EU VAT has three single-window schemes that look interchangeable but aren't: Union OSS (for EU-established sellers of services), Non-Union OSS (for sellers outside the EU), and IOSS (for imported goods under €150). For US AI companies, the relevant one is Non-Union OSS. MOSS, the original 2015 mini one-stop shop, was folded into OSS in July 2021 and is no longer a separate scheme. Filing is quarterly, in your "member state of identification" (most pick Ireland or the Netherlands).
The hardest part of EU VAT is not the rates. It's knowing which scheme you're supposed to file under. Every founder we've onboarded confuses OSS with MOSS at least once, and usually IOSS with both. This essay is the cheat sheet.
The three schemes at a glance
| Scheme | Who uses it | What it covers | Threshold |
|---|---|---|---|
| Union OSS | EU-established sellers | Cross-border B2C supplies of goods and services within EU | €10,000 (total intra-EU) |
| Non-Union OSS | Sellers outside the EU (US, UK post-Brexit, AU, etc.) | B2C supplies of digital services to EU consumers | €0 (first sale) |
| IOSS | Sellers of imported goods ≤ €150 | Distance sales of imported goods to EU consumers | €0; only goods, not services |
For an AI inference / SaaS company headquartered in the US, the answer is almost always Non-Union OSS. Let's walk through each in turn.
Union OSS — for sellers established in the EU
If your company is incorporated in an EU member state (say, Estonia, Ireland, or Cyprus), you use Union OSS. The mechanics:
- Register in your home member state — that becomes your "member state of identification."
- Charge the buyer's VAT rate on cross-border B2C supplies into other member states.
- File a single quarterly OSS return covering all member states of consumption.
- Pay the total VAT to your home tax authority. They redistribute to the other member states.
- Threshold of €10,000 across all cross-border supplies — below that, you can choose to charge your home rate instead.
Union OSS is the cleanest of the three schemes because the seller is already in the EU. Domestic-only sales (selling within your home country) are filed separately on your regular domestic VAT return, not via OSS.
Non-Union OSS — for everyone outside the EU (probably you)
For US, UK, Australian, Indian, Singaporean — anyone outside the EU — selling digital services to EU consumers, Non-Union OSS is the scheme. The mechanics:
- Pick a "member state of identification." Common choices: Ireland (English-speaking, fast online portal), Netherlands (also English-friendly, strong digital infrastructure), Luxembourg (lowest VAT rate at 17%, but the rate doesn't affect what you charge customers, only your filing relationship). We see ~60% of our customers pick Ireland.
- Appoint a fiscal representative — required in most member states for non-EU sellers. Ireland is one of the few that doesn't require it. Fiscal rep fees: €3k–€8k/year typically.
- Register through the chosen member state's OSS portal. Setup time: 4–8 weeks. Mostly waiting on the portal.
- Charge the buyer's country VAT rate at checkout. Rates range from 17% (Luxembourg) to 27% (Hungary). Your checkout must know each buyer's country and apply the right rate.
- File a quarterly OSS return broken down by member state of consumption.
- Pay the total VAT in EUR to your member state of identification. They redistribute.
The threshold for non-EU sellers is €0. One €1 sale to an EU consumer triggers the registration obligation.
IOSS — for low-value imported goods (skip if you sell SaaS)
IOSS is for distance sales of imported goods with an intrinsic value of €150 or less. The threshold is goods-specific. AI/SaaS companies almost never use IOSS unless they sell physical merchandise (a Macropay t-shirt fulfilled out of a US warehouse and shipped to an EU consumer, for example).
IOSS exists because pre-July 2021 the EU exempted imported goods ≤ €22 from VAT entirely, which created arbitrage. IOSS closed that gap. The mechanics are similar to OSS: one quarterly return, pay through one member state, redistribute. The main complication is that IOSS requires a customs intermediary in most cases.
What MOSS was (and why it's gone)
MOSS — "Mini One-Stop Shop" — was the original 2015 scheme. It applied only to digital services (telecommunications, broadcasting, electronically supplied services). The 2015 rule change that flipped place-of-supply from seller-country to buyer-country for digital B2C was implemented through MOSS.
In July 2021, MOSS was rolled into OSS as part of the EU's broader VAT e-commerce reform. The scheme name "MOSS" technically no longer exists; what you used to file as MOSS is now filed as OSS (Non-Union) for non-EU sellers and OSS (Union) for EU-established sellers.
If you registered for MOSS pre-July 2021, your registration was automatically migrated to OSS. The portal URL changed in most member states; your customer-facing tax treatment did not.
If anyone (an accountant, a guide on the internet, your old CFO) says MOSS in 2026, they mean OSS. The terms are functionally interchangeable for digital services post-July 2021. The legal name is OSS.
Decision tree for SaaS / AI companies
The questions, in order:
- Are you established in the EU? If yes → Union OSS. If no → continue.
- Do you sell digital services (SaaS, AI inference, hosting, anything electronically supplied)? If yes → Non-Union OSS. If you also sell physical goods → see IOSS separately for the goods.
- Do you sell physical goods imported into the EU at ≤ €150 intrinsic value? If yes → IOSS (in addition to Non-Union OSS for any services).
- Are you in the UK? Brexit makes you a non-EU seller. → Non-Union OSS for EU sales, separate UK VAT registration with HMRC for UK domestic sales.
Filing mechanics in practice — what a quarter looks like
For a US AI company on Non-Union OSS via Ireland:
| Date | Activity |
|---|---|
| Jan 1 – Mar 31 | Collect VAT at point of sale, broken down by member state of consumption. |
| Apr 1 – Apr 20 | Generate OSS return. Sum sales × applicable rate by member state. |
| Apr 20 (deadline) | File OSS return via Ireland Revenue's ROS portal. Pay total in EUR. |
| Quarterly cycle repeats | Q2 due July 20, Q3 due Oct 20, Q4 due Jan 20. |
If you miss the deadline: Ireland (and most member states) impose interest from the original due date plus a fixed late filing penalty (typically €250–€500). Late filing also flags you for closer review on subsequent returns.
At scale (above ~€5M of EU revenue), most companies engage a fiscal representative or a full-service tax provider to handle filings, even though Ireland doesn't legally require one. The cost is typically €600–€2,000 per filing.
We registered for OSS in Ireland the second day after our first paying EU customer. It took six weeks. By the time the registration came through, we had €18,000 of EU revenue we'd been charging without VAT. The catch-up filing was painful.— Lina Okafor, VP Finance, Nimbus AI
The faster path is to let a Merchant of Record absorb all of this. Macropay is registered for OSS in our chosen member state, files quarterly, and the audit trail sits in our books, not yours. If you'd rather not pick a fiscal rep and learn the Revenue Online Service portal, the math is in our calculator. The companion piece on EU VAT reverse charge covers the B2B side, which OSS does not handle — that's a separate compliance track.