Why They Apply and How to Avoid Them

Audience: hellotax clients using the EU VAT One‑Stop Shop (OSS) with Germany as the Member State of Identification (MSI)

This article explains why penalties may be applied to EU VAT OSS filings in Germany, what penalties may look like, and how to avoid them.

1. OSS and Germany’s role

If you are registered for the EU VAT OSS in Germany, the German Federal Central Tax Office (BZSt) is responsible for:

• Receiving your quarterly OSS returns
• Collecting your OSS VAT payments
• Applying German penalty and interest rules in case of non‑compliance

2. Common reasons OSS penalties are applied

a) Late filing of the OSS return

OSS returns must be submitted quarterly, by the end of the month following the quarter:

• Q1 → 30 April
• Q2 → 31 July
• Q3 → 31 October
• Q4 → 31 January

Even a short delay may trigger penalties or follow‑up actions.

b) Late or incomplete VAT payment

The declared VAT must be paid in full by the same deadline as the return ( *see above deadlines for filing) 

Late or partial payments may result in:

• Late payment surcharges
• Interest on the outstanding amount

c) Incorrect OSS reporting

Penalties may arise if:

• Sales are under‑reported or misclassified
• Incorrect VAT rates are applied
• Transactions are allocated to the wrong EU country

d) Missing or incorrect corrections

Errors must be corrected in a subsequent OSS return. Failure to correct known issues can increase penalty risk.

3. Possible OSS penalties in Germany

a) Late payment surcharge

Germany may charge a late payment surcharge of 1% per month (or part thereof) on unpaid VAT.

b) Interest on overdue VAT

Interest accrues on outstanding VAT amounts until payment is completed.

c) Late filing penalties

Late OSS returns may lead to:

• Administrative late filing penalties
• Estimated assessments if no return is submitted

d) Exclusion from OSS

Repeated or serious non‑compliance may result in exclusion from the OSS scheme for minimum of 2 years, requiring VAT registration in each EU country.

4. How to avoid OSS penalties

• Track OSS deadlines carefully
• File and pay before the deadline (not on the last day)
• Ensure correct VAT rates and country allocation
• Correct errors promptly
• Keep clear supporting documentation

Working with a specialist such as hellotax significantly reduces the risk of OSS penalties.

5. Key takeaway

Most OSS penalties in Germany result from late filing, late payment, or incorrect reporting. With accurate data, timely submissions, and professional support, these penalties are largely avoidable.