OSS VAT for dropshipping helps Spanish online sellers report cross-border B2C sales in one return, but you still need local VAT registration when stock is held locally or domestic supplies occur. A Spain-based dropshipping brand selling via Shopify and a non-Amazon marketplace used Union OSS in Spain and a clear decision flow to stay compliant while suppliers shipped from Poland and Germany—avoiding unnecessary local VAT registrations and knowing exactly when local IDs would still be required.
The Client
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Business model: EU B2C dropshipping (no own stock).
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Sales channels: Shopify store + one marketplace (not Amazon).
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Suppliers/ship-from: Poland (PL) and Germany (DE); suppliers may use their own local warehouses.
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Status: Above the €10,000 EU distance-selling threshold and registered for Union OSS in Spain.
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Goal: Confirm where OSS is enough and when local VAT registration is still required, given supplier warehousing and marketplace involvement.
This case study explains how OSS VAT for dropshipping applies when suppliers ship directly from Poland and Germany to EU consumers.
The Challenge
Even with OSS in Spain, dropshippers can accidentally create local VAT obligations when:
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Stock becomes your stock in another Member State (e.g., local fulfilment/consignment under your control).
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A sale becomes domestic (goods and customer in the same country) from your local stock.
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A marketplace acts as a deemed supplier, changing who accounts for VAT on B2C sales.
The client needed country-by-country clarity without slowing down operations. The main question was where OSS VAT for dropshipping ends and where local VAT IDs begin.
Many sellers assume that once they are registered for OSS VAT for dropshipping, everything is covered across the EU – but that is only true when goods move cross-border and no stock is held locally. This case study highlights the most common VAT risks for dropshippers and shows how to apply OSS VAT for dropshipping correctly so you avoid unexpected local VAT registrations.
The Solution (by hellotax)
Our phased plan clarified when OSS VAT for dropshipping covers sales and when domestic filings are required.
1) Map the supply chain & responsibilities
We documented, per supplier and per order flow:
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Incoterms used (e.g., EXW, DAP, DDP) to locate delivery and risk transfer.
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Physical ship-from location (warehouse address in PL/DE or elsewhere in the EU).
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Who is the legal seller on the consumer invoice (client vs. supplier vs. marketplace as deemed supplier).
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Evidence: transport proofs (CMR, tracking), supplier contracts, and invoices.
Why this matters: It determines whether a sale qualifies as an intra-EU distance sale via OSS or turns into a domestic sale requiring local VAT registration.
2) Clear rulebook: When OSS is enough vs. when local VAT is required
OSS is sufficient (report in Spain using destination-country VAT rates) if ALL are true:
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B2C sale within the EU.
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Goods move cross-border (Member State A → Member State B).
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You do not own/hold stock in the ship-from country (supplier ships their stock directly).
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Marketplace is not the deemed supplier (you remain the seller to the consumer).
Local VAT registration is required if ANY of these happens:
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Your own stock (or stock under your control/consignment) is stored locally in an EU country (e.g., DE/PL).
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You’ll have domestic sales from that country → local VAT ID + local returns (OSS does not cover domestic sales).
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You use a third-party fulfilment (not your supplier’s) where the goods become your stock before sale.
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You make domestic B2C sales in a country (goods and customer are in the same country, from your stock).
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Call-off/consignment stock arrangements where your goods are transferred in advance to another Member State.
3) Marketplace check: Deemed-supplier logic
We reviewed the marketplace terms:
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If deemed supplier applies (e.g., the platform is responsible for charging/collecting VAT to the consumer for eligible flows):
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You invoice the marketplace B2B.
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The marketplace accounts for consumer VAT.
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Do not report those orders in OSS.
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When a platform is a deemed supplier, those orders fall outside your OSS VAT for dropshipping return.
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If the marketplace is only an intermediary (no deemed-supplier role):
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You remain the seller to the consumer.
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Declare the sale via OSS (if cross-border and no local stock), using the destination VAT rate.
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4) Per-order decision flow (operational SOP)
Use this checklist to decide whether a sale belongs in OSS VAT for dropshipping or a local VAT return.
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Identify channel: Shopify or Marketplace
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If Marketplace → check deemed supplier flag for that order.
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Deemed supplier = YES → Invoice marketplace (B2B), exclude from OSS.
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NO → treat like a direct sale.
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Confirm ship-from country (supplier’s warehouse in PL/DE or elsewhere) and stock ownership
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If supplier’s stock (you never own stock locally) → move to OSS test.
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If your own/controlled stock in MS X → register locally in MS X; domestic VAT applies for local deliveries.
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OSS test for direct sales
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Cross-border B2C? Yes
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No local stock under your control? Yes
→ Report in OSS Spain with customer-country VAT rate. -
If No to either → local VAT in the relevant country.
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Keep evidence
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Transport docs, ship-from details, consumer destination, Incoterms, invoices, marketplace status.
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Implementation & Outputs
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Supplier data pack:
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Incoterms per lane, warehouse addresses (PL/DE), ownership & risk transfer points.
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Marketplace matrix:
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When platform acts as deemed supplier, which flows are covered, and how invoices must be issued.
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OSS vs. Local VAT playbook:
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Examples for PL→FR, DE→ES, and domestic DE/PL scenarios if stock becomes yours.
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Audit-ready archives:
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Contracts, order logs, CMR/tracking, VAT rate mappings for all EU destinations.
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Examples
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No local VAT ID needed
Supplier (PL) ships directly to consumer in France. You hold no stock in PL.
→ Report in OSS Spain at French VAT. -
Local VAT ID required (Germany)
You place your stock in a German 3PL for faster delivery. Orders to German consumers are domestic.
→ Register in Germany, charge German VAT, file local returns (these sales are outside OSS). -
Marketplace deemed supplier
Marketplace confirms it collects VAT on certain B2C flows.
→ You invoice the marketplace B2B; the marketplace accounts for consumer VAT.
→ Exclude those orders from OSS.
Book a free consultation
Our VAT experts are happy to help you. Book a free consultation today!
Results
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Clarity on where Union OSS applies vs. where local IDs are unavoidable.
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Zero double reporting: clear split between OSS, local returns, and marketplace-handled VAT.
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Lower risk: contracts/Incoterms and logistics evidence aligned for audit defence.
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Scalable process: a repeatable SOP for every new supplier, lane, or marketplace.
Lessons Learned for EU Dropshippers
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OSS is powerful but limited—it does not cover domestic sales from your local stock.
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Incoterms and ownership decide who is the seller and where the delivery occurs.
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Marketplaces can shift liability via the deemed-supplier rules—know their status per order.
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Maintain evidence (CMR, tracking, contracts), or your OSS treatment may be challenged.
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Revisit flows when adding 3PL/consignment—that’s where local VAT IDs pop up.
To deepen your understanding of how the One-Stop Shop (OSS) works and when it applies, the European Commission offers official guidance on the subject. Their page explains the rules, eligibility criteria, and reporting obligations under the OSS special VAT scheme:
Official EU-OSS VAT Special Scheme – European Commission
What hellotax Delivered
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Supply-chain VAT mapping (PL/DE warehouses to all EU destinations).
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OSS vs. local VAT decision framework and per-order checklist.
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Marketplace deemed-supplier assessment and invoicing redesign.
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Destination VAT-rate mapping and invoicing rules.
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Ongoing compliance support and configuration in the hellotax dashboard.
Book a free consultation
Our VAT experts are happy to help you. Book a free consultation today!
Key Takeaway
With clear rules, the team avoided double reporting and used OSS VAT for dropshipping only where eligible.
For Spanish dropshippers using OSS, you don’t need extra local VAT registrations as long as suppliers ship their stock cross-border directly to consumers.
You do need local VAT whenever your stock (or consignment) sits in another Member State and you make domestic deliveries from there.
Marketplaces can be deemed suppliers, removing those orders from your OSS—but only if their terms say so.
If you are running a cross-border dropshipping model, it’s important to understand how VAT rules apply when goods are shipped directly from the supplier to the customer. Many sellers assume that using OSS VAT for dropshipping is enough, but VAT compliance for dropshipping can become more complex when products are sourced from multiple EU countries or shipped through fulfilment partners. To help you stay compliant and avoid common mistakes, we recommend reading our full guide on VAT compliance for dropshipping, which explains how VAT works for different dropshipping setups and what sellers must track to remain compliant:
Ready to de-risk your EU dropshipping VAT?
hellotax will map your lanes, set up a clean OSS vs. local VAT split, and keep your filings audit-proof—while you continue to sell. Book your free consultation to map your flows and implement OSS VAT for dropshipping correctly.
To further understand how VAT rules apply in different dropshipping setups, take a look at another hellotax VAT case study for dropshippers. This real-life example can help you determine whether OSS VAT for dropshipping is sufficient to keep you covered or if you require an additional solution to maintain your peace of mind.
Book a free consultation
Our VAT experts are happy to help you. Book a free consultation today!
The post Case Study: Spanish Dropshipper Uses OSS and Avoids Local VAT Pitfalls Across the EU appeared first on Hellotax Blog.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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