OSS and MOSS in Estonia – a detailed overview

E-commerce and services are rapidly developing all over the world, including Estonia. In order to simplify the taxation of such transactions, the European Union (EU) introduced special mechanisms, such as the MOSS (Mini One Stop Shop) special procedure, which was later replaced by the OSS (One Stop Shop) special procedure.

In this article, we will consider what these special procedures are, their meaning and application features.

What is OSS?

The OSS (One Stop Shop) special procedure is a taxation system that allows companies providing electronic services and goods via the Internet to file VAT (value added tax) returns and pay taxes only in one EU country, even if they work with clients from different Union countries. This significantly simplifies the tax administration process for businesses.

Advantages of OSS:

• Simplification of reporting. Companies can file one declaration instead of several in each country where they operate.
• Saving time and resources. The number of administrative procedures related to taxation is reduced.
• Transparency. The system makes tax obligations more understandable and predictable.

On July 1, 2021, changes in the legislation of the European Union came into force, replacing the MOSS system with OSS. These changes were aimed at further simplifying tax accounting for companies operating in the field of e-commerce and the provision of e-services.

Difference OSS from MOSS

The main difference between the MOSS and OSS systems is that the latter covers not only e-services, but also the sale of goods via the Internet. Thus, OSS has become a universal tool for all types of e-commerce.

IOSS: An additional mechanism for importing goods

IOSS (Import One Stop Shop) is another important part of the e-commerce tax system. This mechanism is designed to facilitate the payment of VAT when importing goods into EU countries.

If a company sells goods worth up to 150 euros to customers in EU countries, it can use IOSS to pay value added tax in one country and then deliver the goods without tax checks at the border.

Features of IOSS:

• Ease of use. Sellers register in the IOSS system and receive a unique identification number.
• Applicable to small lots. The mechanism is especially useful for small lots of goods, where customs clearance costs can be significant.
• Automation of the process. Customs authorities automatically process information about the goods and collect VAT, which speeds up the delivery process.

We recommend using OSS and IOSS whenever possible.

In summary

The special procedures of OSS and IOSS are important tools for the development of e-commerce and services in Estonia and other EU countries. They allow businesses to simplify administrative procedures, reduce accounting costs and ensure tax transparency. The use of these mechanisms contributes to economic growth and increased competitiveness