This article provides an overview of the One Stop Shop VAT (OSS VAT) regulation in the EU, who it applies to, and what you need to do to comply. It is especially relevant for companies selling B2C across EU borders and reaching the OSS threshold. The article outlines what steps to take before and after 1st July 2021, how to configure VAT rates in your systems, and who is responsible for each task.

What is OSS VAT?

From 1st July 2021, the One Stop Shop VAT regulation requires that if your total B2C sales across EU countries (excluding your home country and countries where you are VAT registered) exceed €10,000 per year, you must apply local VAT rates in the buyer's country — not your domestic rate.

Key rules

• Applies only to B2C (not B2B).

• Below the €10,000 threshold? Continue using your local VAT rate.

• Above the threshold? Use the local VAT rate for each EU country you sell B2C to.

Example:

If you are based in Denmark and sell:

• €7,000 to Germany

• €3,000 to Spain

• €2,000 to the Netherlands

Then your total is €12,000 (excluding Denmark), so OSS VAT rules apply. You must use:

• 19% VAT for Germany

• 21% VAT for Spain

• 21% VAT for Netherlands

If you are already VAT registered in Germany, then Germany is excluded from your threshold calculation.

What to do if OSS VAT applies

There are 3 main steps to follow:

Step 1: Change B2C VAT rates in your store

On 1st July, update your B2C platform (e.g. Shopify, WooCommerce) to apply local VAT rates per country.

Important:

• Do not change VAT rates before 1st July.

• All B2C orders before 1st July should still use your home VAT rate (e.g. 25%).

Platform-specific notes:

• WooCommerce + Webshipper:
  You must set custom shipping rates per country, each with the correct local VAT rate.

• Shopify + Webshipper:
  Shopify automatically calculates the correct VAT rates for shipping — no need to configure them separately in Webshipper.

Step 2: Set up VAT codes and revenue accounts in your accounting system

You must set up one VAT code and one revenue account per EU country you sell to. This is needed for correct invoice syncing and reporting.

Example setup in e-conomic:

• Germany

  • Revenue account: 1025

  • VAT code: DE19

• Spain

  • Revenue account: 1026

  • VAT code: ES21

You are responsible for creating these in your accounting system. Contact your bookkeeper or accountant for help with this.

Step 3: TRAEDE automation from July 1st

TRAEDE will automatically apply your new VAT codes and revenue accounts from 1st July — but only for B2C orders.

You must:

• Inform TRAEDE of the new VAT codes and accounts

• Set them up correctly in your B2C platform and accounting system

Who does what?

This setup ensures your business is compliant with OSS VAT rules and that your B2C orders are correctly invoiced based on destination country VAT rates.