Special VAT arrangements for e-commerce and services OSS and IOSS

3 min readJun 14, 2021

In the European Union (EU), fundamental reforms are being carried out with regard to VAT obligations on cross-border supplies of services, distance selling of goods, and e-commerce to a person not registered as a taxable person or a limited taxable person (hereinafter final consumer).

Amendments to the EU VAT Directive 2006/112 / EC have already been introduced with effect from 1 July 2021, by which time all Member States will have to change their VAT laws. The Riigikogu made the corresponding amendments to the Estonian VAT Act on 10 February and they were published in the Riigi Teataja on 23.02.2021. The changes aim to reduce VAT fraud and ensure a level playing field for EU companies compared to so-called third country (i.e. non-EU or non-EU) companies.


With the EU e-commerce VAT package coming into force on 1 July 2021:

  1. the current special tax regime for telecommunications, broadcasting and electronic services (hereinafter digital services) (MOSS) is extended to other services with a turnover in another Member State, as well as to intra-Community distance selling and, in some cases, to an online trading venue (hereinafter shop). The abbreviation for the extended special scheme is OSS (One Stop Shop).
  2. a new special arrangement for the distance selling of goods imported from a third country is introduced by the IOSS (Import One Stop Shop).

Distance selling (both intra-Community distance selling and distance selling of goods imported from outside the Community) is the cross-border sale of goods to the final consumer. Intra-Community distance selling is the transfer of goods within the EU in which the goods are delivered to the final consumer from the Member State in which the goods are located to another EU Member State. The distance selling of goods imported from a non-EU country is the transfer of goods from a non-EU country to the final consumer from a non-EU country to an EU Member State.

The use of both the OSS special scheme and the IOSS special scheme is optional, not mandatory. If the seller of the goods does not wish to benefit from the special scheme, he must register for VAT in the Member States where the final consumers are located (unless he uses the OSS special scheme) and…




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