This question refers to the EU’s IOSS (import one-stop shop) and OSS (one-stop shop) regulations, in effect from July 2021 onwards.
Scope of this FAQ (please read this first)
Firstly, here are a couple of important and overlapping points to understand:
- Our software documentation focuses on aspects to do with setting up our software. Software documentation complements, but does not remove the need for, reading tax documentation and understanding your own local tax rules. That is to say, to learn about the EU’s IOSS/OSS schemes, you should read their documentation about them, available here for OSS, and here for IOSS. It is not an aim of this plugin to provide shop-owners with a short-cut to understanding the tax systems that they operate under. You can also use your preferred search engine to easily find various other guides and answers to specific questions about these VAT regimes.
The EU’s documentation on cross-border selling and thresholds, here, is also relevant.
- Related to this, we do not provide tax consultancy or accountancy services. If you need help in understanding how these schemes apply to your particular business, then you need to find a tax consultant or accountant to assist you. We provide a specific software tool (plugin) for WooCommerce to allow you to implement the rules that apply to you, but cannot advise you as to which particular rules, tax rates, etc. do apply to your business.
This is to say: by all means, request help from us on how to implement the rules that you understand you need to implement if it is not clear to you in the plugin settings; but if you ask us for help in understanding your legal/taxation obligations, we will reply to advise you to find an accountant/tax advisor. If you need to register for one of the OSS/IOSS schemes, then you will need to do so; the plugin is not an end-to-end service: it will help you to quickly obtain the figures you need to report, but you must still actually submit those reports to the relevant authorities.
Along similar lines, we assume that you are familiar with core WooCommerce tax concepts, such as product tax classes and tax tables. If you are not, then you should use the official WooCommerce taxation documentation, available here. We are not attempting to provide general WooCommerce tutorials or information, since this is available already (and again, you can use your preferred search engine to find many other tutorials and guides if you find anything in the official WooCommerce documentation to be unclear).
Features of the plugin relevant to OSS/IOSS
Depending on what requirements you are obliged to adhere to under these schemes, you may find the following plugin or WooCommerce features relevant:
- VAT that varies according to the customer’s location
If you are selling goods that are subject to VAT that depends upon the customer’s location (i.e. the “place of supply” is that of the customer, not the shop), then these products should go in a separate WooCommerce tax class from other goods that are not subject to these rules. The tax table for that tax class should contain an entry for each destination country. Setting up tax classes and tax tables is covered in the core WooCommerce tax documentation; please see the section above (“Scope of this FAQ (please read this first”) for the link and other relevant information. The plugin adds a convenient button to WooCommerce tax table screens, allowing you to add all EU/UK rates at once (i.e. sparing you from adding them all one row at a time); if you did not need the UK you can then delete that row.
Remember also in the plugin settings to indicate which tax classes are subject to these “customer place of supply” rules (in WooCommerce -> VAT Compliance -> Settings -> WooCommerce VAT Settings):
- Quarterly reports of VAT due
When making your OSS/IOSS reports, you can use the figures in your WP dashboard, in WooCommerce -> VAT Compliance -> VAT Reports. This will show you a table sufficient to allow making of a report. If you have the Premium version, you can also make a CSV download of all relevant orders and manipulate it in your spreadsheet program for more sophisticated analytics.
Remember also to ensure that any currencies that you must use when making reports are configured in WooCommerce -> VAT Compliance -> Settings -> WooCommerce VAT Reporting Currencies, so that the plugin knows to record the relevant exchange rates (and potentially mention them on PDF invoices).
- Monitoring your approach to the EU’s €10,000 cross-border internal sales threshold, and changing tax rates upon hitting it
If these rules apply to you, then please see this FAQ/article: Please explain the “tax class translations” feature (cross-border threshold selling).
- VAT exemptions based on order value to specified destinations
Some countries (e.g. the EU, UK) have laws under which the buyer is liable to account for VAT if the purchase value exceeds a specified amount. i.e. The order itself should not have VAT added. You can configure this behaviour in WooCommerce -> VAT Compliance -> Settings -> WooCommerce VAT Settings:
Look also at the setting “Invoice footer text (VAT exempted)” if you must or desire to add particular information to PDF invoices in this situation.
- Other settings There are many and various other settings which are not unique to the OSS / IOSS schemes (e.g. reverse-charges based upon supply of a valid VAT number). In all circumstances, users of the plugin are recommended to review all their settings in the WooCommerce -> VAT Compliance -> Settings tab (all sections), to make sure that they have configured the plugin correctly, and are aware of how different features work (most settings either contain or are linked to relevant descriptions), and perhaps to learn of VAT-related concepts that they might not have been aware of.
Posted in: WooCommerce EU/UK VAT Compliance