EU-KOR vs OSS: Which Scheme Applies When Selling Across the EU?

In the previous articles, we looked at how the Dutch KOR works (KOR (Dutch Small Businesses Scheme): Rules, Requirements and VAT implications), which turnover counts towards its €20,000 limit (KOR Turnover Explained: What Counts Towards the €20,000 Limit?), and which VAT obligations can remain (KOR and International VAT: The Obligations That Don’t Disappear).

For most service-based entrepreneurs, such as coaches, consultants, bookkeepers and marketers, the Dutch KOR is the main scheme to consider. The EU-KOR and One Stop Shop, or OSS, become more relevant when selling physical products or largely automated online products directly to consumers in other EU countries.

First Check: What Are You Selling and to Whom?

If you provide standard professional services to VAT-registered businesses in other EU countries, the normal business-to-business VAT rules usually apply. The VAT is generally accounted for by the business customer under the reverse-charge mechanism.

Neither OSS nor the EU-KOR will usually provide a significant advantage in this situation.

You should continue reading if you sell directly to consumers in other EU countries, particularly if you:

• run an Etsy shop or webshop;
• sell physical products;
• sell software subscriptions;
• sell downloadable products; or
• provide other largely automated online services.

Are Your Cross-Border Consumer Sales €10,000 or Less?

The €10,000 threshold applies to the combined value of qualifying cross-border EU consumer sales, not separately to each country.

The current and previous calendar years are relevant. If the qualifying turnover did not exceed €10,000 in the previous year and remains within €10,000 in the current year, the place of supply can generally remain in the Netherlands, provided the other conditions are met.

For a business already participating in the Dutch KOR, this normally means the Dutch KOR can continue to apply. No VAT is charged under the Dutch KOR, and neither OSS nor the EU-KOR is normally needed for these sales.

You can voluntarily choose to apply the VAT rules of the customer’s country before crossing the threshold, but that choice has consequences and should not be made casually.

What Happens When You Exceed €10,000?

Once the combined threshold is exceeded, the relevant sales become taxable in the EU country where the consumer is located.

From the transaction that takes you over the threshold, you can no longer simply treat those qualifying sales as Dutch sales.

You then have three possible routes:

1. Apply for the EU-KOR in the relevant country.
2. Charge foreign VAT and report it through OSS.
3. Register and report VAT directly in the relevant country instead of using OSS.

For many small online sellers, the practical comparison will be between the EU-KOR and OSS.

Can You Use the EU-KOR (SME-VAT-Scheme)?

You can apply for the EU-KOR in one or more EU countries, but you must meet two turnover tests:

• Your turnover must remain within the national EU-KOR threshold of the relevant country.
• Your total turnover throughout the EU must not exceed €100,000 per calendar year.

The current and previous calendar years are considered, and some countries use an additional reference year.

If approved for the EU-KOR in a country:

• you do not charge VAT there on supplies covered by the exemption;
• you cannot deduct VAT relating to those exempt supplies;
• you do not submit regular VAT returns in that country; and
• you submit a quarterly EU-KOR turnover report in the Netherlands.

You can use the EU-KOR in some countries while using OSS for countries where you do not qualify for, or choose not to use, the exemption.

EU-KOR vs OSS at a Glance

Question	EU-KOR	OSS
What does it do?	Provides a VAT exemption	Simplifies reporting of foreign VAT
Do you charge VAT?	No, for supplies covered by the exemption	Yes, at the applicable rate of the customer’s country
Can you deduct related VAT?	No	Normal deduction rules apply
Is there an EU-wide limit?	Yes, €100,000 plus national limits	No equivalent OSS turnover ceiling
What do you submit?	Quarterly EU turnover report	Quarterly OSS VAT return
When is it worth investigating?	Small, relatively low-cost cross-border businesses	Businesses that must charge foreign VAT

Your Decision Path

You mainly provide services to business clients

The Dutch KOR and normal cross-border B2B rules are generally the relevant considerations. You will usually need neither OSS nor the EU-KOR.

You sell to EU consumers but remain within €10,000

Dutch VAT rules can generally continue to apply. If you participate in the Dutch KOR, that scheme is normally sufficient.

Your qualifying EU consumer sales exceed €10,000

The sales become taxable in the consumer’s country. Check whether you qualify for the EU-KOR in each relevant country.

If you qualify, compare the VAT exemption under the EU-KOR with charging foreign VAT through OSS.

If you do not qualify for the EU-KOR in a country, charge and report the applicable foreign VAT through OSS or register directly in that country.

Your total EU turnover exceeds €100,000

The EU-KOR is no longer available. OSS can still simplify the reporting of eligible cross-border consumer sales, but it does not exempt those sales from VAT.

Key Takeaway

Most entrepreneurs providing professional services will not need OSS or the EU-KOR. These schemes matter mainly to Etsy sellers, webshops and businesses selling products or largely automated online supplies to consumers across the EU.

Start with one check: have your combined cross-border consumer sales passed €10,000? If not, the Dutch KOR is normally enough. If they have, compare the EU-KOR and OSS as described above.

Frequently Asked Questions

Sources

• Belastingdienst, VAT on goods supplied to private customers in other EU countries
• Belastingdienst, Small Businesses Scheme in the EU, EU-KOR
• Belastingdienst, Turnover included for the EU-KOR
• Belastingdienst, EU-KOR and other VAT schemes
• Belastingdienst, Quarterly EU-KOR turnover report
• European Commission, VAT rules for small enterprises – SME scheme - VAT rules for small enterprises – SME scheme
• European Commission, National VAT rules - VAT rules for small enterprises – SME scheme

General information, not tax advice. I am not a tax adviser (belastingadviseur); for your own situation, consider asking a qualified one.