For a UK e-commerce business selling to consumers across the European Union, the Union One Stop Shop (Union OSS) is the difference between a single quarterly VAT filing in one member state and twenty-seven separate national registrations. The scheme has been in operation since 1 July 2021, was introduced by Council Directive (EU) 2017/2455 amending the EU VAT Directive 2006/112/EC, and is widely used. The practical mechanics, eligibility conditions, and limits are nonetheless routinely misunderstood by UK sellers acting on partial information — particularly post-Brexit, when the UK lost direct access to the regime through HMRC's MOSS and now must register via an EU establishment.

This is what Union OSS actually does, what it requires of a UK seller in 2026, what it does not solve, and how the regime is changing through the ViDA reform package adopted in March 2025.

What Union OSS is — and what it isn't

Union OSS is a special VAT scheme that allows eligible taxable persons to declare and pay VAT due on intra-EU business-to-consumer (B2C) distance sales of goods and certain B2C services through a single quarterly return filed in one member state of identification. The VAT is then distributed by that member state to the member states where the goods or services are consumed.

What Union OSS does cover: intra-Community distance sales of goods (B2C), telecommunications, broadcasting and electronic services to consumers, and a defined list of other B2C services to consumers in member states where the supplier is not established.

What Union OSS does not cover: business-to-business sales (which operate under the standard reverse-charge mechanism); imports from outside the EU (which fall under the separate Import One Stop Shop, IOSS, for consignments below €150, or standard import VAT procedures above); domestic sales within a single member state where the seller is established or has stock; and excise goods including alcohol, tobacco, and fuel.

The OSS framework consists of three schemes operating under the EU VAT Directive: the Union scheme (Articles 369a-369k), the Non-Union scheme (Articles 358a-369), and the Import scheme (Articles 369l-369x). The names mislead slightly — eligibility for each scheme depends not just on the seller's establishment but on the type of supply.

Eligibility for a UK seller post-Brexit

Since 1 January 2021, UK businesses have been non-EU established taxable persons for EU VAT purposes. This materially affects which OSS schemes are available.

For goods: a UK seller dispatching goods to EU consumers from a stock location inside the EU can register for the Union scheme through that EU member state. The Polish spółka z ograniczoną odpowiedzialnością (Sp. z o.o.) is the standard route into Union OSS for UK clients in our engagement base. A UK seller without an EU establishment cannot use Union OSS for distance sales of goods.

For services: a UK seller supplying B2C services to EU consumers can register for the Non-Union scheme through any EU member state of its choosing. This scheme is available to non-EU taxable persons regardless of EU establishment. The Non-Union scheme covers only services — it does not cover any sales of goods.

For sub-€150 imports: a UK seller dispatching goods to EU consumers from outside the EU can register for the Import scheme (IOSS) for consignments not exceeding €150 intrinsic value. UK sellers, as non-EU established taxable persons, must appoint an EU-established intermediary who is jointly and severally liable for the VAT obligations. The intermediary requirement is set out in Article 369m of the VAT Directive and is unavoidable for UK sellers without an EU establishment.

The substantive position is that a UK seller wanting to use Union OSS for cross-border goods sales — the standard requirement for e-commerce businesses with EU consumer volume — needs an EU establishment. The Polish Sp. z o.o. is the route most of our clients take.

How registration and filing work

A UK seller registering for Union OSS through a Polish Sp. z o.o. registers with the Polish tax administration (Krajowa Administracja Skarbowa, KAS) and receives a Union OSS VAT identification number. From that point:

The seller charges VAT at the rate applicable in each customer's member state of consumption, not at the Polish rate.

The seller files a single quarterly Union OSS return (form VIU-DO in Poland) covering all eligible intra-EU B2C sales across the twenty-seven member states.

The seller makes a single VAT payment in euros to the Polish tax administration, which then distributes the amounts to the relevant member states of consumption.

The seller keeps records of all OSS-covered transactions for ten years under Article 369k of the VAT Directive — a longer retention period than most national VAT records.

The mechanics are well-bounded and operate predictably. The complications, where they arise, sit in the boundary cases between OSS and parallel national VAT obligations.

The limits — what Union OSS does not solve

Three structural limits matter for UK e-commerce sellers in particular.

Stock held in multiple EU countries. Where a seller holds stock in more than one EU member state — most commonly through Amazon FBA's Pan-European programme or comparable multi-warehouse arrangements — Union OSS does not eliminate the need for national VAT registrations in the member states where stock is held. Movements of stock between EU countries are treated as intra-Community transfers of own goods and must be reported under each national VAT system. This is one of the structural issues the ViDA package addresses from 2028.

The €10,000 threshold does not apply to UK sellers. The harmonised €10,000 intra-EU distance-sales threshold, below which a seller can apply its home-country VAT rate rather than destination-country rates, applies only to taxable persons established in a single EU member state. UK sellers are non-EU established and have no equivalent threshold. Destination-country VAT applies from the first euro of cross-border B2C sale into the EU.

B2B sales operate separately. Sales by UK sellers to EU business customers are outside the scope of Union OSS entirely. B2B sales operate under the reverse-charge mechanism, with VAT accounted for by the business customer in its own member state under Article 196 of the VAT Directive.

The interaction with IOSS and the July 2026 customs reform

Sellers dispatching goods to EU consumers from outside the EU (rather than from EU-held stock) sit in IOSS territory rather than Union OSS. The mechanics differ. IOSS covers consignments below €150 intrinsic value; consignments above €150 require standard import VAT procedures.

From 1 July 2026, Council Regulation (EU) 2026/382 introduces a transitional €3 flat customs duty per tariff sub-heading on IOSS consignments below €150. This is the first phase of the broader closure of the €150 duty-free loophole. The full abolition of the threshold is tied to the EU Customs Data Hub, expected mid-2028. For UK and US sellers, the transitional duty changes the landed-cost calculation and reinforces the structural case for EU-based fulfilment over direct-import models for sellers with material EU consumer volume.

ViDA and the trajectory through 2028

The VAT in the Digital Age (ViDA) reform package was adopted by the EU Council on 11 March 2025, published in the Official Journal on 25 March 2025, and entered into force on 14 April 2025. The package comprises Council Directive (EU) 2025/516, Council Regulation (EU) 2025/517, and Council Implementing Regulation (EU) 2025/518.

For OSS specifically, the key change is the Single VAT Registration pillar, with core reforms taking effect from 1 July 2028. From that date, Union OSS expands materially to cover nearly all B2C supplies of goods including domestic supplies by foreign sellers, intra-EU transfers of own goods (currently the main pressure point for multi-warehouse sellers), and supplies with installation. A mandatory EU-wide reverse charge for B2B sales by non-established suppliers also takes effect.

The practical effect: UK sellers operating through an EU establishment will, from 2028, be able to use OSS to cover materially more activity than they can today. Multi-warehouse stock movements that currently require parallel national VAT registrations will fall under OSS. The architecture decision made today should be made with the 2028 evolution in mind, not as if the 2026 regime is permanent.