In this article, you'll read how to set up the OSS scheme (One Stop Shop) in Plug&Pay. The OSS scheme is a European VAT scheme for e-commerce in which you calculate VAT based on the customer's country. You'll go through the steps for creating VAT profiles, linking profiles to products and activating the settings.
Requirements for the OSS scheme
The OSS scheme applies if you sell products or digital services to private individuals within the EU and you exceed the revenue threshold of €10,000. In that case, you're required to charge VAT based on the customer's country instead of the country in which your business is established.
In practical terms: if your shop is based in the Netherlands and a Belgian customer pays, the Belgian VAT rate is applied. Via the OSS feature, Plug&Pay determines the VAT rate automatically based on the customer's location. There isn't a fixed rate per product.
ℹ️ Important nuances around the €10,000 threshold:
Combined over 2 years: the threshold is calculated over the current and the preceding calendar year. If you're above €10,000 in either year, the OSS scheme applies.
Combined revenue: the threshold is the sum of your cross-border revenue from digital services (TBE) and distance sales of goods to consumers in other EU countries. These revenue streams are counted together, not separately per category or per country.
Single establishment: the threshold only applies if your business is established in one EU Member State. If you have fixed establishments in multiple EU countries, the threshold doesn't apply and you charge VAT according to the customer's country from the very first euro.
Whether you're above the revenue threshold is something you have to check yourself, as this isn't visible in Plug&Pay. Consult your countries tax office or the European Commission for more information about the scheme in your situation, or contact a financial adviser.
Is OSS the only option?
No. The OSS scheme isn't the only way to meet your VAT obligations. As an alternative, you can register for VAT in every EU Member State in which you sell and file separate VAT returns there. For most entrepreneurs, OSS is simpler because you handle everything centrally via one return.
❗ All or nothing: if you opt for the OSS scheme, you must declare all supplies that fall under the scheme via OSS, in every EU country where you sell. So you can't use OSS for some countries and not for others.
Setting up the OSS scheme
To set up the OSS scheme, navigate to Settings > VAT & Union scheme.
Click the Set up button next to VAT rules for e-commerce in the EU.
OSS scheme: Introduction
In the first step of the pop-up, you'll find an explanation of exactly what the OSS scheme entails.
Click Next to continue to the next step.
OSS scheme: VAT profiles
In Plug&Pay, you work with VAT profiles to calculate VAT correctly. By default, the Standard VAT-high profile has already been created, including the corresponding rates per country. This profile is sufficient for most products. You can also create a new profile yourself. In the next step, you link your profile(s) to your products.
To create a VAT profile yourself, click New profile, give the profile a name and choose Save. You can then choose a VAT profile per country. Countries you don't fill in the VAT profile will automatically have the country's default rate applied on a sale. Click Save profile to save your profile.
Choose Next to continue to the third step.
OSS scheme: Products
Within the Products step, you link your VAT profile(s) to your products.
⚠️ Important: Take the following into account when linking your VAT profiles.
A selected VAT profile also applies to existing subscriptions. These adjust automatically and you don't have to change them manually.
Products set up including VAT keep the same sales price everywhere. A product of €10 incl. VAT costs €10 in both the Netherlands and Germany; only the VAT rate differs.
Products set up excluding VAT have the local VAT rate added on top of the price. The total price therefore differs per country.
After linking your profiles, click the Next button to go to the final step.
OSS scheme: Effective date
Specify the date on which the settings should become active. This way, you can set everything up in advance and have the settings take effect automatically at a later moment.
Click 'Activate' to save your settings and activate the OSS scheme from the configured date.
Adjusting the OSS scheme
After setting up your OSS scheme, you can still make changes. To do so, navigate to Settings > VAT & Union scheme, then click Adjust settings.
