UK OSS — EU B2C distance selling after Brexit
How UK businesses register for the EU One-Stop-Shop (OSS) Non-Union scheme to sell digital and goods to EU consumers without registering in every member state.
Since Brexit (1 January 2021), UK businesses are no longer in the EU OSS Union scheme — they need to use the OSS Non-Union scheme for digital services to EU consumers, or the IOSS (Import One-Stop Shop) for low-value goods (under €150) shipped to EU consumers. The Non-Union scheme requires UK businesses to register for VAT in one EU member state of their choice (typically Ireland or the Netherlands for English-language administration), pay EU VAT at the consumer's country rate, and file quarterly OSS returns through that member state's portal. Without OSS, UK businesses would need to register for VAT in every EU member state where they have consumers — administratively prohibitive.
- OSS Non-Union: for UK businesses selling digital services to EU consumers (B2C).
- IOSS: for low-value goods (<€150) shipped to EU consumers — avoids customs VAT at delivery.
- Member state of identification (MOI): UK business picks one EU country to register through.
- VAT rate: charged at consumer's country rate (e.g. 19% Germany, 20% France, 21% NL/BE).
How it works
You determine if you need OSS. If you sell digital services (SaaS, e-books, streaming, online courses) to EU consumers (B2C), yes — OSS Non-Union scheme is the simplest path. If you sell physical goods to EU consumers above €150 per shipment, you need full VAT registration in destination countries (no IOSS for high-value). For B2B sales to EU businesses, no OSS — you invoice without VAT, the EU buyer reverse-charges.
You choose a Member State of Identification (MOI) for OSS registration. UK businesses typically pick Ireland (English-language, geographical proximity, established UK business community) or the Netherlands (also English-friendly, strong financial services ecosystem). The MOI is where you file your quarterly OSS return and pay the consolidated EU VAT — the MOI's tax authority distributes the VAT to the consumer's country.
You register via the chosen MOI's OSS portal — Ireland's Revenue OSS portal or the Netherlands' Belastingdienst OSS portal are the most-used. Registration is online, generally approved within 10 working days. You receive an OSS identification number used on all EU B2C sales.
For each EU B2C sale, you charge VAT at the consumer's country rate. A digital service to a German consumer = 19% German VAT. A digital service to a French consumer = 20% French VAT. The VAT rate database is maintained by the EU Commission — 4invoices does not apply EU rates automatically: you enter the VAT rate on each invoice line yourself, so look up the destination country's rate first.
Quarterly OSS return: you submit a single return through your MOI's portal summarising all EU B2C sales by member state. The MOI collects the total VAT from you and distributes it to each consumer country's tax authority. You don't deal directly with German, French, Italian, etc. tax authorities — the MOI is your single point of contact.
Legal references
- Council Directive 2006/112/EC, art. 369-369x — OSS Non-Union scheme.
- Withdrawal Agreement (UK-EU, 2019) — UK exit from OSS Union scheme.
- Council Directive 2017/2455 — IOSS for low-value goods.
- HMRC Notice 741A — UK businesses and post-Brexit EU VAT.
Frequently asked questions
Why pick Ireland over other EU countries for OSS?
Three reasons: English-language administration (no translation costs or language barriers for UK businesses), strong existing UK-Irish business links (UK businesses often already have Irish entities or advisers), and Irish Revenue's reputation for efficient, predictable administration. Other popular choices: Netherlands (also English-friendly, strong digital sector), Luxembourg (English/French, financial services hub). Pick based on language preference, existing professional advisor relationships, and any operational presence you have in EU.
Do I need to register in every EU country I sell to?
No — that's the whole point of OSS. You register once in your MOI, and you can sell to consumers in any of the 27 EU member states under that single registration. The MOI handles the cross-border VAT distribution. Without OSS, you would need 27 separate VAT registrations — administratively impossible for most small UK businesses selling to EU consumers.
What is IOSS for low-value goods?
IOSS (Import One-Stop Shop) applies to physical goods sold by UK businesses to EU consumers where the shipment value is €150 or less. Without IOSS, the EU consumer pays VAT at customs on delivery (annoying — surprise charges, delivery delays). With IOSS, you collect EU VAT at checkout, pay it via your IOSS MOI quarterly return, and the goods clear EU customs smoothly. IOSS requires a separate registration from OSS Non-Union — typically via the same MOI for convenience.
What if I only sell to UK consumers, no EU customers?
Then you don't need OSS at all. UK domestic VAT applies — standard 20% on most consumer sales, with the usual zero-rated food/books/clothes exceptions. You report on the standard UK VAT100 via MTD. OSS is only relevant if you actively sell to EU consumers, which post-Brexit requires explicit setup (it doesn't happen automatically).
Can I lose access to OSS for late filings?
Yes — repeated late filings or non-payment can result in exclusion from OSS, requiring you to register for VAT in every EU member state where you have consumers. This is much more administratively burdensome. Most EU member states apply a 'three strikes' policy: three consecutive late returns or three late payments within a 12-month period triggers exclusion. Once excluded, you must wait 2 years before reapplying.
Does 4invoices file OSS returns?
No. 4invoices does not file OSS or VAT returns and does not apply rates automatically. You can create invoices with a VAT rate per line, in any currency with an exchange rate, and download PDFs. Register and file through your chosen member state's portal or with an adviser.