Cyprus VAT and OSS for Digital Services 2026: One Return for 27 Countries, and How We Set It Up Right

Status as of 29 October 2026: based on Council Directive 2006/112/EC as amended by Directive (EU) 2017/2455, Directive (EU) 2022/542 and Directive (EU) 2025/516, Council Implementing Regulation (EU) No 282/2011, the European Commission's One Stop Shop guidance, the Cyprus Value Added Tax Law 95(I)/2000 as amended, the Cyprus Income Tax Law 118(I)/2002 as amended by Law 244(I)/2025, the German Foreign Tax Act and Fiscal Code, and the Romanian Fiscal Code. We will update this guide when the law or official practice changes.

The first sale from abroad always feels like a small miracle. A stranger in Lisbon pays for your course while you sleep. A dentist in Munich subscribes to your software. A student in Cluj buys your e-book. Then a second thought arrives, less pleasant: each of those countries has its own VAT rate, its own tax office and its own appetite. Twenty-seven tax administrations, and every one of them expects you, a private entrepreneur, to collect its tax for free, on time, in the right amount, with proof of where every buyer sits.

That is the part nobody advertises. VAT is a tax on your customers that the state makes you collect, account for and defend, without pay and under threat of penalties. You become an unpaid clerk for governments you never chose, in countries where you have never set foot.

For years only the large platforms handled this calmly. They had VAT departments, software that recognised every buyer's country, and advisers in every capital. A founder alone had two options: ignore the rules and hope, or drown in registrations. Now there is a third way. The European Union's One Stop Shop lets one company, from one country, file one quarterly return for all 27 member states. Run from a Cyprus company that is built correctly, it turns a maze into a routine. Until now, the big ones did this with whole teams. Now you can too, through ENCC. This guide explains how VAT on digital services works in 2026, where your Cyprus company fits, what your home country will check, and how we set everything up so it stands up to every audit.

The key points

• Where your customer lives decides the VAT. For business customers in another EU country, the customer accounts for the VAT under the reverse charge. For private consumers, telecommunications, broadcasting and electronically supplied services are taxed where the consumer lives.
• The EUR 10,000 threshold. A company established in only one member state, whose cross-border sales of these services and distance sales of goods to EU consumers stay below EUR 10,000 a year in total, may charge its home VAT. Above it, the customer's country applies.
• One return for 27 countries. The Union One Stop Shop lets your Cyprus company declare and pay the VAT of every EU country through the Cyprus portal, in one quarterly return, without registering in each country.
• Proof of location. You need evidence of where each consumer sits. As a rule two non-contradictory pieces; below EUR 100,000 of such sales, one piece from a third party can be enough.
• App stores and marketplaces. When you sell through a platform that controls the payment and the terms, the platform is usually treated as the seller to the consumer. You then supply the platform.
• Cyprus VAT number first. The Union scheme runs on the company's Cyprus VAT number. We register it in the right order, so the first sale is already covered.
• The company behind it. The Cyprus company must really be managed from Cyprus. Corporate tax is 15% from 2026, and if you live in Cyprus as a Non-Dom, dividends carry no SDC.

Key terms, in plain words

VAT. Value added tax, charged on the price your customer pays. In theory the customer bears it; in practice you calculate it, collect it, file it and answer for it.

B2B and B2C. B2B means you sell to a business that is registered for VAT. B2C means you sell to a private person, or to anyone who does not give you a valid VAT number for business use.

Electronically supplied services. Services delivered over the internet, largely automated, with minimal human intervention: software as a service, downloadable apps, e-books, recorded courses, digital subscriptions, online games, website hosting and similar. The EU defines them in Article 7 of Implementing Regulation 282/2011 and lists examples in its Annex I.

Place of supply. The country whose VAT applies. It is not where you are, and not where your server is. It is decided by the rules of the VAT Directive.

Reverse charge. In a B2B sale across EU borders, you invoice without VAT and your customer accounts for it in its own country.

OSS. The One Stop Shop. An electronic portal that lets you declare and pay VAT due in other EU countries through your own tax administration. The Union scheme is for businesses established in the EU; the non-Union scheme is for businesses established outside it; the import scheme covers low-value goods.

Member state of identification. The country where you are registered for the OSS, here Cyprus. Member state of consumption is the country where your customer lives.

What counts as a digital service, and what does not

This is the distinction that decides everything else. Get it right on day one and the rest of the system becomes predictable.

The special B2C rule covers three families: telecommunications services, radio and television broadcasting, and electronically supplied services. For most of our clients, the third family is the one that matters. The test in Article 7 of Regulation 282/2011 is simple to state: the service is delivered over the internet or an electronic network, its nature makes it essentially automated, it involves minimal human intervention, and it could not be provided without information technology.

What usually falls inside: a subscription to your software platform; an app downloaded from your site; access to a library of recorded video lessons; an e-book or a template pack delivered automatically after payment; a membership area with pre-recorded content; online storage; a digital tool that generates reports without anyone touching them.

What usually falls outside: a one-to-one coaching session over video, where your knowledge is the service and the internet is only the channel; legal, tax or design advice sent by email; a programmer writing custom code for a client; a physical book you ship. The regulation itself says that where the internet is merely the means of communication between you and the customer, the service is not electronically supplied.

Since 1 January 2025 there is one more nuance that many course creators missed. Live-streamed or otherwise virtual events, such as an online seminar, a live workshop or a streamed conference, sold to private persons, are taxed where the consumer is established, lives or usually resides. Directive (EU) 2022/542 changed Article 54 of the VAT Directive for exactly this. In practice, your live webinar sold to consumers in ten countries is now treated very much like your recorded course: destination VAT, which the OSS can carry.

Why this matters: if your service is not electronically supplied and not a virtual event, the general B2C rule applies, and the VAT is usually the VAT of the country where your business is established. A Cyprus company selling one-to-one consulting to private clients in Germany then charges Cyprus VAT, not German VAT, and the OSS plays no role for that income. Mix the two up and you either overpay one country or underpay another. Both are expensive.

The classification is not a formality. It is the foundation we lay before your first invoice. If your offer mixes products, tell us what you sell and we map each line.

Who gets the VAT: the place-of-supply rules

Once you know what you sell, the rules for who receives the VAT are clear, and you can price with confidence.

Business customers in another EU country. Article 44 of the VAT Directive places a B2B service where the customer is established. Your Cyprus company invoices without VAT, states that the reverse charge applies, and your customer accounts for the VAT in its own return under Article 196. You check the customer's VAT number in the EU's VIES system and keep the result. The OSS has nothing to do with these sales. They go into your Cyprus VAT return and into a separate monthly recapitulative statement.

Private consumers in another EU country. Article 58 places telecommunications, broadcasting and electronically supplied services where the consumer is established, has a permanent address or usually resides. The VAT of that country applies, at its rate. A German consumer means German VAT, currently 19% as standard. A Romanian consumer means Romanian VAT, 21% as standard since 1 August 2025. A consumer in Cyprus means Cyprus VAT, 19% as standard.

Customers in Cyprus. Business or private, they pay Cyprus VAT on your invoice. If the customer is a Cyprus business, it may recover it.

Customers outside the EU. Electronically supplied services to consumers outside the EU fall outside EU VAT, because the place of supply is outside the Union. That does not mean the world is silent. Many countries now ask foreign sellers of digital services to register locally once they cross a threshold. Singapore, for example, requires an overseas vendor with a global turnover above SGD 1 million and B2C digital sales to Singapore above SGD 100,000 to register for its 9% GST. We check your largest non-EU markets with you, so nothing surprises you later. Our guide to Hong Kong or Singapore for your company shows how those markets think.

The rule is not where you are. It is where your customer is. Build your system around that, and VAT stops being a threat. Want us to check your mix? Write to us.

The EUR 10,000 threshold: your small-seller lane

Below the threshold you keep life simple. Above it, the OSS keeps life simple. Either way you are covered, as long as you know which side you are on.

Article 59c of the VAT Directive gives small sellers a lane. If your company is established in only one member state, and the total value of two kinds of sales stays at or below EUR 10,000 in the current and in the preceding calendar year, the place of supply for your B2C digital services stays in your own country. The two kinds are: telecommunications, broadcasting and electronically supplied services to consumers in other member states, and intra-EU distance sales of goods. The amount is counted without VAT, and it is one combined figure for all EU countries together, not EUR 10,000 per country.

In practice: a Cyprus company that sold EUR 6,000 of online courses to consumers in other EU countries last year, and is on track for EUR 8,000 this year, can charge Cyprus VAT on those sales and declare them in its Cyprus VAT return.

The threshold works like a door that closes behind you. The moment your sales in the current year exceed EUR 10,000, the place of supply moves to the consumer's country from the sale that crosses the line, not from the next quarter or the next year. The sale that exceeds the threshold already carries the VAT of the customer's country. And because the test also looks at the preceding year, once you have crossed it in one year, the destination rule applies to the whole of the next year as well.

You may also opt out of the lane voluntarily, and choose destination VAT even below the threshold. The choice binds you for at least two calendar years. Why would anyone do that? Because a company that plans to grow quickly prefers to run one system from the start rather than switch in the middle of a busy quarter, and because some prices are designed to be the same in every country, which is easier when the system is the same everywhere.

We set the threshold alarm before you need it, so the switch happens on the right sale, not in a panic. Ask us which lane fits your plan.

The One Stop Shop: one return for the whole Union

This is the tool that turns 27 tax offices into one. Your company files in Cyprus, in one place, and Cyprus distributes the money.

The Union scheme of the OSS exists since 1 July 2021, when Directive (EU) 2017/2455 extended the earlier mini one stop shop. A business established in the EU registers for it in its own member state, here Cyprus, through the national OSS portal of the Cyprus Tax Department. The Union scheme uses the company's existing Cyprus VAT number. No new number is issued, and no registration in Germany, Romania or any other member state is required for the sales the scheme covers.

When the registration takes effect. As a rule, from the first day of the calendar quarter after the request. There is a useful exception in Article 57d of Regulation 282/2011: if your first qualifying sale happens earlier, the scheme can apply from the date of that sale, provided you inform Cyprus by the tenth day of the month after it. We plan this so that your first cross-border consumer sale is already inside the scheme.

The quarterly return. One return per calendar quarter, in euro, listing for each member state of consumption the sales, the rates applied and the VAT due. The deadlines are the last day of the month after the quarter: 30 April, 31 July, 31 October and 31 January. They do not move for weekends or public holidays. A return is due even for a quarter without sales, as a nil return.

Payment. The VAT is paid to Cyprus by the same deadline, with the reference of the return. The Cyprus Tax Department forwards each country's share. Penalties and interest for late payment, and any audit questions, can come from each member state of consumption under its own law. The European Commission publishes a table of what each country applies, and we keep it in view.

Corrections. Mistakes found after filing are corrected in a later return, within three years from the original deadline, not by amending the old one.

Records. Article 369k of the VAT Directive requires records of the transactions under the scheme to be kept for ten years from the end of the year of the transaction, and to be made available electronically to any member state that asks. Ten years is longer than most founders expect. Your system must be built for it from the start.

What the OSS does not cover. Input VAT. The OSS return only collects tax; it does not refund the VAT you paid on your own costs. Input VAT incurred in Cyprus goes into your Cyprus return. Input VAT from other member states is claimed through the EU refund procedure, not the OSS.

One filing instead of twenty-seven. That is not a loophole. It is the law working for you for once. For the company behind the filing, see our guide to a Cyprus company without residency.

Proving where your customer is

The tax offices will not ask whether you charged VAT. They will ask how you knew the rate. We make sure the answer is already in your files.

For B2C digital services, the whole system rests on the customer's location. Articles 24a to 24f of Regulation 282/2011 tell you how to establish it.

Special situations come first. If the service is consumed at a place that requires the customer's physical presence, such as a Wi-Fi hotspot, a café or a hotel, the customer is presumed to be where that place is. If it is delivered through a fixed landline, the place of the landline counts. If it is delivered through a mobile network, the country code of the SIM card counts. These presumptions are in Articles 24a and 24b.

The general rule for everything else. For an online sale, the location is presumed from two pieces of evidence that do not contradict each other. Article 24f lists the usual ones: the billing address of the customer; the IP address of the device used; the location of the bank account used for payment or the billing address held by that bank; the mobile country code of the SIM card; the location of a fixed landline; and other commercially relevant information. Two items that point to the same country are enough.

The small-seller simplification. If your company is established in one member state and its cross-border B2C sales of these services stay at or below EUR 100,000 in the current and preceding year, one piece of evidence can be enough, provided it comes from a person involved in the supply other than you or the customer, for example the payment provider's data on the card's issuing country. Above EUR 100,000, you are back to two pieces.

When the evidence contradicts itself. A buyer with a German billing address who pays with a Spanish card from a French IP address is not rare. The presumption can then be rebutted by the tax office with three items of evidence, and you yourself can rebut it as well. Our partners design a rule in your checkout that records several items, picks the country by a written policy and stores the reasoning with the invoice.

Platforms and app stores. Article 9a of Regulation 282/2011 says that when a digital service is supplied through a telecommunications network, an interface or a portal such as an app store, the operator of the platform is presumed to be acting in its own name, and therefore to be the supplier to the consumer. The presumption is rebutted only when you are explicitly named as the supplier in the contract, on the bill and in the customer's receipt, and the platform does not authorise the charge, the delivery or the general terms. For most app developers this is good news. The store charges the consumer, applies the consumer's VAT and pays you. Your company then supplies the store, which is usually a B2B service under the reverse charge. Your OSS return becomes smaller; your evidence work moves to the platform.

The same logic applies to many online course platforms and digital marketplaces, but not to all of them. Payment processors that only collect money on your behalf are not platforms in this sense. We read the terms of each platform you use, decide who the supplier is and write it down.

Evidence is your protection. Without it, every sale is an open question; with it, every sale is closed. Let us check your checkout.

Cyprus VAT registration: how we do it right for you

The OSS rides on a Cyprus VAT number. We put the number in place first, in the right order, so nothing has to be repaired later.

The national threshold. A business established in Cyprus must register for VAT when its taxable supplies in Cyprus, plus certain supplies with a right of deduction, exceed EUR 15,600 in the past 12 months, or are expected to exceed it in the next 30 days. Services you buy from abroad and on which you account for VAT under the reverse charge count towards that threshold. So does a lot of the software, advertising and freelance work that digital businesses buy from other countries.

B2B services to other EU countries. A Cyprus company that supplies services to businesses in other member states under the reverse charge must be registered for VAT in Cyprus, whatever the amount, so that it can file the recapitulative statement. Most digital businesses have at least some B2B customers in the EU, so in practice they register from the start.

Voluntary registration. Where the company's sales in Cyprus are below EUR 15,600 but it makes supplies that carry a right of deduction, it can usually register voluntarily, which also makes the Union OSS available. Our licensed partners assess which basis applies to your company and file accordingly.

How it is filed. Through the Tax For All portal of the Cyprus Tax Department, with the company's registration documents, the description of the activity and evidence that the business is real: contracts, website, first invoices or a business plan. The questions asked are the questions any careful tax office asks. A real company with real substance answers them easily.

The Cyprus VAT return. Filed quarterly as standard, by the tenth day of the second month after the end of the quarter. It covers sales taxed in Cyprus, B2B services to other member states, reverse-charge purchases and input VAT. It is separate from the OSS return.

The recapitulative statement. For B2B services to customers in other member states, a VIES statement is filed monthly through the same portal, by the 15th of the following month.

Penalties, as of October 2026. Cyprus applies a charge of EUR 85 for each month that a required registration is not notified, fixed charges for late returns and late VIES statements, and additional tax plus interest on late payment. As a member state of consumption under the OSS, Cyprus lists a charge of EUR 100 per late OSS return and 10% additional VAT. Other member states have their own scales. The point is not the size of each fine. The point is that a system built correctly never pays them.

Registration first, sales second. That is how a business that intends to last is built. For the bank side of the same company, read our guide to a Cyprus business bank account.

The company behind the VAT: substance and management in Cyprus

A VAT number is only as solid as the company that holds it. We build the company so that every tax office sees a real business in Cyprus.

Every member state can look at your OSS returns, and each of them may ask one question in the end: is this Cyprus company really established in Cyprus? If its management, its decisions and its people are elsewhere, a tax office can argue that the business has a fixed establishment, or even its real seat, in another country. Then the VAT, the corporate tax and the OSS registration itself can be questioned.

The answer is substance. The Cyprus company is managed and controlled in Cyprus: board meetings in Cyprus, minutes that record real decisions, a majority of directors who take those decisions there, a registered office, a Cyprus bank account and, as the business grows, people who work there. The company is tax resident in Cyprus when its management and control is exercised in Cyprus, and from 2026 it pays corporate tax at 15% on its profit. If you live in Cyprus yourself and hold Non-Dom status, dividends you receive from it carry 0% SDC, with GESY at 2.65% (capped).

Our partners build this with you step by step, matched to the size of your business. A one-person software company is measured on a different scale from a bank: what counts is a credible, documented decision-making process in Cyprus. A company with EUR 2 million of sales needs more. We scale substance with the business, not with fear.

For the detailed rules, see our guide to the place of effective management in Cyprus and, if your product is software you develop yourself, our guide to the Cyprus IP Box.

Substance is not decoration. It is the reason your structure holds when someone examines it. Tell us where you are today.

If you live in Germany: how we keep the Finanzamt satisfied

The German tax office will look at two things: where your company is really run, and how much tax its income bears. We answer both in advance.

Place of management. Under § 10 of the German Fiscal Code, the place of management is the centre of top-level commercial direction. If you live in Germany and run the Cyprus company day to day from your desk in Germany, the Finanzamt can argue that its place of management is in Germany. The company would then be subject to German corporate tax and trade tax on its worldwide profit, and the Cyprus structure would add cost instead of removing it. Our solution: either you move to Cyprus, or the company is genuinely run by directors in Cyprus while you act as shareholder, with clear limits on what you decide alone from Germany.

CFC rules. If persons resident in Germany control a foreign company, its passive income may be added to their German income when it bears income taxes of less than 15% (§§ 7 and 8 of the Foreign Tax Act, threshold lowered to 15% from 2024). Cyprus's corporate tax rate is 15% from 2026, which is not below the threshold as such. But the test looks at the actual burden on the relevant income. Where deductions push it below 15%, and the service income counts as passive, for example because the services are performed with the participation of a German-resident shareholder, the rule can apply. We check the actual burden every year, and design who performs the services and where.

Exit tax. If you hold shares in a company today and plan to move to Cyprus, German exit tax can apply to those shares. We plan the order with your German adviser. See our guide to German exit tax and Cyprus.

VAT on your German customers. Your German consumers pay German VAT at 19%, declared through the Cyprus OSS. German business customers receive reverse-charge invoices. The German Federal Central Tax Office sees the data that Cyprus forwards; there is nothing to hide, and nothing hidden.

Germany will check. A well-built structure is checked and stands. Ask us how we prepare yours.

If you live in Romania: how we keep ANAF satisfied

ANAF will also ask where the company is really managed. We make sure the honest answer is Cyprus.

Residence of the company. Under the Romanian Fiscal Code, a foreign legal person whose place of effective management is in Romania is a Romanian tax resident. A Cyprus company run from your living room in Bucharest can therefore be taxed in Romania as if it were Romanian. The treaty between Romania and Cyprus has its own rules for companies that seem resident in both countries. The safest path is the same as in Germany: real management in Cyprus, or your own move.

CFC rules. The Romanian controlled foreign company rule, in articolul 40⁵ of the Fiscal Code, applies to Romanian corporate taxpayers that control a foreign entity. An individual who owns the Cyprus company directly is not caught by that article. A Romanian SRL that owns it can be, and then the 15% Cyprus rate and the type of income matter. We choose the shareholder accordingly.

Dividends. If you remain resident in Romania and take dividends from the Cyprus company, Romania taxes them at 16% from 2026, with credit for any foreign tax, and health contributions may apply. If you move to Cyprus and become Non-Dom, the dividends carry 0% SDC in Cyprus. The move itself is a project with its own steps; our relocation guide shows the order.

VAT on Romanian customers. Romanian consumers pay Romanian VAT, 21% as standard since 1 August 2025, declared through the Cyprus OSS. The Romanian VAT exemption for small businesses, raised to RON 395,000 from September 2025, belongs to Romanian businesses; it does not change the rules for your Cyprus company.

Romania has its rules, Cyprus has its rules, and we make them fit together. Tell us your situation.

What changes next: VAT in the Digital Age

The rules keep moving. A system built correctly today is the easiest one to adapt tomorrow.

On 11 March 2025 the EU adopted the VAT in the Digital Age package, including Directive (EU) 2025/516. Three changes matter for digital businesses. From 1 July 2028 the OSS will cover more types of B2C supplies, which means fewer separate registrations. From the same date, platforms that facilitate short-term accommodation rentals and passenger transport by road will in many cases become deemed suppliers. And from 1 July 2030, cross-border B2B transactions inside the Union move to mandatory electronic invoicing and near-real-time digital reporting. The European Commission has already published OSS guidelines revised for 1 January 2027.

What this means for you: invoices, evidence and customer data have to be digital, structured and complete. The founders who treat VAT as a system today will adapt by updating the system. The founders who treat it as a nuisance will rebuild from zero.

Prepare once, adapt calmly. That is the difference between a business and a reaction. Let us look at your system.

How we do it: the sequence

Here is the path, step by step. Each step has a reason, and the order is the protection.

1. The map. You describe your products, prices, customers by country, platforms and payment providers. We classify each product: electronically supplied service, virtual event, other service or goods.
2. Where you live. We look at your residence and plans. If you stay in Germany or Romania for now, we design the management of the company accordingly. If you move, we plan the order of the move and the company.
3. The company. Our licensed Cyprus partners form the company, appoint the directors, set up the registered office and prepare the board's decision-making process in Cyprus.
4. The bank and the payment providers. The company opens its business account and connects the payment providers whose data will later serve as location evidence.
5. VAT registration. The partners register the company for Cyprus VAT on the right basis, then for the Union OSS, timed so that the first cross-border consumer sale is covered.
6. The checkout. Your shop or platform records at least two pieces of location evidence, applies the right rate by country, validates VAT numbers of business customers in VIES and issues compliant invoices.
7. The threshold alarm. If you start below EUR 10,000, the system watches the running total and switches to destination VAT on the sale that crosses it.
8. The calendar. Quarterly OSS returns and payments, quarterly Cyprus VAT returns, monthly VIES statements, the corporate tax return and the audit. Each deadline has an owner.
9. The annual review. Once a year we review the actual tax burden, the substance, the evidence quality and the law, and adjust.

Nine steps, one direction: a business that sells to the whole of Europe and answers to every tax office calmly. Start with step one.

The most common errors

Every error below costs money. Each one is avoided by a decision made early.

• Charging Cyprus VAT to every consumer after crossing EUR 10,000. The threshold is one total for all EU countries. Once it is crossed, the sale that crosses it already carries destination VAT.
• Treating live coaching as a digital service, or a recorded course as consulting. The classification decides the country. A mixed offer needs a split.
• Forgetting the nil return. No sales in a quarter still means a return. Repeated failures can lead to exclusion from the scheme.
• Keeping one piece of evidence when two are required. Below EUR 100,000 one third-party item may do; above it, it will not.
• Assuming the app store handles everything. It usually does for sales through the store. It does not for direct sales from your website.
• Running the company from home. A Cyprus company managed from Germany or Romania invites a debate about where it is really resident.
• Using the OSS for B2B sales. B2B sales go under the reverse charge in the Cyprus return and the VIES statement, not into the OSS.
• Forgetting the non-EU markets. Large sales to consumers in countries outside the EU can trigger local registrations there.
• Deleting old data. The records must be available for ten years.

Errors are cheaper to prevent than to repair. That is why the order matters. Ask us before you launch.

Three illustrations

These are illustrations of how the rules apply, not real clients.

Lena, course creator, from Hamburg to Limassol. Lena sells recorded courses on photography. Last year she sold EUR 4,000 to consumers outside Germany. She moves to Cyprus in spring, her Cyprus company takes over the courses, registers for Cyprus VAT and, since she plans a launch campaign across Europe, opts for destination VAT and the Union OSS from the start. In the first quarter after launch, she sells to consumers in 14 countries. One return, one payment, one portal. Her live monthly workshop for consumers is taxed in each buyer's country as a virtual event and goes into the same OSS return.

Andrei, mobile app developer, Timisoara. Andrei's app is sold only through the two big app stores. The stores are the suppliers to the consumers and apply the consumers' VAT. His Cyprus company invoices the stores; those are B2B services under the reverse charge, in the Cyprus VAT return and the VIES statement. He is preparing his move to Cyprus; until then, the company is run by two directors in Larnaca and he does not sign contracts from Romania.

Markus and Selin, SaaS founders, Munich. Their platform for clinics sells mostly B2B, with a growing B2C plan for therapists who are not registered for VAT. The Cyprus company has three employees in Nicosia and a board that meets there. B2B sales go under the reverse charge; B2C sales go through the OSS. The checkout captures the billing address and the card country and checks the IP address. When the evidence conflicts, a written rule decides and stores the reasoning.

Three different businesses, one principle: the law already contains a calm way to sell to Europe. Your job is to use it correctly. Which one are you? Tell us.

The circle you join

You are not the first to choose this path, and you will not walk it alone.

Our clients are founders, creators, developers and consultants from Germany, Austria, Romania and across Europe who decided that what they build should serve them and their families first. Some already live in Cyprus; others are preparing the move. They sell to dozens of countries from one company, and they want their days spent on the product, not on the tax offices of 27 states.

ENCC coordinates. Licensed Cyprus law firms, accountants, tax advisers and auditors, engaged by you directly, do the regulated work in their own name. We make sure the pieces fit, the order is right and nothing falls between the cracks.

This is the circle of people who build, sell across borders, and keep what they build. The door is open: join us.

FAQ

What is the OSS threshold for digital services in 2026?

EUR 10,000 a year, without VAT, as one total for all EU countries together. It covers B2C telecommunications, broadcasting and electronically supplied services to other member states plus intra-EU distance sales of goods. Below it, a company established in one member state may charge its home VAT; above it, the customer's country applies.

Does my Cyprus company need a VAT number to use the OSS?

Yes. The Union scheme uses the company's Cyprus VAT number. Our licensed partners register the company for Cyprus VAT on the correct basis first, then for the OSS.

When are OSS returns due?

Quarterly, by 30 April, 31 July, 31 October and 31 January. The deadlines do not move for weekends or holidays, and a nil return is required for quarters without sales.

Is a live online workshop a digital service?

Not in the strict sense, but since 1 January 2025 live-streamed and virtual events sold to consumers are taxed where the consumer lives. The VAT result is similar, and the OSS can carry it.

I sell through app stores. Do I still need the OSS?

Usually not for those sales. The store is presumed to be the supplier to the consumer and applies the VAT. Your company supplies the store. Direct sales from your own website remain your responsibility.

What evidence do I need of the customer's location?

As a rule, two non-contradictory pieces, such as billing address, IP address, the bank or card country and the SIM country code. Below EUR 100,000 of cross-border B2C sales, one piece from a third party, such as the payment provider, can be enough.

Can I run my Cyprus company from Germany or Romania?

Running it day to day from there creates a real risk that the company is treated as resident there. The safe paths are real management in Cyprus by directors who decide there, or your own move.

How is the money taxed once it is in the company?

Cyprus corporate tax is 15% from 2026. If you live in Cyprus as a Non-Dom, dividends carry 0% SDC, with GESY at 2.65% (capped). If you live elsewhere, your home country taxes the dividends under its own rules.

What does ENCC do, and what do the partners do?

We coordinate: the plan, the order, the communication and the quality check. Licensed Cyprus lawyers, accountants, tax advisers and auditors that you engage directly do the formation, registrations, filings and audits, under their own responsibility.

Next steps

Write down three things: what you sell and through which channels, where your customers are, and where you live now and want to live. With that, one conversation is enough to tell you which path fits and what comes first. For background, see our guides to a Cyprus company without residency, the place of effective management and salary or dividend in Cyprus.

Sources

• Council Directive 2006/112/EC on the common system of VAT, consolidated (EUR-Lex), Articles 44, 45, 54, 58, 59c, 196, 358 to 369k: https://eur-lex.europa.eu/eli/dir/2006/112/oj
• Council Directive (EU) 2017/2455 (e-commerce VAT package), EUR-Lex: https://eur-lex.europa.eu/eli/dir/2017/2455/oj
• Council Directive (EU) 2022/542 (rates and virtual events), EUR-Lex: https://eur-lex.europa.eu/eli/dir/2022/542/oj
• Council Directive (EU) 2025/516 (VAT in the Digital Age), EUR-Lex: https://eur-lex.europa.eu/eli/dir/2025/516/oj
• Council Implementing Regulation (EU) No 282/2011, consolidated, Articles 7, 9a, 24a to 24f, 57d and Annex I: https://eur-lex.europa.eu/eli/reg_impl/2011/282/2025-04-14/eng
• European Commission, VAT One Stop Shop portal: https://vat-one-stop-shop.ec.europa.eu/one-stop-shop_en
• European Commission, OSS guidelines revised for 1 January 2027: https://vat-one-stop-shop.ec.europa.eu/document/download/55f4ec9d-83e6-4942-9e8d-11d44c243087_en?filename=OSS%2BGuidelines_revised_1Jan2027_0.pdf
• European Commission, VAT in the Digital Age: https://taxation-customs.ec.europa.eu/taxation/vat/vat-digital-age-vida_en
• Cyprus Tax Department, One Stop Shop: https://www.mof.gov.cy/mof/tax/taxdep.nsf/taxOSS_en/taxOSS_en
• Cyprus Tax Department, OSS VAT return guide, February 2026: https://www.gov.cy/media/sites/167/2026/02/OSS-VAT-Return-Guide.pdf
• Cyprus Tax Department, VIES: https://www.mof.gov.cy/mof/TAX/taxdep.nsf/page21_en/page21_en?opendocument=
• Cyprus Tax For All portal: https://taxforall.mof.gov.cy/
• Cyprus Income Tax (Amending) (No. 4) Law 244(I)/2025 (CyLaw, Greek): https://www.cylaw.org/nomoi/arith/2025_1_244.pdf
• German Foreign Tax Act, § 8 AStG: https://www.gesetze-im-internet.de/astg/__8.html
• German Fiscal Code, § 10 AO: https://www.gesetze-im-internet.de/ao_1977/__10.html
• ANAF, VAT rate changes under Law 141/2025: https://static.anaf.ro/static/10/Anaf/AsistentaContribuabili_r/Cotele_de_TVA_09.2025.pdf
• Romanian Government Ordinance 22/2025 amending the Fiscal Code (small enterprises): https://legislatie.just.ro/Public/FormaPrintabila/00000G200MPJKX1XIT11W5Q67ATS4020
• ANAF, summary of 2026 tax changes (dividend tax 16%): https://static.anaf.ro/static/10/Brasov/Brasov/modificari_fiscale_2026.pdf
• IRAS, overseas businesses supplying remote services to Singapore: https://www.iras.gov.sg/taxes/goods-services-tax-(gst)/gst-and-digital-economy/overseas-businesses

Verified on 29 October 2026.

Cover photo: Larnaca Marina, Cyprus. Photo: A.Savin, Wikimedia Commons, Free Art License 1.3, cropped.