The OSS scheme can only be applied to goods and services sold to end-consumers in EU Member States. For years, the Estonian Tax and Customs Board have described in the guidance published on its website that, for the purposes of the OSS scheme, end-consumers in other Member States are only individuals.
Likely at the beginning of 2026, the Tax and Customs Board changed its position. Under the new interpretation, end-consumers for OSS scheme purposes are not only individuals but also other persons who are not registered for VAT in the Member State of destination. This includes companies, non-profit organisations, foundations, state and local government institutions that are not registered for VAT in that Member State.
Accordingly, an Estonian VAT-registered seller may treat a buyer as an end-consumer until the buyer provides its VAT registration number in the country where the goods are destined.
The OSS scheme can be applied to intra-Community distance sales and, in addition to digital services, to other services supplied to end-consumers in other EU Member States where the place of supply is deemed to be the end-consumer's Member State. Examples include services related to immovable property (construction, valuation), cultural, artistic, sporting, educational and entertainment services (performances, concerts, exhibitions), vehicle rental services and similar services.
For example, if an Estonian company sells goods through its e-commerce platform to end-consumers in Finland, Sweden, Latvia, Lithuania, and Poland, it may apply the Estonian 24% VAT rate to those sales as long as the total turnover from such sales across all Member States does not exceed the EUR 10,000 threshold when calculated from the beginning of the year.
Once this threshold is exceeded, the company must begin applying the OSS scheme and must charge the VAT rate applicable to those goods in the respective Member State on its sales invoices.
However, a company is also permitted to apply the OSS scheme from the very first e-commerce sale. This may be advisable where the VAT rates applicable to those goods in other Member States are lower than the Estonian VAT rate.
At present, the OSS scheme cannot be applied if the Estonian company has a fixed establishment in the same Member State, or if the goods are dispatched to an end-consumer in another Member State from a warehouse located in that same Member State rather than from Estonia.
In the coming years, the OSS scheme, which simplifies the fulfilment of VAT obligations, will be expanded to cover additional cross-border transactions that are not yet included in the scheme but for which VAT liability arises in another Member State.
Selling to customers across the EU? Let us help you simplify your VAT compliance through the OSS scheme. Contact us to learn more.
