On 1 July 2021, the EU introduced its e-Commerce VAT Package that replaces existing distance-selling rules and extends the Mini One Stop Shop (MOSS) into a wider-ranging One Stop Shop (OSS).
This is a significant change to VAT rules for B2C suppliers of goods and services, both as imports to the EU as well as intra-EU trading. The significantly lower pan-EU threshold of €10,000 (€0 for organizations established outside the EU) will require businesses to account for VAT on supplies in more countries.
Help your customers navigate the latest e-commerce mandate and grow your revenue in the process.
E-commerce businesses have new VAT obligations. For more on how we can partner to ensure your customers remain compliant and help them prepare for the digital future of tax, get in touch today.
Compared to the requirement for multiple VAT registrations under longstanding distance selling rules, with the OSS simplification, businesses may be able to register in one Member State and report all EU transactions through a single OSS return filed periodically. Payments are collected and distributed from the tax authority in this Member State to others where the VAT is due.
The EU e-Commerce VAT Package introduces three schemes under OSS:
On 1 July 2021: The EU e-Commerce VAT Package came into effect. Whether a business decides to use the OSS schemes or not, they still must account for VAT in all countries where they have a VAT liability. This may result in additional VAT registrations being required.
If a business decides to use the OSS simplification, then they must apply it to all qualifying transactions.
Additional record-keeping is required for OSS: Businesses using any of the OSS reporting schemes must retain more detailed records of transactions than previously. This additional data may be requested by tax authorities and used in audits to check VAT has been applied appropriately.
Declarations for Union and non-Union OSS are quarterly. The submission deadline will change to the last day of the month following the return period. Declarations under IOSS are monthly.
Businesses can correct previous OSS returns in the next OSS return. This is instead of correcting the original submitted OSS return.
Businesses established in the EU may only register for OSS in the Member State of establishment.
Non-EU businesses may need to appoint an intermediary and obtain an IOSS VAT registration in the intermediary’s country of establishment in the EU.
Non-Union OSS registrations can be in any chosen Member State. If already registered under MOSS, existing registration will continue.
Depending on the nature of business activity/supply chains, non-EU retailers may need to report under all three schemes. They will also need at least one ‘standard’ VAT registration and possibly more due to warehouses or similar.
EU businesses may have to report under OSS and IOSS as well as local registrations.
Implementing the changes required to comply with the EU e-Commerce VAT Package into an ERP system could take significant time and resources. Sovos can help ease this tax burden and help your customers prepare for, understand and implement the right solution for their business.
Our large team of advisors can help your customers navigate the complexities of modern VAT compliance.
Contact us to discuss how we can work together to ensure your customers remain compliant and help them prepare for the digital future of tax.