E-Invoicing and OSS: Streamlining Compliance in a Digital VAT World

What is OSS? 

The One-Stop Shop is a European Union (EU) VAT compliance scheme that simplifies the declaration and payment of VAT for businesses engaged in cross-border B2C (Business-to-Consumer) sales of goods and services within the EU.

Introduced as part of the EU’s e-commerce VAT reforms in July 2021, it allows sellers to report all eligible intra-EU distance sales through a single VAT return in one EU member state, rather than registering for VAT in each country respectively. This reduces the administrative burden on business entities and ensures more consistent tax compliance across borders.

There are three variants of this scheme: the Union OSS for EU-based businesses, the Non-Union OSS for non-EU suppliers of digital services, and the Import One Stop Shop (IOSS) for non-EU sellers of low-value goods (under €150) shipped into the EU. These schemes are designed to align with the growing trend of digital cross-border trade and are increasingly supported by technologies like digital obligations and real-time reporting. While it is an EU initiative, similar simplification regimes exist globally under different names, such as Mini One Stop Shop (MOSS) (the precursor for digital services), VAT e-commerce packages, or Simplified VAT Schemes in other jurisdictions aiming to facilitate compliance for foreign suppliers and e-commerce platforms operating in their markets.

How does Electronic Invoicing influence the One-Stop-Shop?

Electronic Invoicing significantly enhances the efficiency, accuracy, and compliance of the OSS VAT reporting system. While it simplifies cross-border VAT obligations for B2C exchange within the EU, e-billing provides the digital infrastructure to support it by ensuring that invoice data is structured, standardised, and automatically processed. This facilitates accurate VAT reporting, reduces human error, and accelerates reconciliation between reported sales and tax filings.

By capturing and validating transactional data in real time or near real time, e-invoicing helps businesses ensure that all relevant cross-border sales are correctly reflected in their One Stop Shop returns. It also enables better auditability and transparency for tax authorities, who can access consistent and machine-readable data across jurisdictions. As the EU continues to push towards more real-time digital tax reporting (e.g., under the ViDA proposal – VAT in the Digital Age), e-invoicing will become increasingly integrated with it and other compliance mechanisms, further reducing administrative burdens and increasing compliance reliability for sellers across the EU.

What are the benefits of utilising OSS in a business?

The Scheme allows businesses to declare and pay VAT for all applicable sales through a single return in one member state, removing the need for multiple VAT registrations across different countries. This centralisation significantly reduces the administrative burden on multinational enterprises and reduces the compliance costs, while also improving operational efficiency and cash flow. By standardising reporting processes, especially when combined with digital tools like e-invoicing, it will enhance transparency and accuracy, minimising the risk of errors. The system supports legal certainty, encourages cross-border business expansion, and aligns with the EU’s broader goals for digital tax transformation. Overall, it enables a more streamlined, modern, and scalable VAT framework for businesses operating across the EU.

Crossing Borders Digitally: Mandatory e-Invoicing and The One Stop Shop Scheme in France and Romania

Romania

In Romania, the e-invoicing system primarily focuses on real-time reporting and validation of domestic exchange, regardless of a business’s participation in the Scheme.

Businesses utilizing it for cross-border B2C supplies must still comply with Romania’s e-invoicing requirements for any applicable domestic transactions, such as those linked to a fixed establishment or domestic VAT certifications. While the Scheme covers cross-border B2C sales within the EU, companies solely conducting such sales into Romania and reporting through the Scheme, are not required to register for VAT locally, and therefore, Romanian e-invoicing and e-transport obligations typically do not apply. However, companies VAT-registered in Romania that engage in domestic B2B transactions must comply with the RO e-Factura regulations, mandating e-invoicing.

The Scheme registration alone does not create a Romanian establishment or domestic VAT obligation, meaning Romanian fiscal reporting obligations like SAF-T and e-Factura do not apply. As of the 1^st of January 2024, taxable operators registered for VAT in Romania but without local establishment were obliged to submit invoices through the national electronic invoicing system, RO e-Factura, as stipulated by Government Emergency Ordinance no. 120/2021.

In conclusion, if the company is only VAT-registered under the Scheme and not making domestic B2B/B2G supplies in Romania, it will not be required to comply with Romanian e-invoicing and e-reporting obligations. However, if it holds a local Romanian VAT number outside the Scheme, and makes taxable domestic supplies, then e-invoicing rules (like RO e-Factura) could become mandatory.

France

In France, e-invoicing and e-reporting obligations apply primarily to businesses established in France or foreign businesses with a French VAT registration or fixed establishment. For B2B transactions, companies falling into either of those categories are required to issue electronic invoices under the French e-invoicing mandate. However, foreign businesses using the Scheme without a French VAT number or establishment are excluded from this obligation, as OSS-registration does not qualify as a French establishment for VAT purposes.

Regarding e-reporting, which covers B2C transactions and certain cross-border B2B supplies, the same rules apply. Only businesses with a French VAT registration or fixed establishment are required to submit transactional data via the French e-reporting system. Companies functioning under the Scheme alone are exempt, as their transactions are declared through the One Stop Shop-portal and not subject to France's domestic digital reporting requirements.

If the company is only VAT-registered under the Scheme and not VAT-registered in France or established in France (under the rules of ‘deemed establishment’), then it is not required to comply with French e-invoicing and e-reporting obligations. However, if it holds a local French VAT number outside the Scheme, and is established in France, then e-invoicing rules could become mandatory.

To Summarise…

The integration of e-invoicing with the EU’s One Stop Shop scheme represents a transformative step in simplifying and digitising VAT compliance across the single market. The Scheme provides a streamlined mechanism for businesses to manage cross-border B2C VAT obligations through a single EU member state, significantly reducing administrative complexity and fostering seamless intra-EU trade. When paired with e-invoicing, the efficiency, accuracy, and transparency of VAT reporting are further enhanced, enabling real-time data validation and minimising compliance risks.

Country-specific applications, such as those in France and Romania, illustrate the nuanced that interplay between OSS and national e-invoicing mandates. In both jurisdictions, Scheme-registered businesses without local VAT registration or establishment are exempt from domestic e-invoicing and e-reporting obligations, reinforcing it's role as a unifying cross-border compliance tool. However, once a business registers locally for VAT or engages in domestic taxable transactions, national digital reporting requirements, such as France’s e-reporting and Romania’s RO e-Factura, will become applicable.

Ultimately, the alignment between OSS and e-invoicing initiatives underlines the EU’s broader ambition to modernise VAT systems, reduce fraud, and support a fully digitalised internal market. Businesses operating across borders in the EU must stay attuned to these developments to ensure compliance while capitalising on the operational efficiencies offered by digital tax transformation.