OSS Invoice – How to Issue and Account for It

Selling online to private customers in other European Union countries involves additional tax obligations. One of the most important issues for businesses using the One Stop Shop (OSS) procedure is the proper documentation of transactions and the correct settlement of VAT.

Although the OSS system significantly simplifies international VAT reporting, many businesses still have doubts regarding the issuance of sales documents. Common questions concern the correct VAT rate, the mandatory elements of the document, and whether input VAT can be deducted.

In this article, we explain what an OSS invoice is, when it should be issued, and how to correctly account for sales covered by the OSS procedure.

Key takeaways

• The OSS procedure allows businesses to report VAT due on sales to consumers in different EU countries through a single Member State.
• An OSS invoice should include the VAT rate applicable in the consumer’s country.
• In many cases, the law does not require an invoice to be issued for B2C sales reported under the OSS scheme.
• Input VAT cannot be deducted through the OSS return—deductible VAT must be claimed under domestic VAT rules.
• Businesses must maintain detailed records of transactions covered by the OSS procedure for a period of 10 years.

What is an OSS invoice and when is it required?

An OSS invoice is a sales document issued in connection with a transaction reported under the One Stop Shop (OSS)procedure. It most commonly applies to the sale of goods or services to consumers located in other European Union Member States.

The OSS system was introduced so that businesses do not have to register for VAT in every country where they sell goods or services. Instead of filing VAT returns in Germany, France, Spain, or the Czech Republic, the business reports and pays the tax through the Polish tax authorities.

For example, if a Polish online store sells products to a private customer in Germany, it should apply the German VAT rate. Such a transaction can be reported through the OSS scheme.

It is worth remembering that the obligation to issue an invoice depends on the regulations of the Member State of identification. For businesses using the OSS scheme in Poland, the Polish rules governing sales documentation apply.

Does every OSS transaction require an invoice?

No. In many cases, issuing an invoice is not mandatory.

Polish regulations do not require an invoice to be issued for distance sales to consumers in other EU Member States unless the customer specifically requests one. This means that the owner of an online store may document the sale using other accounting records and issue an invoice only at the customer’s request. This solution is particularly beneficial for businesses processing a large number of retail orders.

However, if the customer requests a sales document, the business must issue it in accordance with the applicable regulations.

What information should an OSS invoice include?

The required information is very similar to that of a standard VAT invoice.

The document should contain all the essential details identifying the seller, the buyer, and the subject of the transaction.

Typically, these include:

• invoice number;
• date of issue;
• date of sale;
• seller’s details;
• buyer’s details;
• description of the goods or services;
• net price;
• applicable VAT rate;
• VAT amount;
• gross amount.

The biggest difference is the application of the VAT rate applicable in the consumer’s country. If the customer lives in France, the French VAT rate applicable to the specific product must be used. If the customer is located in Germany, the German VAT rate must be applied.

How to determine the correct VAT rate for OSS sales?

This is one of the most important issues for businesses engaged in cross-border sales.

Once the annual EU distance sales (WSTO) threshold of EUR 10,000 has been exceeded, the business must apply the VAT rates in force in the consumer’s country.

For example:

• sales of cosmetics to Germany require the application of the German VAT rate;
• sales of products to France require the application of the French VAT rate;
• sales to the Czech Republic are subject to Czech VAT regulations.

Applying the wrong VAT rate may result in tax arrears and the need to submit corrections to OSS VAT returns.

Good to know

The European Commission provides the VAT Rates Database, which helps businesses verify the current VAT rates applicable in individual EU Member States.

OSS invoice template – what does a sample document look like?

There is no official invoice template created exclusively for the OSS procedure.

An OSS invoice template may look almost identical to a standard VAT invoice issued in Poland. The main difference concerns the VAT rate applied and the information resulting from the cross-border nature of the transaction. For example, a business selling a product for EUR 100 to a customer in Germany should indicate the applicable German VAT rate and calculate the gross amount accordingly.

Most accounting software includes dedicated features that allow businesses to issue invoices automatically for OSS sales.

How should sales documented with an OSS invoice be reported?

Sales covered by the OSS procedure are reported in the quarterly OSS VAT return.

The taxpayer does not report these transactions in the standard domestic VAT return as taxable domestic sales. Instead, the business reports the value of sales according to the Member State of consumption and the VAT rates applied. At the end of each quarter, the business submits an OSS return and pays the VAT due to the Second Tax Office Warsaw-Śródmieście, which then transfers the funds to the appropriate EU Member States.

This mechanism eliminates the need to register for VAT in every country where customers are located.

Should OSS sales be reported in the JPK_V7 file?

This is a common question among online store owners.

Sales reported through the OSS scheme are not included as ordinary taxable sales in the records section of the JPK_V7file. However, businesses are still required to maintain appropriate accounting records and supporting documentation for all transactions. As a result, the OSS return operates alongside the standard domestic VAT reporting system.

Pro tip

It is advisable to separate domestic sales from OSS transactions already at the stage of configuring your sales system. This makes subsequent reporting and the preparation of VAT returns much easier.