OSS VAT Scheme: Are You Selling Digital Products to the EU?
Do you sell online courses to both Czech and international customers? Do you offer e-books through your own website? Do you run a SaaS application with users across Europe? If so, you're likely required to remit VAT in your customer's country. That's exactly what the OSS – One Stop Shop scheme is designed for.
In this article, we'll walk you through how the OSS scheme works, when you need to register, what the thresholds are, how to file returns and pay VAT in practice — all with concrete examples for Czech entrepreneurs selling digital products and services.
OSS in a nutshell
OSS (One Stop Shop) is a system that allows EU businesses to remit VAT on cross-border sales from a single point — through the Czech tax authority. Instead of registering for VAT in every EU country where you have customers, you register for OSS in the Czech Republic and handle all VAT through the Czech Financial Administration portal.
Why OSS Was Created and Who It Affects
Historical background
Before 2015, VAT on electronic services was remitted in the supplier's country. From 2015 onward, the place of supply for electronic services provided to consumers shifted to the customer's country. This meant that a Czech seller of online courses theoretically had to remit VAT in every EU country where they had customers.
To spare businesses from registering for VAT in 26 additional countries, the MOSS (Mini One Stop Shop) scheme was introduced for electronic services. On 1 July 2021, this was expanded into OSS, which also covers the dispatch of goods.
Who OSS affects
The OSS scheme applies to three main groups of businesses:
1. Sellers of digital products and electronic services (B2C)
- Online courses and webinars
- E-books and audiobooks
- Software, SaaS applications, mobile apps
- Music and video streaming
- Templates, graphic assets, fonts
- Online consulting and advisory services (if automated)
- Hosting and cloud services
2. Online shops dispatching goods to consumers in the EU
- Physical products shipped from the Czech Republic to other EU countries
3. Providers of other B2C services with a place of supply in another EU country
- Telecommunications services
- Radio and television broadcasting
- Accommodation services, event admission (in specific cases)
OSS applies to B2C sales only
The OSS scheme applies exclusively to sales to consumers (B2C) — meaning individuals who are not VAT-registered. If you sell to businesses (B2B), the reverse charge mechanism applies and OSS is not used. It's therefore important to distinguish whether your customer is a business or a consumer.
The 10,000 EUR Threshold — When You Need to Handle VAT in the Customer's Country
How the threshold works
The key figure for OSS is 10,000 EUR per year. This limit is calculated as the total of all cross-border B2C sales (electronic services + goods dispatched) to all EU countries combined during a calendar year.
📊Below and above the 10,000 EUR threshold
| Situation | VAT treatment | Example | |---------|-----------|---------| | EU sales below 10,000 EUR/year | You apply Czech VAT (21%) | You sell online courses worth 8,000 EUR to various EU countries → you invoice with Czech VAT at 21% | | EU sales above 10,000 EUR/year | You must apply the VAT rate of the customer's country | You sell online courses worth 15,000 EUR → German customers are charged 19%, Slovak customers 20%, Polish customers 23%, etc. |
Key details about the threshold
- The 10,000 EUR limit is converted to CZK using the Czech National Bank exchange rate on 1 January of the relevant year (approximately 250,000 CZK)
- Only revenue excluding VAT counts
- All EU countries are counted together (not per country)
- The limit applies to both the current calendar year and the previous calendar year — if you exceeded it in the previous year, you must remit VAT in the customer's country in the current year as well
- Both electronic services and dispatched goods count toward the limit
Voluntary OSS registration
Even if you're below the 10,000 EUR threshold, you can register for OSS voluntarily. Why might this make sense? For example, if you sell to countries with a lower VAT rate than the Czech rate of 21%. Germany has 19%, Luxembourg 17%. In such cases, you would charge customers a lower VAT rate and be more price-competitive.
How to Register for OSS
Registration for OSS is done electronically through the Financial Administration portal. There are three variants of the OSS scheme — for Czech businesses, the EU scheme is the most relevant.
Three OSS variants
| Scheme | For whom | Description | |-------|----------|-------| | EU scheme | Businesses established in the EU | For B2C sales of services and dispatched goods within the EU | | Import scheme (IOSS) | Sellers of goods from third countries | For shipments from non-EU countries up to 150 EUR in value | | Non-EU scheme | Businesses established outside the EU | For providing services to consumers in the EU |
How to register for the EU scheme
📋Registering for OSS — EU scheme
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Log in to the MOJE daně portal using your data mailbox, bank identity, or eID card.
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Complete the registration form — in the EPO (Electronic Submissions) section, you'll find the OSS registration form. Enter your identification details, tax ID, contact information, and bank account.
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Submit your application — the tax authority will process it and grant you access to the OSS system.
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Registration takes effect from the first day of the calendar quarter following the submission of your application. For example, if you apply in February 2026, your registration will be valid from 1 April 2026.
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You'll receive confirmation — the tax authority will confirm your registration in the OSS scheme.
Registration is optional, but the obligations are not
Registering for the OSS scheme is optional — you can instead register for VAT in each country individually. However, the obligation to remit VAT in the customer's country (once you exceed the threshold) is not optional. If you exceed 10,000 EUR and register neither for OSS nor in the individual countries, you are breaking the law.
VAT Rates Across EU Countries
When selling through OSS, you must charge the VAT rate applicable in the customer's country. Here is an overview of standard VAT rates in selected EU countries (as of 2026):
| Country | Standard VAT rate | Country | Standard VAT rate | |------|-------------------|------|-------------------| | Luxembourg | 17% | Czech Republic | 21% | | Malta | 18% | Spain | 21% | | Germany | 19% | Latvia | 21% | | Cyprus | 19% | Belgium | 21% | | Romania | 19% | Netherlands | 21% | | Bulgaria | 20% | Lithuania | 21% | | France | 20% | Italy | 22% | | Austria | 20% | Poland | 23% | | Slovakia | 20% | Portugal | 23% | | Estonia | 22% | Ireland | 23% | | Greece | 24% | Finland | 25.5% | | Croatia | 25% | Denmark | 25% | | Sweden | 25% | Hungary | 27% |
Always verify current rates on the Financial Administration website
VAT rates in individual countries can change. The current overview of VAT rates in all EU member states is available on the Czech Financial Administration website. Some countries also have reduced rates for specific categories (for example, e-books are subject to a reduced rate in some countries).
How Filing Returns Under OSS Works
Tax period
Under the OSS scheme, the tax period is a calendar quarter:
- Q1: January – March
- Q2: April – June
- Q3: July – September
- Q4: October – December
Filing and payment deadlines
Your OSS VAT return must be filed by the end of the month following the end of the quarter. The payment deadline is the same.
| Quarter | Period | Filing and payment deadline | |-----------|--------|----------------------| | Q1 | January – March | 30 April | | Q2 | April – June | 31 July | | Q3 | July – September | 31 October | | Q4 | October – December | 31 January of the following year |
What the return includes
Your OSS VAT return must include:
- The value of supplies excluding VAT, broken down by individual member state
- The applicable VAT rate in each country
- The VAT amount to be remitted
- A breakdown between services and goods
The OSS return is separate — it does not replace your Czech VAT return
If you are a VAT payer in the Czech Republic, the OSS return is separate and does not replace your regular Czech VAT return. Supplies reported through OSS are not included in your Czech VAT return. These are two entirely separate systems.
How to pay the VAT
VAT from your OSS return is paid to a dedicated Financial Administration account in euros. Payment must be made by the same deadline as the return submission. The Czech Financial Administration then distributes the funds to the individual member states.
Practical Examples
Example 1: Online course seller
Situation: A Czech instructor sells online marketing courses through their own website. In Q1 2026, they sold:
- To Czech customers: 150,000 CZK (outside OSS — domestic supply)
- To Slovak customers: 2,000 EUR (approx. 50,000 CZK)
- To German customers: 3,500 EUR (approx. 87,500 CZK)
- To Polish customers: 1,200 EUR (approx. 30,000 CZK)
Total to EU (excluding Czech Republic): 6,700 EUR → below the 10,000 EUR threshold
If not registered for OSS: Czech VAT of 21% can be applied to all sales (including foreign B2C).
If voluntarily registered for OSS:
- SK customers: 2,000 EUR × 20% = 400 EUR VAT
- DE customers: 3,500 EUR × 19% = 665 EUR VAT
- PL customers: 1,200 EUR × 23% = 276 EUR VAT
- Total VAT through OSS: 1,341 EUR
Without OSS, foreign customers would pay Czech VAT at 21%:
- 6,700 EUR × 21% = 1,407 EUR
In this case, OSS would save 66 EUR in VAT (a price advantage for customers in Germany).
Example 2: SaaS application with subscriptions
Situation: A Czech developer runs a SaaS application priced at 29 EUR/month. They have 80 paying customers across various EU countries (outside the Czech Republic). Annual revenue from the EU: 80 × 29 × 12 = 27,840 EUR → above the 10,000 EUR threshold.
Obligation: VAT must be remitted in the customer's country. Registering for OSS is the simplest solution.
Quarterly return (Q1):
- Germany (25 customers): 25 × 29 × 3 = 2,175 EUR × 19% = 413.25 EUR
- Slovakia (15 customers): 15 × 29 × 3 = 1,305 EUR × 20% = 261 EUR
- Poland (10 customers): 10 × 29 × 3 = 870 EUR × 23% = 200.10 EUR
- Austria (8 customers): 8 × 29 × 3 = 696 EUR × 20% = 139.20 EUR
- Other EU countries (22 customers): calculated individually based on applicable rates
Without OSS, they would need to register for VAT in every country where they have customers — potentially dozens of countries. OSS reduces all of that administration to a single quarterly return.
Example 3: Selling e-books through your own website
Situation: A Czech author sells e-books through her own website at 299 CZK (approx. 12 EUR). In 2025, she sold:
- In the Czech Republic: 500 copies = 149,500 CZK
- To Slovakia: 80 copies = 960 EUR
- To Germany: 40 copies = 480 EUR
- To Poland: 30 copies = 360 EUR
- To other EU countries: 20 copies = 240 EUR
Total to EU: 2,040 EUR → below the 10,000 EUR threshold
The author does not need to deal with OSS or VAT in other countries. Czech VAT applies to all sales. However, if sales grow, she should keep an eye on when she's approaching the 10,000 EUR threshold.
How to Determine the Customer's Country
One of the practical challenges of the OSS scheme is correctly identifying the customer's country. For electronic services, the following rules apply under the EU implementing regulation:
Types of evidence for determining the country
You need at least two non-contradictory pieces of evidence of where the customer is located. Acceptable evidence includes:
- Customer's billing address
- IP address of the customer's device
- Bank details (country of the bank)
- SIM card / mobile country code
- Location of fixed landline
- Other commercially relevant information
Simplified rules for smaller sellers
If your cross-border sales do not exceed 100,000 EUR per year, just one piece of evidence of the customer's country is sufficient (typically the billing address). This simplification makes life considerably easier for smaller businesses. For Czech sellers of digital products, this is the most common scenario.
What Is and Isn't an Electronic Service
To apply OSS correctly, it's essential to understand what the law considers an electronic (digital) service.
📊Electronic services vs. non-electronic services
| Electronic service (subject to OSS rules) | Non-electronic service (not subject) | |----------------------------------------------|--------------------------------| | Online courses with no live interaction (pre-recorded video) | Live 1-on-1 consultations via Zoom | | E-books and digital publications | Printed books sent by post | | Downloadable software, SaaS | Custom software development | | Templates and downloadable graphics | Custom graphic design | | Web hosting and cloud services | IT consulting | | Music/video streaming | Live online concerts | | Automated online learning | Individual tutoring via video | | Mobile applications | – |
The key criterion: An electronic service is one delivered automatically via the internet, without any significant human involvement. If a service requires substantial human participation (individual consultations, bespoke work), it does not qualify as an electronic service for VAT purposes.
Obligations After Registering for OSS
📋What you need to do after registering for OSS
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Charge the correct VAT rate — for every sale to an EU customer, apply the VAT rate applicable in the customer's country.
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Track sales by country — keep records of all B2C sales broken down by individual EU member state.
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File quarterly returns — by the end of the month after each quarter, even if you had no sales in that quarter (you must submit a nil return).
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Pay VAT in euros — to the dedicated Financial Administration account, by the same deadline as the return.
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Retain records for 10 years — OSS transaction records must be kept for 10 years from the end of the year in which the supply took place.
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Monitor VAT rate changes — rates in individual countries can change. Make sure your system stays up to date.
Common Mistakes and Pitfalls
1. Forgetting to file a nil return
Even if you had no foreign B2C sales in a given quarter, you must still file a nil return. Failing to file three consecutive returns can result in being removed from the OSS scheme.
2. Confusing B2B and B2C
If a customer provides their VAT number, the transaction is B2B and the reverse charge mechanism applies — not OSS. Make sure your system correctly distinguishes between business and consumer customers.
3. Applying the wrong VAT rate
Each country has its own rates, and certain product categories may qualify for reduced rates. Always verify current rates on the Financial Administration website.
4. Late payment
VAT payments must be credited to the Financial Administration account by the deadline. Allow for transfer times, especially when paying in euros from a foreign account.
Frequently Asked Questions (FAQ)
Do I need to be a VAT payer to use OSS?
Not necessarily. An identified person — or even someone who has not previously been registered for VAT — can register for OSS. Registering for OSS does not automatically make you a VAT payer for domestic purposes. However, if your turnover exceeds 2 million CZK within 12 months, you are required to register for VAT regardless of OSS.
Can I withdraw from OSS?
Yes, you can leave the OSS scheme. You must notify the tax authority no later than 15 days before the end of the quarter from which you wish to withdraw. After leaving, you cannot re-enter OSS for 2 calendar quarters.
How do I handle credit notes and refunds in OSS?
Credit notes are reflected in the return for the quarter in which the credit note was issued. Reduce the relevant amount for the customer's country accordingly. If the resulting amount for a given country is negative, deduct it from the total VAT payable.
Do I report VAT on Czech sales through OSS?
No. Czech B2C sales are reported in your regular Czech VAT return, not through OSS. OSS is used exclusively for cross-border sales to other EU countries.
Can I deduct input VAT through OSS?
No. Input VAT deductions cannot be claimed within the OSS framework. You claim input VAT deductions in your regular Czech VAT return or by applying for a VAT refund in the relevant member state.
How do I account for OSS VAT in my bookkeeping?
VAT remitted through OSS is recorded as a liability to the state. In cash-basis accounting, it is treated as an expense that reduces your tax base (as it is a tax). We recommend consulting an accountant, as OSS records have their own specific requirements.
Handle VAT Simply with DokladBot
Finding it hard to keep track of VAT rates across EU countries? DokladBot can help you navigate the OSS rules. Message us on WhatsApp with details about what products you sell and where, and we'll advise you on whether OSS applies to you and what steps you need to take.
Message DokladBot on WhatsApp — an AI assistant that understands Czech taxes and is available whenever you need it.
Useful Links to Official Sources
- Czech Financial Administration – One Stop Shop (OSS)
- Czech Financial Administration – EU Scheme Registration (OSS)
- Czech Financial Administration – VAT Rates in the EU
- Czech Financial Administration – OSS Tax Return
- European Commission – VAT One Stop Shop
- MOJE daně Portal
This article is intended as a general informational guide and does not constitute binding legal or tax advice. VAT rules and the OSS scheme are complex and subject to change. For advice on your specific situation, we recommend consulting a tax advisor specialising in VAT. The information in this article is based on legislation in force as of February 2026.
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