While the EU VAT One Stop Shop (OSS) scheme reduces administrative burden, it also comes with strict compliance obligations. These include submitting periodic OSS returns on time, even in quarters where no relevant sales occurred. Repeated non-compliance can result in exclusion from the scheme. A recent decision from the Danish National Tax Court illustrates just how strictly these obligations are enforced, and serves as a cautionary example for businesses relying on OSS registration.

Case Background and Court Decision

H1 A/S is a Denmark-based company that operates in the furniture retail sector and has been registered for the EU OSS scheme since July 1, 2023. However, since it registered for OSS, the company has not submitted any reports. Accordingly, the Danish Tax Agency issued several reminders to the company concerning the missing reports for the second, third, and fourth quarters of 2024, warning that repeated failures to report or pay could lead to exclusion from the EU OSS scheme for two years. 

Since the company did not submit the necessary reports, on March 4, 2025, the Tax Agency formally proposed excluding the company from the scheme, and on April 1, 2025, officially excluded the company from the OSS for two years. In its complaint, the company stated that, following changes to its employee base, it had not been informed that it was registered for the EU OSS scheme or required to submit OSS reports. However, the Tax Appeals Board stated that the company's complaint did not provide grounds for changing the original decision.

The case was referred to the National Tax Court, which considered whether the Danish Tax Agency was correct to exclude the company from the EU OSS scheme and impose a two-year quarantine preventing the company from using the scheme. The National Tax Court found that the company remained responsible for complying with its OSS reporting obligations, regardless of its internal staffing issues or belief that its system was functioning correctly. As a result of these findings, the National Tax Court therefore upheld the Danish Tax Agency's decision.

Conclusion

The ruling confirms that repeated failure to submit OSS returns can justify exclusion for two years, and internal administrative problems or reliance on an automated reporting system do not excuse non-compliance with the OSS reporting requirements. Businesses must ensure that internal administrative changes do not disrupt their critical tax filing obligations, as the Tax Authorities enforce these reporting deadlines strictly.