still do not file, each member state where you owe VAT may issue its own penalty. This can quickly escalate, so set calendar reminders.

Even if you had zero qualifying sales in a quarter, you must still file a nil return.

Which VAT Rate to Charge

Under OSS, you charge the standard VAT rate of the customer’s country. For example:

• Customer in France: 20%
• Customer in Germany: 19%
• Customer in Hungary: 27%
• Customer in Luxembourg: 17%
• Customer in Romania: 21% (increased from 19% in 2026)

Some countries apply reduced rates to certain digital products (e.g., e-books may qualify for a reduced rate in some countries). Check the specific rules for your product type.

For a complete, up-to-date list of VAT rates across all 27 EU member states, see our EU VAT Rate Lookup.

IOSS: The Import One Stop Shop

If you sell physical goods imported from outside the EU directly to EU consumers, the Import One Stop Shop (IOSS) may apply. Key rules:

• IOSS covers consignments with an intrinsic value of up to 150 EUR.
• VAT is collected at the point of sale (not at the border), which means your customer does not pay import VAT on delivery.
• You charge the VAT rate of the customer’s country and report it through your monthly IOSS return.
• IOSS filing is monthly (not quarterly like OSS).

IOSS is mainly relevant for e-commerce businesses importing goods from China, the US, or other non-EU countries. If you only sell digital services, you do not need IOSS.

Common Mistakes With OSS

• Not tracking the threshold. Many small sellers cross 10,000 EUR without realizing it. If you sell on multiple platforms (Etsy, Gumroad, your own site), add up all cross-border B2C sales to check your total.
• Charging the wrong VAT rate. Under OSS, you must charge the customer’s country rate, not your own. Using your domestic rate after crossing the threshold means you are undercharging or overcharging VAT.
• Not determining the customer’s location correctly. The EU requires two non-contradictory pieces of evidence of the customer’s location (billing address, IP address, bank country, SIM card country). Most payment processors handle this for you, but you should verify.
• Confusing B2B and B2C. If your customer provides a valid VAT number, the sale is B2B and should use the reverse charge mechanism, not OSS. Always check VAT numbers via the EU VIES system.
• Forgetting to file nil returns. No sales in a quarter? You must still file. Missing a nil return can trigger penalties.

Real-World Example: A SaaS Founder in the Netherlands

Let’s walk through a practical scenario. Anna runs a small SaaS product from Amsterdam. She charges 15 EUR/month for her tool. In 2026, she has:

• 120 customers in the Netherlands (domestic — does not count toward OSS threshold)
• 40 business customers in other EU countries with VAT numbers (B2B — uses reverse charge, does not count)
• 65 individual customers in other EU countries without VAT numbers (B2C cross-border — this counts)

Her qualifying B2C cross-border revenue: 65 customers × 15 EUR × 12 months = 11,700 EUR. She crossed the 10,000 EUR threshold during the year.

Anna must register for OSS and start charging each customer’s local VAT rate. A German customer pays 19% VAT, a French customer pays 20%, a Hungarian customer pays 27%. She files one quarterly OSS return through the Dutch tax authority.

If Anna had tracked her threshold earlier using a tool like the OSS/IOSS Calculator, she could have registered proactively and avoided any retroactive compliance issues.

The EU SME VAT Exemption Scheme (New in 2025)

Starting January 1, 2025, the EU introduced a cross-border SME VAT exemption. If your total EU-wide turnover is below 100,000 EUR and your domestic turnover is below your country’s national VAT registration threshold, you may qualify for a VAT exemption even on cross-border sales.

This is separate from the OSS threshold. The SME exemption means you do not have to charge VAT at all (not even your domestic rate) if you qualify. However, you must register for the scheme in your home country, and you cannot reclaim input VAT.

The interaction between the OSS threshold and the SME exemption can be confusing. The general rule: if you are exempt under the SME scheme, the OSS threshold does not apply because you are not charging VAT in the first place. If you are not exempt (because your turnover exceeds the national threshold), then the OSS rules and the 10,000 EUR threshold apply as described above.

Check with your national tax authority to see if the SME scheme is available and beneficial for your situation.

Bottom Line

The OSS threshold is straightforward once you understand it: 10,000 EUR in cross-border B2C digital sales per year triggers the obligation to charge local VAT rates and file OSS returns. Below that, you charge your domestic rate. Above it, you charge the customer’s country rate.

The cost of non-compliance is real: back taxes, penalties from multiple member states, and the administrative nightmare of sorting it out retroactively. The cost of compliance is manageable: register once, file quarterly, charge the right rates.

Use the free OSS/IOSS Calculator to check your threshold status. Look up current rates with the EU VAT Rate Lookup. And when it is time to invoice, the Invoice Generator supports EU formatting with VAT fields and reverse charge notes out of the box.