Excluded from the OSS: reasons, the two-year ban and what follows

You received a letter from the Federal Central Tax Office (BZSt), or you fear one is coming. In short: the BZSt excludes you from the OSS if you "repeatedly fail to meet your obligations or fail to meet them on time". As a minimum case, EU law names three quarters in a row in which you did not file or pay within ten days of the reminder. The exclusion then applies for two years across the EU. For sales to private buyers in other EU countries that are taxed there, you have to deal with the VAT in each of those countries yourself during that time.

Last updated: October 27, 2026

In brief

  • Reason: repeated breaches of the OSS duties. These include the return (also the zero return), the payment and the records (BZSt; section 18j (6) UStG; Article 58b (2) of Implementing Regulation (EU) No 282/2011).
  • Duration: two years, in every EU country and for all special schemes (Article 58b (1) of the Implementing Regulation).
  • Afterwards: you meet your VAT duties for later supplies directly with the tax authorities of the EU country concerned (Article 58c of the Implementing Regulation).

When does the BZSt exclude you from the OSS?

The BZSt writes on its OSS page that businesses which repeatedly fail to meet their obligations under the scheme, or fail to meet them on time, are excluded by the Federal Central Tax Office. German law says the same: if you repeatedly fail to meet your duties for the tax return and payment (section 18j (4) UStG) or the records, or fail to meet them on time, the tax authority excludes you (section 18j (6) UStG).

Only the country of registration can exclude you. The Implementing Regulation states that only the Member State of identification can exclude a taxable person from one of the special schemes. For an OSS participant in Germany that is the BZSt (Article 58 (1)).

Directive 2006/112/EC names four grounds for the Union scheme (Article 369e). The Member State of identification excludes you

  • if you notify that you no longer make supplies of goods or provide services covered by the scheme;
  • if it can be assumed for other reasons that your taxable activities under the scheme have ended;
  • if you no longer meet the conditions for taking part;
  • if you repeatedly breach the rules of the scheme.

The first three are not sanctions; they are the end of participation. This article is about the fourth ground, the repeated breach. On the others: if you stop selling, you deregister (How to leave the OSS in Germany). The regulation also says when doing nothing counts as stopping: if you have supplied no goods or services covered by the scheme in any Member State of consumption for two years, you are presumed to have ceased your activities (Article 58a). That does not stop you from using the scheme again if you start selling again.

What does "repeatedly" mean?

The regulation names minimum cases. A repeated breach includes "at least the following cases" (Article 58b (2)):

  • Return: for three immediately preceding return periods (quarters) the BZSt sent you reminders, and in each of those quarters you did not file the return within ten days of the reminder.
  • Payment: for three immediately preceding quarters the BZSt sent you payment reminders, and in each of those quarters you did not pay the declared tax within ten days of the reminder. An outstanding amount under EUR 100 per quarter is excepted.
  • Records: after a request from the BZSt and one month after a further reminder, you did not make the records you must keep available electronically.

The regulation also sets when the reminders come: for a missing return the BZSt reminds you on the tenth day after the day the return was due (Article 60a). For a missing or too small payment it reminds you on the tenth day after the payment deadline (Article 63a).

These are minimum cases; from 1 July 2028 Implementing Regulation (EU) 2025/518 removes the words "at least". The BZSt bases its decision on "all available information" (Article 58 (1)). So do not assume you are only at risk after the third reminder.

From when does the exclusion apply, and for how long?

From when: the exclusion takes effect on the first day of the calendar quarter that follows the day on which the decision was sent to you electronically (Article 58 (2)). German law says something similar: the exclusion applies from the tax period that begins after the notification (section 18j (6) UStG). The decision arrives electronically, and the BZSt communicates in the OSS through the BZSt online portal. The date that applies to you is in the decision itself.

For how long: an exclusion for repeated breaches applies in every Member State and for all special schemes for two years following the return period in which you were excluded (Article 58b (1)). Under German law the exclusion also leads to exclusion from the procedures under sections 18i and 18k UStG (section 18j (6) sentence 3).

What applies to your EU sales when you are excluded?

The regulation answers in one sentence: an excluded taxable person meets all VAT obligations for supplies of goods and services that arise after the exclusion took effect directly with the tax authorities of the Member State of consumption concerned (Article 58c).

For you that means: for sales to private buyers that arise after the exclusion takes effect, there is no central return at the BZSt any more. You are responsible for the VAT towards each country in which your sales are taxed. How registration works in a given country is set by that country; you learn it from its tax authority.

The time before the exclusion is different: you still file the final return and any late returns for earlier quarters, with payment, with the BZSt; later corrections go directly to the EU country concerned (Article 61a (1) of the Implementing Regulation). If you missed a deadline: OSS return missed the deadline. If you registered late: OSS registration too late.

How to avoid the exclusion

  • File every return, even with no sales. The BZSt: a return (a so-called zero return) must be filed on the dates given even if no sales were made in the quarter. The dates: 30 April, 31 July, 31 October, 31 January. More: OSS VAT return Germany.
  • Pay on time and with the payment reference. The payment must have reached the federal treasury by the end of the month after the quarter. Direct debit is not possible; the reference number (Kassenzeichen) and the tax period go into the payment reference. More: Paying your OSS return in Germany.
  • Read the portal. The BZSt says all its communication in the scheme, reminders included, takes place in the BZSt online portal, and recommends switching on the notification function there.
  • Keep your records ready. The BZSt requires records of the OSS sales that must be available electronically on request; the retention period is ten years.
  • Deregister when you stop. If you stop supplying, you must deregister by the tenth day of the following month at the latest. How: How to leave the OSS in Germany.

Common mistakes

  • No return because there were no sales. A zero return is due all the same.
  • Missing the reminder in the portal. The BZSt's reminder arrives only there, and the ten-day period starts with it.
  • Filed but not paid. The regulation's minimum cases treat return and payment separately.
  • Paying without the payment reference. Without the Kassenzeichen and the tax period the payment cannot be matched.
  • Trying to keep reporting new sales through the BZSt after the exclusion. For them the ban applies for two years across the EU; only the final return and late earlier returns still go to the BZSt.

How VAT GPT helps

VAT GPT is the tax software for Amazon and eBay sellers in Germany: your OSS return first, then VAT, EÜR, trade tax and income tax, calculated and filed in one place.

  1. You import your Amazon and eBay reports.
  2. VAT GPT splits the VAT for Germany and the EU (OSS) and calculates the OSS return for all EU countries.
  3. With VAT GPT Pro you send the return to the BZSt.

There is Free, Go (30 days free with all Pro features) and Pro. Try for free now

Not tax advice: the content does not replace individual advice.

Frequently asked questions

When does the BZSt exclude me from the OSS? When you repeatedly fail to meet your duties or fail to meet them on time (BZSt; section 18j (6) UStG). As a minimum case, Article 58b (2) of the Implementing Regulation names three quarters in a row in which you did not file the return or pay the tax within ten days of a reminder.

How long does the ban last? Two years, in every EU country and for all special schemes (Article 58b (1)).

What applies if I am excluded? For supplies after the exclusion takes effect, you meet your VAT duties directly with the tax authorities of each EU country concerned (Article 58c).

Is a zero return required even with no sales? Yes. A return (zero return) is due on the dates even without sales (BZSt).

Can one late return get me excluded? The law and the BZSt require repeated breaches. The regulation's minimum cases assume three quarters. Whether you are at risk is for the BZSt to decide.

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