WSTO and VAT OSS – what is intra-Community distance selling of goods?
An ESPO arises when a specific delivery meets the conditions relating to the buyer, the goods and transport from one EU country to another.
The order channel does not determine eligibility: WSTO may result from a store, marketplace, telephone or email.
Five goals in WSTO qualification
Go through the questions one by one. Only five "yes" answers lead to WSTO. A "no" answer means you need to check another transaction type.
Is the delivery subject to goods?
ESPO concerns the delivery of goods, not the provision of services.
YES go to gate 2NO check rules for servicesDoes transport start in the EU?
The goods must be located in a Member State before dispatch begins.
YES go to gate 3NO import or IOSS possibleDoes the transport end in another EU country?
The origin and destination of the shipment must be in two different Member States.
YES go to gate 4NO local sales possibleDoes the buyer belong to the correct category?
Most often, this is a consumer, but the definition also includes selected entities treated as non-taxpayers.
YES go to gate 5NO WDT/WNT possibleIs the supplier involved in the transport and is it not operating exclusively?
Participation may be direct or indirect. Excluded are, among others, new means of transport and delivery with assembly.
YES result: WSTONO check the correct mechanism
Result: delivery can be WSTO
Next, determine the place of taxation and the settlement method. STO is one of the core areas of the VAT OSS procedure. The EU definition is also presented by the European Commission in its OSS guide.
Five STO conditions in one place
- The subject of delivery are goods.
- Goods go from one EU country to another EU country.
- The supplier organizes the transport, acts on its behalf or participates in it indirectly.
- The buyer is a consumer or other entity falling within a special category of ESPO recipients.
- The goods are not a new means of transport or delivery after assembly or installation by or on behalf of the seller.
Who can be a recipient of WSTO?
Most often, this is a private individual. The definition also covers certain non-taxable legal entities and taxpayers whose intra-Community acquisitions are not subject to VAT under specific rules.
The actual status and role of the buyer must be verified. A standard taxpayer purchasing goods as part of a business activity may result in an IDT/ICT instead of an ISTO. Details are provided in the VAT OSS and B2B Sales.
| Characteristic | WSTO | WDT/WNT | Local sales |
|---|---|---|---|
| Buyer status | Consumer or specific category of recipient | Taxpayer operating as a company | B2C or B2B |
| Transport | With the participation of the supplier, also indirectly | Goods move between EU countries | No traffic between EU countries |
| Direction | One EU country → another EU country | One EU country → another EU country | Beginning and ending in the same country |
| Customer VAT ID | Does not decide on its own | Important for qualifications and reporting | Does not change local delivery direction |
| VAT place | Basically, the country of end of transport | Rules of intra-Community supply in the country of dispatch and intra-Community supply in the country of purchase | Country where local delivery takes place |
| OSS | Possible Union OSS | NO | As a rule no; an exception may apply to deemed suppliers |
| VIES / VAT-EU | It is not the primary settlement mechanism | Usually important | Not because of local sales alone |
| A typical example | PL → DE consumer | PL → DE company | Stock DE → customer DE |
What does the seller's indirect participation in transport mean?
STO can also occur when the customer formally enters into a contract with the carrier. What matters is the supplier's actual involvement in organizing the shipment.
- The seller commissions transport to a subcontractor.
- Covers the cost of transportation and charges it to the customer.
- Promotes a specific delivery service.
- Connects the customer with the carrier.
- Provides the carrier with the data needed to complete the shipment.
How to determine the place of taxation of ESPO?
When applying the country of destination principle, the VAT place of delivery is generally the country where the transport ends. The European Commission describes this place of taxation rule as an exception for distance selling of goods.
Poland
The goods are shipped from the Polish warehouse.
Germany
For WSTO, you apply the appropriate German VAT, which you can settle via OSS. See the broader context: VAT in Germany.
In the similar scenario of Poland → French consumer, after confirming the ESPO, the appropriate rules of the destination country must be applied. The VAT guide in France.
Simplification may, under certain conditions, maintain taxation in the country of establishment. However, it does not change the definition of STO. Full calculation is provided in the VAT OSS limit.
What is not WSTO?
The mere fact that the goods were ordered online or crossed a border is not sufficient for qualification.
- DE → DENO
Sales from German stock
There is no traffic between two EU countries. This is a local sale in Germany.
Check local VAT in Germany - PL → DENO
Standard corporate client
Possible WDT/WNT instead of B2C sales covered by ESPO.
VAT OSS and B2B sales - China → DENO
Imported sales
The goods begin transport outside the EU. Potentially, IOSS or import is appropriate.
Compare OSS and IOSS - PL → DENO
A new means of transport
New means of transport are excluded from the definition of ESPO.
- PL → DENO
Machine with assembly
Delivery with assembly or installation by the seller or on his behalf has a separate rule.
- PL → DE magazineNO
Moving your own goods
There is no sale to the consumer here. This is a transfer of inventory requiring separate analysis.
VAT OSS and Amazon FBA
Not sure if a particular delivery is WSTO?
We help separate WSTO from local sales, WDT/WNT, imports and transfers of own inventory, and organize data before OSS settlement.
WSTO from a foreign magazine
A company based in Poland can settle shipments originating in Germany or the Czech Republic through the Polish Union OSS WSTO. However, it must separate sales by country of origin.
Warehouse in the Czech Republic
The stock itself may give rise to local VAT obligations and reporting of its own movement.
Shipping CZ → customer DE
This delivery may be a WSTO if it meets the other conditions.
Local VAT in the Czech Republic
Check when VAT registration is needed in the Czech Republic.
WSTO in dropshipping
The physical movement of EU → EU alone does not guarantee that a store delivery to the consumer is an STO. In the B → A → C chain, one transport is attributed to only one delivery.
Wholesaler DE
The first participant in the chain.
PL Store
An intermediary selling to a client.
FR Client
The final recipient of the goods.
First, assign the transport to the correct delivery, and only then evaluate the STO. The outcome cannot be determined without Incoterms, contracts, and the actual organization of transport.
If, after analysis, the actual shipment is subject to VAT in France, also check the local context in the VAT in France. For a full analysis of chain models, see the VAT OSS in dropshipping.
What data should be kept for ESPO?
The qualification should be reproducible from records, order data and shipping documents.
- Transaction ID
- Buyer status and VAT ID
- Country of origin of transport
- Country of end of transport
- Entity organizing transport
- Delivery notes
- Type of product
- Proven exclusions
- The State of Consumption
- Applied VAT rate
- Tax base
- Returns and corrections
- Sales Source
- Ship-from country VAT number
Don't just record the customer's country. For WSTO, the actual origin and destination of the shipment and how the seller participated in the shipment are equally important.
VAT OSS Library
Select a topic on the left. On the right, you'll see a brief summary and a direct link to the relevant guide.
VAT OSS
General guide to the One Stop Shop mechanism, procedures, country of identification and country of consumption.
Read the guideOSS VAT Limit
Explanation of the EUR 10,000 threshold, how it is calculated and when the place of taxation changes.
Read the guideWSTO and VAT OSS
Conditions for intra-Community distance sales of goods, recipients and most important exclusions.
Read the guideOSS and IOSS
Comparison of sales of goods located in the EU with import sales from a third country.
Read the guideVAT OSS registration
Separate instructions for registration to the EU OSS procedure via the VIU-R form.
Read the guideVIU-DO
A practical guide to the OSS quarterly VAT return, EUR currency and UNR number.
Read the guideVAT OSS correction
Rules for settling refunds, discounts and errors relating to a previous period.
Read the guideOSS VAT records
The scope of data needed to prepare declarations and subsequent control of OSS settlements.
Read the guideDeregistration from VAT OSS
Withdrawal from the procedure and change of country of identification.
Read the guideExclusion from VAT OSS
Reasons for exclusion, consequences and conditions for re-registration.
Read the guideOSS VAT audit and penalties
Risks related to errors, missing declarations, arrears and incomplete records.
Read the guideVAT OSS and Amazon FBA
Separation of STO from stock transfers and local sales from the foreign warehouse.
Read the guideVAT OSS in dropshipping
Analysis of the supply chain and the choice between OSS, IOSS and local VAT.
Read the guideVAT OSS and the marketplace
Cases in which a platform may be considered a supplier for VAT purposes.
Read the guideVAT OSS and B2B sales
Distinguishing the OSS procedure from WDT, WNT, place of supply and reverse charge.
Read the guideVAT OSS for B2C services
Services where the place of taxation may be in the country of the consumer.
Read the guideVAT OSS and INTRASTAT
Explanation of why the OSS procedure does not replace statistical obligations.
Read the guideInvoices, KSeF, JPK and cash register
The relationship between the OSS procedure and national documentation and record-keeping obligations.
Read the guideOSS or local VAT
Scenarios in which the procedure does not replace registration and declaration in another country.
Read the guideSME procedure and VAT OSS
Comparison of two separate solutions for cross-border VAT settlements.
Read the guideVAT charged at OSS
Ways to recover VAT on costs outside the OSS declaration.
Read the guideNon-Union OSS
Non-EU scheme for eligible B2C services provided by non-EU companies.
Read the guidePermanent place of business
The influence of the fixed establishment on the choice of the country of identification and the scope of OSS settlement.
Read the guideEU special territories
Areas that require a separate analysis of the territorial scope of EU VAT.
Read the guideGift cards and vouchers
Settlement of SPV and MPV vouchers and the moment of VAT liability.
Read the guideDo you have ESPO for several EU countries?
We help you organize your sales by shipping country, consumption country and VAT rate, and prepare your VIU-DO settlement.
WSTO and VAT OSS – FAQ
No. What matters is the buyer, the product, the direction of transport, the seller's involvement, and the absence of exclusions, not the online channel itself.
Yes. The threshold affects the place of taxation, not the definition of the transaction itself. Details on how to calculate it are provided in the OSS VAT limit.
It's possible if it meets the other requirements. The OSS settlement must indicate Germany as the country where the shipment originated.
No. This is a local sale because the goods do not move between two EU countries.
It may be subject to INTRASTAT after exceeding the appropriate statistical threshold. Check out the VAT OSS and INTRASTAT.
STO is a type of supply of goods. STO is a voluntary settlement procedure through which VAT due on qualified STO can be declared without VAT registration in each country of consumption.
Union OSS can be used, among other things, for qualified ESPO taxed in the country of arrival of the transport. The scope of all procedures is discussed in the main VAT OSS.
When a specific delivery passes all the qualification gates: it concerns goods, the movement takes place EU → another EU country, the recipient belongs to the correct category, the supplier is involved in the transport and no exclusion applies.
VAT OSS allows you to declare VAT in one country that is due in other countries of consumption on transactions covered by the selected procedure. This article only covers the qualification of VAT OSS; for a full scope, see the guide VAT OSS – what it is and how it works.
