Table of Contents
- Introduction
- What is the One Stop Shop (OSS)?
- How to Register for OSS
- Changes for EU-Based Online Sellers
- Changes for Non-EU Online Sellers
- Filing OSS Reports
- Conclusion
- Frequently Asked Questions (FAQs) on One Stop Shop (OSS)
Introduction
In the ever-evolving landscape of online commerce, the European Union has implemented significant changes to its VAT regulations with the introduction of the One Stop Shop (OSS) as part of the EU VAT reform that took effect in July 2021. As an online seller, you must understand these changes to maintain compliance and leverage the new system for your business's benefit. This comprehensive guide delves into the specifics of the OSS, how it alters the VAT filing landscape, the registration process, and the implications for both EU and non-EU sellers.
What is the One Stop Shop (OSS)?
The OSS framework is an extension of the previous Mini One Stop Shop (MOSS), which was limited to telecommunications, broadcasting, and electronic (TBE) services within the EU. From July 2021, the OSS has broadened its scope to include all business-to-consumer (B2C) services, distance sales of goods within the EU, and certain domestic supplies facilitated by electronic interfaces.
Key Benefits of OSS
The OSS aims to simplify the VAT return process across the EU by enabling businesses to report all B2C sales in a single VAT return submitted in their home country. This simplifies the administrative burden and reduces the complexity associated with cross-border VAT compliance.
For instance, a company based in Germany that sells to multiple EU countries without storing goods in those countries would now need to submit only one home VAT return and one OSS VAT return per tax period.
How to Register for OSS
Registration Process
To begin using the OSS, businesses must complete a registration process via the Federal Central Tax Office (BZSt) online portal. Here’s a step-by-step overview:
- Access the BZSt Portal: Log in using a certificate file. This is typically the same access data used for other tax obligations.
- Form Completion: Navigate to “Forms and Services” to find the “Registration notice for participation in the OSS EU regulation”. Fill out and submit this form.
- Confirmation: Upon submission, the BZSt will provide a written confirmation and further information on declaration periods and payment deadlines.
Important Considerations
Timeliness is crucial. Registration must be completed by the end of a quarter to participate in the OSS for the following quarter. Therefore, early registration is advised to avoid delays in the application process.
Changes for EU-Based Online Sellers
Abolition of Distance Sales Thresholds
One of the most substantial changes brought by the OSS is the removal of individual distance sales thresholds for different EU countries. Instead, there is now a single, EU-wide threshold of €10,000 for distance sales.
VAT Registration Requirements
- Single Country Storage: Companies that store goods in only one EU country and sell to multiple other EU countries no longer need to register for VAT in those other countries.
- Multiple Country Storage: Businesses storing goods in multiple EU countries must still register for VAT in each country where storage occurs.
- Domestic Sales: These sales are not included in the OSS report and must be reported through the standard VAT return process in the respective countries.
Example Scenarios
-
Alpha Services
- Storage: Only in Germany
- Sales: To France, Italy, and Spain
- VAT Requirements: Home VAT registration in Germany and OSS registration for cross-border sales. No additional VAT registration needed in France, Italy, or Spain.
-
Beta Products
- Storage: Germany, France, Italy, and Spain
- Sales: To all these countries
- VAT Requirements: VAT registration in each country of storage. OSS for cross-border transactions between stored countries.
Changes for Non-EU Online Sellers
Non-EU sellers face similar changes, with the elimination of individual country thresholds for distance sales. However, several distinctions are noteworthy:
VAT Registration for Storage
- Non-EU Home Companies: These companies need VAT registration in each EU country where they store goods.
- Direct Sales without EU Storage: If goods are stored only outside EU countries, customers are responsible for custom duties and taxes upon delivery.
Deemed Suppliers
If a non-EU business sells through platforms like Amazon or eBay, these marketplaces often act as deemed suppliers, handling VAT on behalf of the seller.
Example Scenarios
-
Delta Limited
- Storage: Only in the UK
- Sales Platform: Amazon UK
- VAT Requirements: VAT registration in the UK with Amazon handling VAT for sales to France, Italy, and Spain.
-
Zeta Limited
- Storage: UK, France, Italy, Spain
- Sales Platform: Amazon UK
- VAT Requirements: VAT registration in all four countries of storage.
Filing OSS Reports
Process of Submission
During the initial period after the introduction of OSS, VAT returns must be manually filled out in the BZSt portal due to operational delays in automating the process. This involves:
- Separating Service and Product Sales: Distinguishing between different types of revenues.
- Sorting Foreign and Domestic Sales: Organizing sales data by customer location.
- Categorizing by EU Countries and VAT Rates: Ensuring accurate reporting per country-specific VAT rates.
Simplifying the Reporting Process
To avoid complications, online sellers can engage tax advisors specializing in e-commerce, such as hellotax, to automate transaction separation, control data quality, and assist with the submission of OSS pre-registrations.
Conclusion
The introduction of the One Stop Shop (OSS) represents a major shift in the EU's VAT reporting requirements, aiming to ease the compliance burden for online sellers. By streamlining VAT filings into a single report, the OSS significantly reduces the administrative workload associated with cross-border sales. However, understanding and navigating the specifics of registration, filing processes, and the impact on different scenarios for both EU and non-EU sellers is crucial. With careful planning and the right support, businesses can benefit from this new simplified system and remain compliant across the diverse regulatory landscape of the EU.
Frequently Asked Questions (FAQs) on One Stop Shop (OSS)
Do I need more than one registration after OSS? To use the OSS, you need a VAT number in your home country (or chosen country for non-EU sellers) and in any other EU country where you store goods.
Will I need to report all my sales in the OSS report? No, only cross-border B2C sales are included in the OSS report.
Is there anything else I need to report except for the OSS return? Yes, domestic sales must be reported via the standard VAT return. Sales in countries where goods are stored also need to be reported locally.
How to register for OSS? Registration varies by country but generally involves accessing the tax authority’s portal, completing necessary forms, and submitting the application.
Do I need a special report for OSS? Yes, the report must cover all B2C cross-border sales originating from any dispatch country.
Who can file my OSS report? Authorized individuals or entities, which may include licensed accountants or tax advisors, depending on the country’s regulations.
Can I deregister my VAT ID in countries where I do not store? Yes, once registered for OSS, you can deregister VAT IDs in countries where no storage occurs.
Is OSS a mandatory report? No, but using the OSS is typically more cost-effective and administratively simpler than traditional reporting.
Can non-EU businesses use OSS? Yes, non-EU businesses can choose an EU country for OSS registration as long as they have standard VAT registration in that country.
Can I include my expenses/imports in the OSS report? No, the OSS report is only for cross-border B2C sales.
Do B2B transactions go in the OSS report? No, B2B transactions must be reported in the standard VAT return.
Do I need to file EC reports & PL SAF-T reports? Yes, these are required for B2B cross-border transactions.
How can I submit the OSS return? As of Q3 2021, OSS returns must be manually completed and submitted through the BZSt’s portal.
By embracing the OSS, online sellers can streamline their VAT compliance across Europe, ensuring that they remain up to date with the latest regulatory requirements and reducing their administrative burden.
