Registration in the OSS system
System One Stop Shop (OSS)
One of the main features of the EU VAT changes in 2021 is the newly extended One-Stop-Shop VAT system, which aims to reduce the VAT compliance burden on online sellers. How does the new scheme work in practice? How can you benefit from it? If so, what responsibilities will you be obligated to? If you cannot find the answers to these questions contact us.
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We offer you a number of solutions related to online sales. Thanks to the experience gained and foreign sales activities, we were able to expand the range of services we offer.
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System to support e-commerce activities, VAT registration in European countries, Amazon account reinstatement and more.
What is the new One Stop Shop (OSS) system?
OSS is a web portal, developed on the basis of the existing Mini One Stop Shop, which allows internet companies to report certain EU B2C deliveries in one Member State. Therefore, a single quarterly payment and VAT declaration will be payable for OSS supplies, not multiple local declarations and endless payments.
From many to one VAT registrations
As an e-commerce company, you would historically have had to register for VAT with multiple tax administrations. OSS allows you to register with the system in one Member State. The government is then responsible for distributing the relevant amounts of VAT that you report and pay each quarter to the different Member States where your customers are located (so-called “consumption Member States”).
This provides a significant simplification for companies that may no longer need correspondence with many tax offices.
Extended circle of program users
Along with the extension of MOSS to OSS , more taxpayers will be able to benefit from the simplification of VAT reporting.
Indeed, the existing extra-EU system will remain adapted to non-EU companies – including UK traders. At the same time, the new Union-OSS service will be available to EU and non-EU companies, including online trading platforms.
Not only is the MOSS system being expanded to allow more taxpayers to use different systems, it is also being expanded in scope to allow additional deliveries to be reported through the portal.
Which transactions will be covered by the new OSS scheme?
The new OSS schema will enable reporting of:
- Provision of B2C services by enterprises based in the EU
- Distance sales of goods in the EU by seller from and outside of the EU
- Domestic sales of goods through online marketplaces when they facilitate sales on behalf of non-EU companies
After enrolling in the new systems, e-commerce companies must report all eligible shipments through the systems rather than selecting specific shipments. As a general rule, you cannot choose to report some sales through OSS and others on your local VAT return.
In other words, OSS requires consistency, but also vigilance with the local VAT rates that apply to each of your products in each country your customers are located in.
With single quarterly returns and due payments, businesses will have no excuse for not meeting deadlines, and different Member States can impose penalties that want to receive VAT due. Repeated failure to meet deadlines on the current MOSS results in the expulsion of the company from the system, so it would be fair to expect the same treatment under the new OSS.
Lastly, you need to be aware that the OSS is only for reporting the VAT due. This means you can deduct VAT charged on the program just like you would with a local VAT return.
There are several variables that need to be considered in order for companies to prepare for change. What scheme can I use? What VAT rates should I apply? Where should I register with OSS? With only a few months left, invest in time to review your supply chain and see how OSS can benefit your business in the future.
The new One-Stop-Shop VAT’s point is not the only simplification that will be made available to ease the burden on e-commerce companies. In reality, the EU is simultaneously launching a new one-stop shop for importing imported goods and introducing increased VAT collection obligations for trading platforms such as Amazon or Ebay.
start signing up with us for OSS today
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