VAT OSS return

Learn more about VAT on digital services and VAT OSS.

For VAT OSS to be applicable, both your company and the customer must be VAT registered in the EU.

Settings

Before you can run the VAT OSS Return you need to:

  1. Register for OSS on gov.uk.

  2. Record your VAT status.

  3. Record your participation in the OSS scheme.

  4. Set your customer’s country.

  5. Mark sales as digital services.

Record VAT registration status

  1. Go to Account settings > VAT Settings.

  2. Select VAT registered in an EU member state.

For VAT OSS to be applicable, your company must be VAT registered in the EU.

Record your participation

  1. Go to Account settings > VAT Settings.

  2. In the One Stop Shop (OSS) section, select I am registered for OSS, and complete the required selections.

Set your customer's country

For VAT OSS to be applicable, the customer must be VAT registered in the EU.

The country specified in the customer's Profile is used to determine if they are within the EU.

  1. Go to Sales > Customers, and select the customer.

  2. In Profile > Company details, select the Country.

  3. Select Update details to save your changes.

When you create a new quote or invoice for this customer, the country will be automatically added. For existing invoices, you can update the address directly on the invoice.

Mark sales as digital services

In order to report the VAT due correctly, you need to mark the relevant sales codes as Digital services. Sales to other EU countries with digital services sales codes will not be included on your normal VAT return.

You can either update an existing sales code and select Digital services, or create a new sales code.

Create digital services sales code

  1. Go to Account settings > Sales Codes.

  2. Enter a name for your code and select Add New Sales Code.

  3. Once the code has been created, select Digital services in the settings, then Update.

When you add a digital services line to an invoice you need to add the correct VAT rate to that line. You can edit your VAT rates from the VAT settings screen.

Run the report

  1. Go to Home > Reports.

  2. In Tax, select VAT OSS Return.

    If VAT OSS Return is not available, check you have followed the settings above.

  3. Select Create new, select the VAT quarter, and then View report.

You can select Drilldown report to display further information.

Submit the report to HMRC

When you are ready to submit the report to HMRC, select Finalise.

The journal will also be created at this point.

Download the finalised report and submit the report to HMRC.