VAT OSS: what it is and how it works for Amazon sellers

What the OSS scheme is

The One Stop Shop (OSS) scheme is a mechanism introduced in the European Union in July 2021 with the e-commerce VAT package (Directive 2017/2455/EU). It allows B2C sellers who exceed the €10,000 annual threshold of intra-community sales to declare and pay VAT for all EU countries through a single portal — the one in their own country of tax residence.

Before OSS, any seller who exceeded a single country’s threshold had to register for VAT in that state, appoint a local fiscal representative and file periodic returns. A costly and bureaucratically heavy process, especially for those selling via Amazon Pan-European or the EFN (European Fulfillment Network) programme.

Why OSS is essential for Amazon sellers

Through the Pan-European FBA programme, Amazon automatically distributes stock across warehouses in Germany, France, Italy, Spain, Poland, Czechia and the Netherlands. Every time a product moves from one warehouse to another, or is sold to a consumer in a country different from where it’s stored, it generates a VAT movement that must be tracked and declared.

Without OSS, an Italian seller selling into Germany, France and Spain would have had to:

• Register for VAT in Germany (DE number), France (FR number) and Spain (ES number)
• File monthly or quarterly VAT returns in each country
• Pay VAT to each individual national tax authority
• Bear the cost of local accountants in every state

With OSS, all of this is consolidated into a single quarterly return filed with the Italian tax authority (or the tax authority of the seller’s country of establishment).

The €10,000 threshold

The single EU threshold of €10,000 per year applies to total intra-community B2C sales, i.e. sales to private consumers resident in EU countries other than the seller’s. It’s important to understand what this threshold includes and excludes:

Includes:

• Sales of physical goods to end consumers in other EU states
• Digital services (software, ebooks, streaming) supplied to private individuals in other EU states
• Sales through marketplaces such as Amazon, eBay, Etsy

Excludes:

• B2B sales (to VAT-registered businesses) — these follow the normal rules for intra-community transactions
• Sales in your own country of tax residence
• Non-EU sales (for which IOSS may apply)

Once the €10,000 threshold is crossed during the calendar year, the obligation kicks in immediately: from the first sale that exceeds the threshold, you must apply the VAT rate of the consumer’s destination country.

How OSS registration works in Italy

To register for the OSS scheme in Italy, you need to access the Agenzia delle Entrate portal (Fisconline/Entratel reserved area) and fill in the OSS registration form. Registration is possible at any time of the year; it takes effect from the quarter following registration (or from the same day if you register by the 10th day of the month following the threshold being crossed).

Data required for registration:

• Italian tax code/VAT number
• Personal or company details
• Confirmation that intra-community B2C sales exceed or will exceed the threshold
• Any warehouses in other EU states (relevant for Amazon Pan-European)

Returns and deadlines

OSS returns are quarterly and must be filed within the 30th day of the month following the end of each quarter:

Each return must report, for every EU country where you have B2C sales:

• The total taxable amount of sales (in euros)
• The VAT rate applied (that of the destination country)
• The VAT amount due

Payment happens at the same time as filing the return, via bank transfer to the Agenzia delle Entrate’s OSS-dedicated account.

VAT rates by country: watch the variety

One of the most complex aspects of managing OSS is correctly applying VAT rates. Every EU country has its own standard rate and reduced rates that vary by product category. For example:

• Germany: standard rate 19%, reduced 7% (food, books, medicines)
• France: standard rate 20%, reduced 5.5% (food) and 2.1% (reimbursable medicines)
• Italy: standard rate 22%, reduced 10% (some food, tourism) and 4% (essential goods)
• Hungary: standard rate 27% — the highest in the EU
• Luxembourg: standard rate 17% — the lowest in the EU
• Poland: standard rate 23%, reduced 8% and 5%
• Spain: standard rate 21%, reduced 10% and 4%

Applying the wrong rate to a single product category in a single country can create significant errors in your OSS return. With a broad catalogue and sales in 10+ countries, manual management quickly becomes unsustainable.

What happens in case of error or omission

The tax authority of the country of establishment (in Italy, the Agenzia delle Entrate) is responsible for the formal review of OSS returns. However, individual member states can carry out substantive checks on the data received through the VIES system and can ask the authority of the country of establishment to carry out specific audits.

In case of a late or incorrect return:

• Administrative penalties calculated according to the rules of the country of consumption
• Late-payment interest
• In the most serious cases, exclusion from the OSS scheme with an obligation to register directly in each country

It’s therefore essential to keep precise documentation of every transaction, retaining the original Amazon report files and the calculations performed.

How VATManager simplifies OSS management

VATManager was designed specifically to automate the OSS workflow for Amazon sellers. The process is simple:

1. Upload the VAT Transaction Report exported from Amazon Seller Central (CSV or TXT format)
2. VATManager reads every row of the report, identifies the consumer’s destination country and automatically applies the correct VAT rate
3. Transactions are aggregated by country and rate, producing the subtotals needed for the OSS return
4. The system generates a structured report ready to hand to your accountant or enter directly into the Agenzia delle Entrate’s OSS portal
5. An anomaly detection module flags any discrepancies in the data (e.g. transactions with an unjustified 0% rate, countries missing compared to previous periods)

The result is a drastic reduction in the time spent preparing OSS returns — from hours to minutes — with an almost negligible margin of error.

Frequently asked questions

Do I need to register for OSS even if I only sell on Amazon.it? No. If you sell exclusively to Italian consumers, there’s no OSS obligation. The obligation kicks in only with B2C sales to other EU countries that together exceed €10,000 in the calendar year.

Does Amazon handle VAT on my behalf? Partly. For sales where Amazon acts as deemed reseller (e.g. sales facilitated by Amazon), Amazon can collect and remit VAT directly. But for the seller’s direct sales (especially FBA), tax responsibility remains with the seller. Always check your agreement with Amazon and your Seller Central reports.

Can I use OSS for digital services too? Yes. The OSS scheme covers both physical goods (Union OSS) and digital services supplied to EU consumers (also Union OSS since 2021, after MOSS was merged into OSS).

What happens if I forget a quarterly return? The tax authority will send a reminder. If you don’t regularise the situation within the stated deadline, you risk exclusion from the OSS scheme for the current quarter and the following two quarters, with an obligation to register directly in each country.