EU OSS / IOSS use cases and setup guide

EU OSS / IOSS use cases and setup guide

OSS and IOSS stands for One-Stop Shop and Import One-Stop Shop. These are the official European Union online portals for registering and filing EU VAT.
 
In this guide, we'll review common scenarios for sellers with customers in the EU, and how Quaderno applies tax based on different options for setting up your preferences and jurisdictions. These are the default calculations for each setup, and you should always confirm with your accountant to see if a particular setup is applicable given your specific circumstances.
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Before getting started with this guide, it's important you determine where you're responsible for charging tax, based on where your customers are located and whether your sales are taxable or not. As we are not certified tax advisors or accountants, we always recommend reviewing this with your accountant or the local tax authorities.

1. Selling goods

First, what are considered "goods" ? It’s simple: any physical products.
 
For sales of physical products, Quaderno calculates tax based on where a product is shipped from and where it is shipped to.
 
🔖 Available tax classes for goods :
  • Standard rate – for any goods or services not included in the categories e-service, ebook, or SaaS with standard tax rates.
  • Reduced rate – for any goods or services not included in the categories e-service, ebook, or SaaS with reduced tax rates.

Non-EU businesses

Warehouse inside the EU

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Configuration setup:
  1. IF you select these defaults:
    1. Default tax class: standard rate or reduced rate
    2. Default product type: goods
  1. AND You add these jurisdictions based on your tax registration status:
    1. Always add European Union - VAT OSS / IOSS
    2. If you have warehouses and VAT numbers in more than one EU country, add each country as a separate jurisdiction in Quaderno, ticking the option: ✔️ "Permanent establishment".
  1. THEN Quaderno will apply tax based on where the product is shipped from and where it is shipped to.

Warehouse outside the EU

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Configuration setup:
  1. IF you select these defaults:
    1. Default tax class: standard rate or reduced rate
    2. Default product type: goods
  1. AND You add these jurisdictions based on your tax registration status:
    1. If you have warehouses and VAT numbers in more than one EU country, add each country as a separate jurisdiction in Quaderno, ticking the option: ✔️ "Permanent establishment".
  1. THEN Quaderno will apply tax based on where the product is shipped from and where it is shipped to.

EU businesses

Warehouse inside the EU

⚙️
Configuration setup:
  1. IF you select these defaults:
    1. Default tax class: standard rate or reduced rate
    2. Default product type: goods
  1. AND You add these jurisdictions based on your tax registration status:
    1. Always add European Union - VAT OSS / IOSS
    2. If you have warehouses and VAT numbers in more than one EU country, add each country as a separate jurisdiction in Quaderno, ticking the option: ✔️ "Permanent establishment".
  1. THEN Quaderno will apply tax based on where the product is shipped from and where it is shipped to.

Warehouse outside the EU

⚙️
Configuration setup:
  1. IF you select these defaults:
    1. Default tax class: standard rate or reduced rate
    2. Default product type: goods
  1. AND You add these jurisdictions based on your tax registration status:
    1. Always add European Union - VAT OSS / IOSS
    2. If you have warehouses and VAT numbers in more than one EU country, add each country as a separate jurisdiction in Quaderno, ticking the option: ✔️ "Registered in the import scheme".
  1. THEN Quaderno will apply tax based on where the product is shipped from and where it is shipped to.
 
🔎 Want to learn more? Check out our article How to handle sales tax for physical products around the world.

2. Selling digital products, ebooks, or SaaS

What is a digital product or e-Service? A digital good is any product that’s stored, delivered, and used in an electronic format. These products are also known as electronically supplied services. Check out the full definition here.
 
For e-Service, e-Book, and SaaS sales, Quaderno calculates tax based on your customer's location.
 
🔖 Available tax classes :

Non-EU businesses selling digital products in the EU

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Configuration setup:
  1. IF you select these defaults:
    1. Default tax class: eService ,e-Book, or SaaS
    2. Default product type: service
  1. AND You add these jurisdictions based on your tax registration status:
    1. Always add European Union - VAT OSS / IOSS
    2. The non-EU jurisdiction where your business is based, as well as any other jurisdiction where you are registered.
  1. THEN Quaderno will apply the EU VAT rate based on your customer's country.

EU businesses selling digital products in the EU

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Configuration setup:
  1. IF you select these defaults:
    1. Default tax class: eService ,e-Book, or SaaS
    2. Default product type: service
  1. AND You add these jurisdictions based on your tax registration status:
    1. Add European Union - VAT OSS / IOSS , except when 4. applies.
    2. The non-EU jurisdiction where your business is based, as well as any other jurisdiction where you are registered.
  1. THEN Quaderno will apply the EU VAT rate based on your customer's country.
  1. BUT in case you make less than 10000EUR in cross-border sales per year, you may be exempt from OSS registration. If you've determined this applies to you, you would not need to add the European Union - VAT OSS / IOSS jurisdiction in your Quaderno account.
 
🔎 Want to learn more? Check out our Ultimate Guide to EU VAT for Digital Taxes.

3. Selling non-digital services

What is considered non-digital service? Some examples may include live online courses, tickets for in-person events, one-on-one classes etc. We always recommend reviewing the specifics of your service with an accountant.
 
For non-digital services, Quaderno calculates tax based on your location.
 
🔖 Available tax classes for non-digital services :
  • Consulting – for consulting or other professional services, in cases where sales in your own jurisdiction are taxable but sales to other jurisdictions are not taxable.
  • Standard rate – for any goods or services not included in the categories e-service, ebook, or SaaS with standard tax rates.
  • Reduced rate – for any goods or services not included in the categories e-service, ebook, or SaaS with reduced tax rates.

EU businesses selling consulting services

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Configuration setup:
  1. IF you select these defaults:
    1. Default tax class: consulting
    2. Default product type: services
  1. AND You add the jurisdiction where your business is based.
  1. THEN Quaderno will apply your local tax rate on all sales in the EU (and no tax outside the EU).

Non-EU businesses selling consulting services

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Configuration setup:
  1. IF you select these defaults:
    1. Default tax class: consulting
    2. Default product type: services
  1. AND You add the jurisdiction where your business is based.
  1. THEN Quaderno will apply your local tax rate on sales in your jurisdiction (and no tax in any other jurisdiction, including EU).

All businesses selling standard or reduced rate services

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Configuration setup:
  1. IF you select these defaults:
    1. Default tax class: standard rate or reduced rate
    2. Default product type: services
  1. AND You add the jurisdiction where your business is based.
  1. THEN Quaderno will apply your local tax rate on all sales worldwide.

4. Selling multiple product types

If you're selling multiple product types (for example, physical goods and ebooks), please make sure that your sales platform or payment processor can distinguish tax classes for these products. Check out our page on for more information on this topic. In the case that your integration does not distinguish different tax classes for products, Quaderno will apply your account’s default product type. We'd recommend using any other integration able to distinguish tax classes for different products, like CheckoutJoy. Alternatively, you can make your own integration with our Transactions API.
 
🔎 Read more about configuring multiple product types here.