From OSS Success to Single VAT Registration: How €125 Billion in VAT Revenue is shaping the Future of EU Compliance

Five years after the EU’s landmark e-commerce VAT reforms came into force, the EU   commission has reported more than €125 billion in VAT revenue has been collected through the One Stop Shop (OSS) and Import One Stop Shop (IOSS) regimes since their introduction on 1 July 2021. In 2025 alone, over €38 billion was reported through these simplified schemes, representing a 17% increase on the previous year, while more than 193,000 businesses had registered to use them.

These figures are more than a measure of tax collection. They represent a significant validation of the European Union’s strategy to modernise VAT administration, simplify cross-border trade, and create a more transparent tax environment for businesses operating across multiple Member States. They also provide a clear indication of the direction of travel for VAT compliance under the EU’s forthcoming VAT in the Digital Age (ViDA) reforms.

A successful reform with Tangible Results

The 2021 e-commerce VAT package was designed to address two longstanding challenges: reducing VAT fraud in cross-border transactions and simplifying VAT obligations for businesses selling goods and services across the EU. Through OSS and IOSS, businesses gained the ability to register in a single Member State and report VAT due in multiple jurisdictions through one electronic return.

The Commission’s latest report suggests that the reforms have largely achieved their objectives. The strong growth in VAT declared through OSS and IOSS demonstrates increasing adoption by businesses, while the substantial revenue collected indicates improved compliance and greater visibility for tax authorities.

Perhaps most importantly, the success of these schemes has shown that VAT can be administered centrally while still ensuring accurate allocation of revenue between Member States. This has given policymakers confidence to pursue the next stage of VAT reform across the EU.

Why this matters for ViDA

A key component of ViDA is the expansion of the OSS framework and the introduction of measures that will move businesses closer to a Single VAT Registration (SVR) model. Future reforms under ViDA will broaden the scope of OSS to include additional business-to-consumer transactions and introduce a special scheme covering transfers of a company’s own goods between Member States.

For businesses, this development is particularly significant. Today, many organisations maintain multiple VAT registrations across Europe because they store inventory in several countries, move stock across borders, or undertake domestic transactions requiring local VAT registration. Under the ViDA framework, many of these obligations are expected to be managed through an expanded OSS model, reducing the need for multiple registrations and moving closer to the concept of “register once, report everywhere”.

 Simplification Does Not Mean Less Compliance

While the direction of travel is towards simplification, businesses should not assume that compliance requirements will diminish. In reality, VAT compliance is evolving rather than disappearing.

Historically, VAT compliance has focused heavily on managing local registrations and periodic returns after month end cycles.  Under ViDA, the emphasis will increasingly shift towards digital reporting, transaction-level accuracy, e-invoicing, and real-time or near real-time tax authority visibility. As a result, organisations will need stronger internal controls, better data quality, and more sophisticated VAT determination & VAT compliance solutions.

The future VAT landscape will reward businesses that can demonstrate accurate tax determination, automated VAT compliance solutions, robust governance processes, and reliable audit trails across every transaction. Those relying on manual interventions and spreadsheet based processes will struggle as the move to real time will likely result in any issue to be flagged in near real time also so no time to correct.

What Businesses Should Be Doing Now

The Commission’s report should serve as a catalyst for organisations to assess whether they are truly prepared for the next phase of VAT compliance.

The first priority is to perform a comprehensive review of VAT data quality. As VAT reporting becomes more digital, inaccurate master data, incorrect tax codes, and inconsistent transaction treatment can quickly become significant compliance risks with high financial exposure. Businesses should assess how VAT is currently determined, recorded, and reported across their ERP systems and finance processes.

Secondly, organisations should evaluate their existing VAT registration footprint across the EU. Understanding why registrations exist today will help identify opportunities to benefit from future Single VAT Registration initiatives as ViDA is implemented. Many businesses may discover that registrations maintained for inventory movements or specific transaction types could eventually be simplified through an expanded OSS framework.

Automation should also be high on every finance and tax leader’s agenda. A modern VAT compliance framework should include automated VAT determination, automated VAT compliance checks & controls on live transactional data, exception management workflows, and centralised reporting capabilities. Automation not only reduces compliance risk but also improves consistency, scalability, and operational efficiency.

Businesses should assess whether their technology landscape can support, transaction-level reporting, digital audit trails, and evolving regulatory reporting obligations. Delaying these investments may create implementation challenges as Member States roll out ViDA-related requirements over the coming years.

Finally, organisations should develop a broader tax technology strategy. Leading businesses are increasingly viewing VAT compliance as a technology and data challenge rather than simply a tax filing exercise. Investment in integrated tax technology platforms, centralised VAT reporting, continuous controls monitoring, and advanced analytics will become critical differentiators in a more digital VAT environment.

 Looking Ahead

The Commission’s €125 billion milestone highlights the success of the EU’s e-commerce VAT reforms and confirms that simplified, centralised VAT reporting can work at scale

More importantly, it provides a glimpse of what the future may hold. OSS has proven that businesses can report VAT through a single framework while tax authorities maintain effective oversight. ViDA and Single VAT Registration are the logical next steps in that evolution.

For businesses, the message is clear: the future of VAT compliance will be increasingly digital, data-driven and automated.  Organisations that invest now in robust VAT governance, high-quality data and scalable compliance technology solutions like Meridian’s ARCO Tax Determination and ARCO Compliance solutions will be best positioned to benefit from simplification opportunities while meeting the demands of a rapidly evolving regulatory landscape.

For more information or if you are interested in a demo to see how our products could support you, please contact us via our website www.meridianglobalservices.com.