EU One-Stop Shop (OSS)

When an Estonian company sells goods or electronic services to consumers in other EU countries, Estonian VAT only applies up to a point. Past the EU-wide threshold, or earlier if you opt in, VAT is due at the rate of each customer's country. The EU One-Stop Shop (OSS) lets you declare all of it on one quarterly return in e-MTA instead of registering for VAT in every country you sell to. This page covers recording an OSS registration in Arvello and invoicing under it.

When VAT moves to the customer's country

The threshold is EUR 10,000 a calendar year, counted across all EU countries together. It covers two kinds of sale to consumers (people and organisations without an EU VAT number) in other member states:

• goods you ship to them from Estonia, and
• telecom, broadcasting and electronically supplied services — software, streaming, online courses and the like.

Estonian VAT keeps applying while those sales stayed under the threshold in the previous calendar year and stay under it in the current one. From the sale that crosses it, VAT is due in the customer's country. Below the threshold you can opt in to charging the customer's country rate anyway; that choice binds for at least two calendar years.

Other services to consumers, such as consulting delivered from Estonia, generally keep Estonian VAT and don't count towards the threshold.

Goods sent to customers straight from outside the EU aren't part of this: they're covered by the separate EU import scheme (IOSS).

Keeping an eye on it

Once you've invoiced consumers in other EU countries, the dashboard shows an EU sales to consumers card: this year's total against the threshold, with last year's total beside it. It turns amber at 70%, orange at 90% and red once either year is over, and says what changes. The new-invoice form warns you too, when a sale to such a customer would take you over the threshold or you're already past it. Both disappear once you record an OSS registration.

The figure is an estimate. It counts every sale to a consumer in another EU country, from issued invoices, because a tax code can't tell goods and electronic services apart from other services. A credit note lowers the total of the year its VAT return (KMD) period falls in: a January credit note for a December sale lowers December's year while December's VAT return hasn't been submitted, and January's once it has. Treat it as an early warning, not the final count.

Recording your OSS registration

You apply for OSS in e-MTA. It needs a VAT registration: the scheme is declared under your Estonian VAT number. Once EMTA has confirmed it, record it in Settings → Company, in the EU One-Stop Shop (OSS) card:

Saving the registration adds 2110 OSS VAT payable and 1210 OSS VAT refund receivable to your chart of accounts, and 2120 IOSS VAT payable if that code is free. If one of your own accounts already uses 2110, Arvello says so; give that account another code and save again. (A return with refunds from other countries also needs 1210 free.)

The dates are a record of your registration, so Arvello won't let you change them in a way that would leave an OSS invoice you've already finalised, or a return you've approved or filed, outside them. Arvello keeps only one OSS registration: if you leave the scheme and join it again later, Arvello can't record the new registration yet while invoices or returns from the first would fall outside it, and dates spanning the gap would ask for returns for the quarters in between.

Invoicing EU consumers

While your registration is in force on the invoice date, four OSS tax codes join the tax code list:

When you pick a private individual in another EU country, or a business there with no VAT number (or one VIES reports as invalid), Arvello defaults their lines to the OSS standard-rate code for what you mainly sell, and fills in the Customer's country (EU OSS) field from the client's address. A business whose VAT number VIES hasn't confirmed yet keeps the Estonian default until it has. For goods, that's the country the delivery ends in; for services, the country the customer lives in. If they differ from the client's address, change the field. A business whose VAT number VIES has confirmed buys as a business, so Arvello refuses OSS codes on its invoices.

Each OSS line then shows the VAT rate it's charged at:

• Standard-rate codes use the country's standard rate on the invoice date, such as 19% for Germany.
• Reduced-rate codes ask you to pick one of the country's reduced rates. Which one applies depends on the product and the country's rules, so Arvello lists the rates in force and leaves the choice to you.
• Other rate takes a rate Arvello's table doesn't list. You tick a confirmation that you've checked it applies. The table comes from the European Commission's Taxes in Europe Database, which has gaps, so it can't be the final word.

Northern Ireland is in the OSS for goods only, so it can be chosen as the customer's country for goods codes but not services.

An invoice can mix OSS lines with Estonian ones, for example goods sent to a customer in Germany plus a service performed in Estonia. When every line uses an OSS code, the invoice prints a note explaining that VAT is charged at the rate of the customer's country.

How OSS invoices are booked

• The VAT on OSS lines goes to 2110 OSS VAT payable, not to 2100 VAT payable. It's owed through the OSS return, so it never appears on the KMD.
• An invoice whose lines are all OSS isn't on the KMD at all, so a filed KMD doesn't lock it. An invoice that mixes OSS and Estonian lines is still locked by a filed KMD, because its Estonian lines are on it.
• Estonian VAT on your own costs is still reclaimed on the KMD as usual.

The quarterly OSS return

Company Tax → OSS Returns lists every quarter of your registration. A return is due for each one, including a nil return for a quarter with no OSS sales, by the last day of the month after the quarter. The deadline stays put when it falls on a weekend or public holiday. Quarters from before Arvello started filing your returns show as Filed outside Arvello. Once a quarter's return is approved or filed in Arvello, the month Arvello starts filing can't be moved past it while your books cover that quarter; reopen an approved return first. Likewise, while a quarter's return is approved but not yet filed, where your books begin (set with your opening balances) can't move past that quarter: mark the return filed, or reopen it, first.

Open a quarter to see its return, computed from your issued invoices and credit notes:

• Sales by country and rate: one line per country, supply type (goods or services) and VAT rate, with the taxable amount and the VAT in euros.
• Corrections to earlier quarters: changes to quarters you've already approved, such as a credit note or a cancelled invoice, per quarter and country.
• Balance per country: this quarter's VAT plus its corrections. EMTA collects the positive balances. A negative balance isn't netted against other countries: that country's tax authority refunds it directly to the bank account on your OSS application.

Sales in another currency are converted at the European Central Bank rate for the quarter's last day, or for the next day a rate was published. Until that rate is out, the figures use the latest rate and the return can't be approved yet.

Filing straight to EMTA

Where direct filing has been enabled on your account, an approved return also shows File with EMTA. Arvello sends the return to EMTA over X-tee, Estonia's secure data-exchange layer, and asks EMTA to confirm it. Once EMTA confirms it, the return is filed and final, as if you'd uploaded and confirmed it in e-MTA. EMTA usually answers within minutes: Arvello checks by itself every 15 minutes, and Check status asks straight away. EMTA's answer is one of three:

• Filed: the return is marked as filed. EMTA's X-tee answer doesn't include the payment reference number, so copy it from e-MTA into the field on the return.
• Created but not confirmed: EMTA created the return in e-MTA but didn't confirm it, usually because of a warning. Its messages are on the return. Check the return in e-MTA and confirm it there. For 30 days after sending, Arvello keeps checking every 15 minutes and marks the return filed once it's confirmed; Check status checks at once, and you can also mark it as filed yourself.
• Not accepted: nothing was filed. Fix what EMTA reports and file again, or download the file and upload it in e-MTA.

If the connection fails while the return is being sent, or EMTA's answer can't be read, it isn't known whether EMTA received it. Give EMTA time to process it (it can take hours), then check e-MTA before filing again: Arvello asks you to confirm that you have, for that attempt.

While Arvello is waiting for EMTA's answer, the return can't be marked as filed by hand or reopened. If EMTA hasn't answered within 72 hours, check e-MTA: once you find the return there, mark it as filed. A return EMTA has taken can't be reopened. One it didn't accept can, and so can one whose outcome is unknown or that wasn't confirmed, once you confirm that e-MTA holds no filed or unconfirmed copy from that attempt. Arvello files directly only when your filing settings say Arvello files your VAT returns, and only for periods from when it started; otherwise the file upload is the way.

In Banking → Needs Attention, a refund from another country's tax authority is matched as a Tax refund of type OSS or IOSS VAT refund (a return's negative balance), which clears it from 1210. Payments to EMTA are recorded as tax payments, and those EMTA's account details identify are matched automatically: to 2110 when the payment carries the reference number you saved with a filed return, otherwise as a general tax payment. Until you save that reference, a payment of exactly what an approved or filed return has to pay waits for you instead (for up to 90 days after the return's due date, after which it's matched as a general tax payment); once you save it, a payment carrying the reference is matched to 2110. A payment isn't matched automatically when it carries the reference numbers of more than one return, or a reference saved on two returns by mistake: Arvello can't tell which return it pays. When you reconcile one by hand, you can mark it as paying The OSS VAT return, which books it against 2110.

A filed OSS return can't be changed. When something about a quarter you've already approved changes later (a credit note, a cancelled invoice, an invoice dated in that quarter), Arvello puts the difference into the next return's corrections, per quarter and country. Corrections can go back three years from the original return's deadline. After that, a change has to be corrected directly with that country's tax authority, and the return tells you so. The same applies once your OSS registration has ended and every return from the sale's quarter to its last has been approved: no return is left to carry the change, so Arvello won't finalise or cancel an invoice that would need one. If that last return hasn't been filed yet, reopen it first. Quarters filed outside Arvello are the exception: Arvello doesn't know what was declared for them, so a later change to one of them isn't added to any later return's corrections. If the change wasn't on the return filed for that quarter, it goes in the corrections part of the next return you file, and you enter it yourself in e-MTA: the file Arvello prepares leaves it out, and a return Arvello sends over X-tee is confirmed as it arrives.

Credit notes for OSS sales

A credit note for an OSS invoice keeps that sale's customer country and VAT rates: each OSS line can only credit a rate the invoice charged, and no more than is left of it. Its VAT comes off 2110. On the OSS return it counts in the sale's quarter: inside that quarter's own return while it hasn't been approved, or as a correction for that quarter in a later one. A credit note dated in the future counts from its own date: a return approved before then leaves it out, and a later one picks it up. A credit note for an OSS sale can be issued while your OSS registration is in force on its date; after the registration has ended, the correction has to be made directly with the tax authority of the customer's country.

Not available yet

• Recurring invoices made from an OSS invoice.
• Creating an OSS invoice from a bank payment during reconciliation. Create it under Sales → Invoices, then match the payment to it.