Did you know that from 1 July 2021 for EU distance sellers regular VAT registrations can be replaced by OSS VAT compliance?
- What is OSS VAT compliance?
OSS VAT compliance is a simplified (One-Stop-Shop) VAT compliance for distance sales of goods and/or services within the EU in force since 1 July 2021. There are two types of OSS VAT compliance:
- Union scheme to be used for:
- EU companies to declare B2C supplies of goods and services within the EU
- electronic interfaces to declare B2C supplies of goods within the EU
- non-EU companies to declare B2C supplies of goods within the EU (not identical with the supply of imported goods)
- Non-Union Scheme to be used for:
- non-EU companies to declare B2C supply of services within the EU
Both schemes can be filed for all EU Member States from one EU Member State which can be either the country of establishment or another of your choice.
Thus, instead of getting registered for VAT in various EU Member States, your company will need to file only one summarized VAT return thus saving a lot of compliance costs.
- Who is eligible for Union scheme OSS?
EU established companies who are distance sellers of goods and/or services within the EU and fulfill the following criteria.
Distance sellers of goods:
1: Your company is selling goods within the EU to end-consumers, which are typically private individual (non-taxable) customers (this is called B2C sales).
2: The goods are dispatched directly from one EU country to the country of the customer.
3: Your company has got no warehouse in the country which is to be included in the OSS compliance.
4: Your company is not subject to other taxes in the country which is to be included in the OSS compliance. A typical example could the Environmental Product Tax, or EPT (green tax or packaging tax), for the packaging in Hungary. (This is specific to Hungary).
Distance sellers of services:
As the sales of services is a more complex question, we suggest to contact us for detailed analysis if your company can be eligible for OSS.
- Who is eligible for the Non-Union Scheme OSS?
Non-EU companies not having a fixed establishment in the EU are eligible to use the Non-Union OSS who provide B2C services. The following list is a non-exhaustive list of services that can be included in this.
- Accommodation services carried out by non-established taxable persons;
- Admission to cultural, artistic, sporting, scientific, educational, entertainment, or similar events; such as fairs and exhibitions;
- Transport services;
- Services of valuation and work on movable tangible property;
- Ancillary transport activities such as loading, unloading, handling, or similar activities;
- Services connected to immovable property;
- Hiring of means of transport;
- Supply of restaurant and catering services for consumption onboard ships, aircraft, or trains, etc.
- What about the country DST (Distance Sales Threshold)?
The former country DSTs will be abolished and replaced by a new EU-wide threshold of 10,000 EUR. This means that if your company’s sales in any EU Member State have exceeded the new EU threshold of 10,000 EUR, it can be included in the OSS compliance.
Under this threshold, you can apply your own country’s VAT rate and make the VAT compliance accordingly. You can also opt for OSS compliance right away as a matter of choice.
- What to do?
If you fulfill the above criteria and are already registered in various EU countries for VAT, you can ask your tax representative in one EU Member State to register your company for OSS and simultaneously de-register from VAT from the other EU Member States, unless you need any of those VAT numbers for other purposes.
If you fulfill the above criteria but are not yet registered anywhere in the EU, you can turn to the tax representative of any EU Member State and request the OSS VAT compliance.
If you are not sure whether your company is eligible for OSS, you can contact us. We can advise you further.
Disclaimer: information available on this website does not constitute tax advice. If you would like a tailor-made analysis of your company’s exact tax compliance needs please contact us. We exclude all liability for inappropriate use of this information.