Complete Guide to OSS in the Czech Republic

Expanding into the European market often means establishing a warehouse in a strategically located country. The Czech Republic has become one of the most attractive logistics hubs in Central Europe thanks to its excellent infrastructure, competitive operating costs, and fast delivery times across the EU.

However, storing goods in the Czech Republic creates VAT implications that every foreign business should understand. Many non-EU e-commerce companies assume that registration for the One Stop Shop (OSS) scheme eliminates all VAT obligations. In reality, OSS simplifies reporting for certain cross-border B2C transactions, but it does not replace Czech VAT registration in every situation.

This guide explains how the OSS scheme works for foreign businesses storing goods in the Czech Republic and shipping them to customers across the European Union.

Why do foreign companies choose the Czech Republic?

The Czech Republic has become one of Europe's preferred logistics locations for companies selling throughout the EU. The country offers several advantages:

• Central European location
• Excellent motorway connections
• Efficient logistics providers
• Lower warehousing costs than Germany
• Fast delivery to Germany, Austria, Poland, Slovakia and other EU countries
• Two Amazon fulfillment centers
• Effective cooperation with the tax authorities

As a result, many foreign companies keep inventory in Czech warehouses while selling to consumers across Europe.

Warehouse in the Czech Republic and the VAT obligations

In practice, storing goods in the Czech Republic generally means that the foreign business becomes involved in Czech VAT rules. Depending on the business model, the company may need to:

• register for Czech VAT,
• register for the OSS scheme
• file Czech VAT returns,
• submit OSS VAT returns
• submit Intrastat reports.

The exact obligations depend on the nature of the supplies.

Which sales are reported in VAT reports and which through OSS?

The filing of VAT returns apply to all companies that decide to use a warehouse in the Czech Republic. In these returns, they primarily report the acquisition of stock into the warehouse and all B2B transactions.

The OSS scheme is used for reporting B2C transactions. Nevertheless, the registration for OSS in the Czech Republic is relevant only for non-EU established companies, as EU companies register for OSS in their Member State of establishment.

‍However, please keep in mind that if the goods are sold to a customer locally - i.e., without cross-border transport, within a single country - this does not qualify as a distance sale, and such a transaction cannot be reported in the OSS. This transaction must be reported in the local VAT return.

Advantages of the OSS scheme

The OSS scheme significantly simplifies cross-border EU VAT compliance for businesses selling B2C goods and services by allowing them to register, file a single quarterly VAT return, and pay all EU VAT due in their home Member State (or a single Member State of identification for non-EU entities).

This eliminates the costly and burdensome requirement to register for VAT in every individual destination EU Member State where customers are located, streamlines administrative procedures, and substantially reduces compliance costs while ensuring seamless tax reporting across the entire European Union.

Keeping accurate records

Businesses using OSS must maintain detailed records of all transactions covered by the scheme. These records should include information such as:

• destination country,
• VAT rate applied,
• taxable amount,
• VAT amount,
• customer location,
• dispatch details,
• invoice references where applicable.

The Czech Financial Administration requires OSS records to be retained and made available upon request in accordance with the applicable EU and Czech VAT rules.

Should you be interested to have your VAT One Stop Shop in the Czech Republic, please do not hesitate to contact us.

Frequently Asked Questions