OSS vs Local VAT Registration in Germany: Which Do You Need?

Vaytax Editorial Team

Licensed tax advisor · files with the Finanzamt

Vaytax is operated by FRADECO GmbH tax advisory firm, a Franco-German tax advisory firm specialising in cross-border German VAT compliance for international businesses. The firm holds both German tax advisor and French Expert-Comptable qualifications and files via the Finanzamt.

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One of the most common questions from e-commerce sellers entering the German market is whether they need to register for VAT in Germany or whether the EU One-Stop Shop (OSS) is enough. The answer depends on where your goods are physically located when they ship to the customer. This guide walks you through the decision, compares both options side by side, and covers the three most common seller scenarios.

1. The Quick Decision: Do You Need OSS, Local Registration, or Both?

Before diving into the details, here is a simple decision tree:

If you use Amazon’s Pan-European FBA programme, the answer is almost always “both.” Amazon distributes your inventory across multiple EU warehouses, including Germany, which triggers a local registration requirement in each country where stock is held.

2. What Is OSS (One-Stop Shop)?

The One-Stop Shop was introduced on 1 July 2021 as part of the EU’s e-commerce VAT reform. It replaced the old country-specific distance selling thresholds with a single EU-wide system.

Under OSS, you register once in your home EU country and file a single quarterly return covering all cross-border B2C sales of goods to consumers in other EU member states. Your home tax authority collects the VAT and distributes it to the destination countries.

Key facts about OSS:

• Threshold: €10,000 in combined EU-wide cross-border B2C sales. Below this, you can charge your home country’s VAT rate. Above it, you must charge the destination country’s rate.
• Filing: Quarterly, in your home country, in your home language.
• Scope: Only covers distance sales, goods shipped cross-border from one EU country to a consumer in another EU country.
• Eligibility: Available to EU-established businesses, and to non-EU businesses that store goods in an EU country. A non-EU seller whose stock sits in a German warehouse uses that country as its member state of identification (Germany) and files Union OSS there. Non-EU sellers with no EU stock use the non-Union scheme for B2C services, or IOSS for imports under €150.
• Limitation: You cannot reclaim input VAT (Vorsteuer) through OSS. If you have expenses in another EU country, you must use the VAT refund procedure (Directive 2008/9/EC) separately.

3. What Is Local German VAT Registration?

A local German VAT registration means you are fully registered with a German Finanzamt (tax office). You receive a German Steuernummer (tax number) and a USt-IdNr. (VAT identification number), and you are subject to German VAT filing obligations.

Key facts about local registration:

• Filing: Monthly USt-Voranmeldung (preliminary VAT return), plus an annual Umsatzsteuererklärung (annual VAT declaration).
• Filing method: Returns must be submitted electronically to the Finanzamt, the German tax authority does not accept paper filings or foreign formats.
• Language: All communication with the Finanzamt is in German. Most foreign sellers work through a Steuerberater (tax advisor) who handles filings and correspondence.
• Trigger: Required whenever you have a physical tax nexus in Germany, warehouse, stock, consignment inventory, or a permanent establishment.
• Registration process: You must complete the Fragebogen zur steuerlichen Erfassung (tax registration questionnaire), submit supporting documents (certificate of incorporation, articles of association, proof of economic activity), and wait 4–8 weeks for approval. See our complete registration guide for details.
• Input VAT: With a local registration, you can deduct German input VAT (Vorsteuer) on your returns, a significant advantage over OSS.

4. Side-by-Side Comparison

5. Scenario 1: Pure Drop-Shipper (No German Warehouse)

You are an EU-based seller. You store your goods in Poland and ship directly to German customers from your Polish warehouse. You have no inventory in Germany.

Since you are shipping cross-border from Poland to German consumers, this qualifies as a distance sale under the OSS rules. You register for OSS in Poland, file quarterly, and report the German VAT on your OSS return. No German registration needed.

However, watch for two things:

• Volume growth: If your German sales grow significantly, the inability to reclaim German input VAT through OSS could become costly. At higher volumes, a local registration with Vorsteuer recovery may actually save you money.
• B2B sales: OSS only covers B2C sales. If you also sell to German businesses, you may still need a local registration or at minimum a USt-IdNr. for reverse charge purposes.

6. Scenario 2: Amazon FBA Seller (Pan-European Programme)

You are a French company using Amazon’s Pan-European FBA programme. Amazon stores your inventory across multiple EU warehouses, including fulfillment centres in Germany (Bad Hersfeld, Graben, Winsen, etc.).

The moment Amazon places your goods in a German warehouse, you have a physical tax nexus in Germany. All sales fulfilled from German stock are domestic German sales, not distance sales, and cannot be reported through OSS.

In practice, most Pan-European FBA sellers need both:

• Local German VAT registration for sales fulfilled from German warehouses to German customers (domestic sales) and for sales shipped from Germany to customers in other EU countries.
• OSS registration in their home country for sales shipped from warehouses in other EU countries to consumers across the EU.

Amazon will also require your Bescheinigung nach §22f UStG (VAT compliance certificate) before allowing you to sell on amazon.de. Without it, your selling privileges will be suspended. Read more in our Amazon VAT Germany guide.

7. Scenario 3: UK Seller Post-Brexit

You are a UK-based company. Since Brexit, the UK is a non-EU country, which fundamentally changes your VAT obligations.

As a non-EU business you can't use OSS on the strength of EU establishment, but you can on the strength of EU-stored stock. Your route depends on where your goods are:

• Goods shipped from the UK to German consumers: Import VAT applies at the German border. If the goods are valued under €150, you may use the Import One-Stop Shop (IOSS), but this is a separate system from OSS.
• Goods stored in an EU warehouse (e.g., Amazon FBA in Germany): You need a local VAT registration in Germany (and every other EU country where stock is held). There is no simplified scheme that replaces this.
• Goods stored in an EU warehouse and shipped cross-border within the EU: you CAN use Union OSS. A non-EU business registers for the Union scheme in the country where the goods are stored (its member state of identification). If your stock is in Germany, you register for Union OSS through Germany and report your intra-EU B2C distance sales there, no registration in each destination country, no EU subsidiary required.

Some UK sellers set up an EU subsidiary post-Brexit, but if your stock already sits in a German (or other EU) warehouse, you have the Union-OSS route without one, so a subsidiary is rarely needed for OSS access alone.

8. The Hidden Benefit of Local Registration: Vorsteuer

One of the most overlooked advantages of local German VAT registration is the ability to reclaim Vorsteuer (input VAT) on your German expenses.

If you sell on Amazon from a German warehouse, you are almost certainly incurring German VAT on:

• Amazon FBA fees, storage, fulfillment, and advertising fees charged by Amazon Germany include 19% VAT
• Logistics and shipping costs, German carriers charge VAT on their services
• Warehousing fees, third-party logistics providers in Germany charge VAT
• Returns processing, handling and disposal costs include VAT
• Professional services, photography, translation, or marketing services billed from Germany

With a local German VAT registration, you deduct this input VAT directly on your monthly returns. The effect can be substantial, for high-volume sellers, Vorsteuer recovery can offset thousands of euros per year.

This is why even sellers who technically could operate with OSS alone sometimes choose to register locally in Germany: the Vorsteuer savings exceed the cost of maintaining the registration.

Frequently Asked Questions

Can I use OSS if I have Amazon FBA in Germany?

No. OSS only covers distance sales shipped cross-border from another EU country. If Amazon stores your goods in a German warehouse, that creates a local tax obligation. You need a full German VAT registration for sales from German stock. You can still use OSS for cross-border sales from warehouses in other EU countries.

Do I need to cancel OSS if I register locally in Germany?

No. You can use both simultaneously. Use your local German VAT registration for domestic sales from German stock, and OSS for cross-border B2C sales shipped from other EU countries. Many Amazon FBA sellers operate with both.

Is OSS available to non-EU companies?

The Union OSS scheme has two ways in: EU establishment, or EU-stored stock. A non-EU company storing goods in an EU country (for example a German warehouse) uses that country as its member state of identification and can file Union OSS there for its intra-EU B2C distance sales. Non-EU companies with no EU stock use the non-Union scheme for B2C services, or IOSS for imports under €150. You still need a local VAT registration in each country where you store goods.

Which is cheaper: OSS or local German VAT registration?

OSS filing is typically free through your home country tax office. Local German VAT registration involves ongoing filing costs (€79/month with Vaytax). However, local registration lets you reclaim German input VAT (Vorsteuer) on expenses like Amazon fees, logistics, and warehousing, which can make it net cheaper for sellers with significant German costs.