EU VAT & Union OSS Compliance Guide: How We Manage Tax and Filings on Your Behalf

Navigating cross-border value-added tax (VAT) compliance in the European Union can be complex. To completely remove the administrative burden from your business, our marketplace operates a Pure Hybrid Tax Model. In plain terms, our platform automatically acts as the "Deemed Supplier" for cross-border transactions, meaning we take full legal responsibility for calculating, collecting, and remitting VAT to European tax authorities. This guide explains how this setup works and how it simplifies your business filings.

Our hybrid setup changes how you handle your tax filings depending on the destination of the sale:

For Cross-Border Sales (Deemed Supplier): You have zero filing or tax remittance obligations. The marketplace handles 100% of the collection and files the tax quarterly under our Union OSS registration. In your accounting, you simply record this as a zero-rated B2B intra-community supply to the marketplace platform. We generate a compliant Self-Billing Invoice for your records.
For Domestic Sales (Disclosed Agent): You must declare these domestic sales and pay the collected VAT to your local tax authority during your standard VAT filings, exactly as you would for sales on your own webshop. We include this domestic VAT in your gross payout.

How the Tax System Works

When an order is placed, our system analyzes where the product is shipped from (your warehouse) and where the customer is located (destination country) to apply the correct tax model:

Deemed Supplier Model (Cross-Border Sales): If you ship a product from your warehouse in one EU country to a customer in another EU country, the marketplace is legally treated as the seller of the product. We calculate the local VAT rate of the customer's country, collect it, and file it via our Union OSS (One-Stop-Shop) tax account. Payouts for these sales are issued on a Net Basis (meaning we pay you the base product price and shipping, retaining the VAT to pay the tax authorities on your behalf).
Disclosed Agent Model (Domestic Sales): If you ship a product from a warehouse to a customer in the same country (e.g., German warehouse to German customer), the sale is domestic. The marketplace acts only as a facilitator. We calculate local VAT at checkout, but you are responsible for remitting this VAT. Payouts for these sales are issued on a Gross Basis (the payout includes the product price and the VAT, minus the standard platform service fee).