SaaS VAT Accounting in Estonia — OSS, Place of Supply, EU B2C Compliance
Electronically supplied services — SaaS subscriptions, online courses, e-books, streaming, downloads — have their own EU VAT regime. If you sell to consumers in the EU from an Estonian OÜ, the place of supply is the buyer country and the One Stop Shop (OSS) is how you declare VAT without registering in every member state. We set up OSS, wire your billing stack into the Estonian VAT return, and keep the customer-location evidence audit-ready.
OSS replaced MOSS on 1 July 2021
The Mini One Stop Shop (MOSS) for telecom, broadcasting and e-services was absorbed into the broader Union OSS on 1 July 2021. OSS now covers the same digital-service flows plus all cross-border B2C services and intra-EU distance sales of goods. If you were on MOSS, you are on Union OSS under the same registration — nothing lapses, but the scope expanded.
New registrants apply in e-MTA under special schemes. Registration takes effect from the first day of the quarter following application, so time it around a billing-cycle change rather than mid-quarter. Once in, you file a single quarterly OSS return in Estonia covering all EU B2C sales, and EMTA forwards the VAT to destination countries on your behalf.
Place of supply for digital services
For B2C digital services the place of supply is the customer country — you charge that country's VAT rate. EU rules require two non-contradictory pieces of evidence to identify customer location: billing address, IP geolocation, bank or card country, SIM country code. Stripe, Paddle, Lemon Squeezy and ChargeBee capture this at checkout, but you own the archive — keep the evidence for ten years.
For B2B supplies the reverse-charge mechanism applies: you issue an invoice with no VAT, the buyer self-assesses in their country, and you report the sale as an intra-EU service supply on the VD declaration. Validate every VAT number against VIES at transaction time and store the confirmation — a stale validation is not a defence if the number was already invalid.
The €10 000 threshold — when it applies
A single EU-wide €10 000 annual threshold covers combined cross-border B2C telecom/broadcasting/e-services and intra-EU distance sales of goods. Below it you may charge Estonian 24% VAT on all EU B2C sales and skip OSS. Cross it, and destination-country rates apply from the transaction that tipped you over — you either register for OSS or for VAT in every destination country. Most SaaS crosses within a quarter of launch.
The threshold is calendar-year cumulative and resets each January. It does not cover supplies to third countries, B2B supplies, or domestic Estonian sales — those follow their own rules. We usually advise voluntary OSS registration on day one if EU B2C is on the roadmap, so the switch is clean rather than retroactive.
Stripe Tax, Paddle, and the collector-of-record question
Stripe Tax calculates and charges the correct rate per country, but Stripe is not the seller of record — you still need OSS registration, OSS filing, and reverse-charge handling on B2B invoices. Paddle and Lemon Squeezy operate as Merchant of Record: they become the taxable person, remit VAT worldwide, and pay you net. MoR shifts compliance off your books but does not increase revenue.
We see most Baltic SaaS start on Stripe plus OSS — cheaper, direct customer relationship, clean data — and migrate to MoR only when non-EU VAT/GST (UK, Switzerland, Australia, US sales tax) starts consuming founder time. We run the crossover analysis on your revenue mix before recommending either.