The OSS for businesses established outside of the EU

One of the changes resulting from the new e-commerce rules is the One Stop Shop (OSS). We have previously written about the benefits of this scheme, and how it will work, as well as how businesses established in the Netherlands / the European Union (EU) can already register for the OSS. In this article we will describe the process of the OSS in relation to non-EU businesses that sell goods to consumers in the whole EU.

This article covers situations in which goods have already been imported into the EU, for example into the Netherlands, and are sold and shipped from the Netherlands to consumers in other EU countries.

Registration deadline

The new rules will enter into force on 1 July 2021. It is important to get your registration sorted before 1 July 2021, as the OSS only has a very limited retroactive applicability. Retroactive registration is only possible until, at the latest, the 10th day of the month following the month in which you performed a supply.

Businesses established in the Netherlands have been able to register since 1 April 2021. Recently, it has also become possible for businesses that are not established in the Netherlands to register for the OSS with the Dutch tax authorities.

Registering for the OSS

If you are not established in the EU, you will need to register for the OSS in the EU member state of dispatch. So if your goods are stored with a 3PL in the Netherlands, and the goods are shipped from that warehouse in the Netherlands to consumers in other EU countries, you will need to register for the OSS with the Dutch tax authorities (should you choose to make use of the OSS). If you have goods stored in multiple EU countries, and you sell and ship these goods from these countries to consumers in different EU countries, you can choose an EU country in which to register for the OSS.

Registering for the OSS in the Netherlands can be done through the website of the Dutch tax authorities. However, to do so you will need the login information that was issued to you when you registered for VAT purposes in the Netherlands (normal VAT return). If you do not (or no longer) have the login details, or if these details are no longer valid (they need to be used within a certain period of time after being issued), you can request new login details from the Dutch tax authorities.

Once you have logged in, you can register by means of an online form on the website. You will need to fill in certain company details, as well as information regarding the transactions, and the manner in which they take place. Next, you submit the online form, and the tax authorities process the registration for the OSS.

This processing may take some time, especially if you also need to request new login details, so we strongly recommend that you take care of this matter as soon as possible.

Another point of attention is the following. If you do not currently have a normal VAT registration and reporting obligation in the Netherlands, you will still need to register with the Dutch tax authorities by means of the normal VAT registration procedure. At the moment, the Dutch tax authorities do not offer a simplified procedure for registering for the OSS. Once you have registered, you will receive the login details which can be used to register for the OSS as mentioned above. But beware! The processing by the Dutch tax authorities of both the normal VAT registration and the OSS registration will take some time. Given the limited retroactive applicability of the OSS scheme, it is very important that you set the process in motion as soon as possible.

Can all transactions be reported using the OSS?

Only distance sales can be reported in the OSS. Distance sales are sales to consumers whereby these goods are shipped from one EU country to another. In the OSS return, you can report the total turnover for each EU country, and the VAT due (make sure you apply the correct VAT rates for each EU country). Next, you pay the total VAT due, to the Dutch tax authorities, who will pass on the VAT due to the relevant EU countries.

This means that no other transactions can be reported in the OSS. For example, if you sell and ship goods to consumers in the EU country in which your goods are stored, you cannot report the VAT due on these local sales in the OSS return. The VAT should be reported in the local VAT return.

Example

Your business is established in the USA. Your goods are held in stock in the Netherlands by a 3PL. You sell and ship goods from this stock to consumers in the Netherlands and consumers in France and Italy.

The sales to consumers in the Netherlands, and the VAT due on these sales, should be reported in your Dutch VAT return.

The sales to consumers in France and Italy, and the French and Italian VAT due, can be reported in the OSS return that you file with the Dutch tax authorities.

It is not possible to request a refund of VAT by means of the OSS (or to offset VAT on purchases with VAT on sales). A refund of any (refundable) VAT charged to you should be requested either in a normal VAT return or by means of a refund request, depending on the situation.

If you have any questions about the OSS, or if you require any assistance in the registration process, please feel free to contact Marisa Hut or Barthold Bergman.