If your Cyprus company sells online to private customers in other EU countries, you may have to charge VAT at each customer’s local rate. The One-Stop Shop (OSS) exists so you don’t have to register for VAT in every one of those countries. Here is how it works.
What OSS is
OSS is an EU system that lets a business declare and pay the VAT due on its cross-border sales to consumers across the EU through one quarterly return filed in its home country. For a Cyprus company, that return is filed with the Cyprus Tax Department, which passes the VAT on to the other countries.
Who needs it
- E-commerce businesses shipping goods to consumers in other EU countries.
- Sellers of digital services such as software, apps, online courses or streaming to consumers.
- Other services to EU consumers that are taxed where the customer is.
OSS does not apply to sales to VAT-registered businesses. Those normally use the reverse charge and are reported through VIES.
The €10,000 threshold
Add up all your cross-border sales of goods and these services to private customers in other EU countries. While the total stays under €10,000 a year, you can usually charge Cyprus VAT. Once it goes over, VAT is due at the rate of each customer’s country, and OSS is the simplest way to handle that. You can also choose to use OSS before reaching the threshold.
The OSS schemes
- Union scheme: for EU businesses selling goods or services to consumers in other EU countries. This is the one most Cyprus companies use.
- Non-Union scheme: for businesses outside the EU selling services to EU consumers.
- Import scheme (IOSS): for goods worth up to €150 shipped to EU consumers from outside the EU.
How it works in practice
- Register for OSS through your Cyprus VAT registration.
- Charge the right rate on each sale, based on the customer’s country.
- Keep records of each sale, the customer’s country and the VAT charged.
- File one OSS return every quarter, by the end of the month after the quarter, listing sales per country.
- Pay the total VAT in one payment to the Cyprus Tax Department.
Benefits of using OSS
- No need to register for VAT in each EU country where you have customers.
- One return and one payment each quarter.
- Dealing with your own tax authority, in your own language.
Selling online to customers across the EU? We check whether OSS applies and handle your OSS registration and returns for a fixed fee. Not VAT-registered yet? Start with our guide Do I need VAT registration in Cyprus?
Frequently asked questions
What is the OSS threshold?
The threshold is €10,000 a year, counted across all your cross-border sales of goods and certain services to private customers in other EU countries. Above it, VAT is due at the rate of each customer's country.
How often are OSS returns filed?
Under the Union OSS scheme, returns are filed every quarter, by the end of the month after the quarter ends, and the VAT is paid in one payment.
Does OSS apply to sales to businesses?
No. OSS covers sales to private consumers. Sales to VAT-registered businesses in other EU countries usually fall under the reverse charge and are reported through VIES.
Do I need a Cyprus VAT number to use OSS?
A Cyprus-established business normally registers for OSS through its Cyprus VAT registration with the Tax Department.