Table of Contents
- Introduction
- What is the One Stop Shop (OSS)?
- Registration for OSS
- What is Excluded from OSS?
- Changes for Online Sellers Based in the EU
- Changes for Non-EU Online Sellers
- Submitting OSS Applications
- FAQ: One Stop Shop (OSS)
Introduction
Imagine you run an online store, selling your products across several European countries. It sounds lucrative but managing VAT returns across different nations is nightmarish, right? If you can relate, then the new One Stop Shop (OSS) regulation is something you'll want to know about. Introduced as part of the EU VAT reform in July 2021, OSS aims to simplify these processes. However, while it offers long-term benefits, the initial setup and adjustment might seem daunting. This blog post will navigate you through these changes, shedding light on what online sellers need to know, including the new Import One Stop Shop (IOSS), the registration process, and key exclusions. By the end, you’ll understand how to streamline your operations for enhanced efficiency and compliance.
What is the One Stop Shop (OSS)?
The One Stop Shop (OSS) builds upon the Mini One Stop Shop (MOSS) system that was specifically for telecommunications, broadcasting, and electronic (TBE) services prior to July 2021. OSS has widened its scope to encompass all B2C services and distance sales of goods within the EU, along with domestic supplies facilitated by electronic interfaces under certain conditions. Additionally, the Import One Stop Shop (IOSS) now covers the VAT on low-value goods imported from outside the EU.
Key Benefits of OSS
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Unified VAT Returns:
- Companies selling to multiple EU countries need to file only one home VAT return and another separate OSS VAT return per period.
- Only two payments are required for these returns, simplifying the process over dealing with multiple VAT registrations across countries.
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Administrative Ease:
- OSS reduces the complexity of handling several VAT registrations, fostering a smoother business operation.
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Threshold Flexibility:
- With the old individual distance sales thresholds eliminated, OSS provides a single, EU-wide €10,000 threshold, alleviating the need for multiple VAT numbers unless goods are stored in more than one EU country.
Registration for OSS
If you wish to benefit from OSS from a specific quarter, registration must be completed by the end of the previous quarter. Registration is done through the BZSt online portal, where you can log in using a certificate file. Here’s how it’s done:
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Log In to BZSt Online Portal:
- Use existing access data or create a new account which may take time.
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Registration Notice Submission:
- Under "Forms and Services," find the “Registration notice for participation in the OSS EU regulation”.
- Enter necessary data and submit the form.
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Confirmation:
- Written confirmation from BZSt will follow, detailing declaration periods and payment deadlines.
For those uncertain about the registration or the viability of OSS for their business, expert advice is a wise step. Companies like hellotax offer help in OSS registration for various countries, including Italy, France, and Germany.
What is Excluded from OSS?
Despite its many advantages, OSS does not cover every transaction. Certain dealings still require separate VAT reporting:
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Domestic Sales:
- Domestic sales within a single country still need to be reported via standard VAT returns.
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Business to Business (B2B) Transactions:
- These transactions are not included in OSS and must follow standard VAT reporting protocols.
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Imports and Purchases:
- Transactions involving imports from outside the EU must also be reported through the traditional VAT system.
Changes for Online Sellers Based in the EU
Distance Sales Threshold Abolition
One of the most significant changes under OSS is the removal of old distance sales thresholds. A single EU-wide threshold of €10,000 now applies, provided the storage is in one country. If you store goods in multiple countries, separate VAT registrations are still required.
Examples of Impact
Example 1 – Alpha Services: Single Country Storage
- Alpha Services, based in Germany and storing goods only in Germany, now needs only a home VAT number and can file one OSS VAT return for sales in other EU countries.
Example 2 – Beta Products: Multi-Country Storage
- Beta Products, storing goods in Germany, France, Italy, and Spain, requires VAT numbers in all these countries. Each country requires a standard VAT return in addition to OSS filings.
Changes for Non-EU Online Sellers
Simplified VAT Obligations
For non-EU businesses, the OSS eliminates the need for multiple VAT registrations unless goods are stored within the EU. The distance sales threshold no longer applies to individual countries.
Scenarios for Non-EU Sellers
Example: Delta Limited – Non-EU Company Selling via Amazon UK
- Amazon is a deemed supplier for Delta Limited, meaning Delta only needs a VAT number in the UK. VAT on sales to countries like Italy, France, and Spain is handled through Amazon's VAT arrangements.
Example: Gamma Ltd – Direct Selling with No Deemed Supplier
- Gamma Ltd, which does not use a deemed supplier like Amazon, must have a VAT number in the UK. For exports to the EU, end consumers handle customs duties.
Submitting OSS Applications
Currently, OSS applications must be submitted manually via the “My BOP” portal of the BZSt. While a digital submission method is planned, this has not yet been implemented.
Required Data for Submission
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Separation of Services and Products:
- Each revenue type must be listed separately to account for different VAT rates and treatments.
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Differentiation of Domestic and Foreign Sales:
- Sales to domestic and foreign customers must be separated by warehouse location.
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Sorting by Country and VAT Rates:
- Transactions should be sorted by destination country and applicable VAT rates.
Steps for Submission
- Log into the “My BOP” portal.
- Ensure data is prepared in the structure required by OSS.
- Submit the detailed sorting of sales and profits manually as the current forms dictate.
FAQ: One Stop Shop (OSS)
Q: Do I need more than one registration after OSS?
- Yes, VAT numbers are required in your home country and every country where goods are stored.
Q: Will all sales be reported in OSS?
- Only cross-border B2C sales are reported in OSS; domestic sales need standard VAT returns.
Q: How to register for OSS?
- Registration can be done via the BZSt portal and must be completed by the end of a quarter for the following quarter's use.
Q: Can non-EU businesses use OSS?
- Yes, but they need a VAT registration in an EU country of choice.
Q: Can I include expenses/imports in OSS reports?
- No, OSS is exclusively for B2C cross-border sales.
Q: How can I submit the OSS return?
- OSS returns must currently be submitted manually via the BZSt portal.
Understanding and adapting to the OSS can initially be complex, but its long-term benefits of reduced administrative burden and streamlined VAT reporting make it a valuable tool for any e-commerce business operating in multiple EU countries. Whether an EU-based seller or a non-EU seller, OSS offers a unified solution to navigate the intricate web of European VAT regulations.
