VAT and the One Stop Shop: answers to your questions
As of 1 July 2021, the VAT consequences of selling goods to consumers will change. If your stock is located in the European Union (EU) and you sell these goods to consumers in EU countries, these changes are relevant to you. At the moment, a lot of information has been coming your way, and you may be feeling overwhelmed. For this reason, we have compiled a small selection of frequently asked questions, and we hope our answers to these questions will be helpful for you.
My distance sales will remain below the current thresholds. Are the changes relevant for my business?
As of 1 July 2021, the thresholds for distance sales will be abolished. In principle, you will be liable to VAT in the country of destination of the goods, with all the corresponding local VAT obligations. The only exception to this rule is in cases where your turnover from distance sales to consumers in other EU countries after 1 July 2021 is less than EUR 10,000 per year.
What is the OSS?
The One Stop Shop (OSS) return is a simplification that allows you to report and pay, in one EU country, the VAT due on the sales.
Am I obligated to register my business for the OSS?
No, the use of the OSS is optional. Registration for the OSS is not mandatory. However, bear in mind that if you do not make use of the OSS, you may be faced with possible VAT obligations in other EU countries.
In which country can I register for the OSS?
If your business is established in an EU country, you must register for the OSS return in the EU country of establishment. If your business is established in a non-EU country, you should register in the EU country from which the goods are transported to the consumer. If your business is established in a non-EU country and has goods held in stock in multiple EU countries, you can choose in which EU country you wish to register for OSS.
Which VAT rate should I apply to my sales?
If you exceed the EUR 10,000 threshold, or choose not to apply it, the VAT rate of the EU country of destination of the goods is applicable. Please note, your business is responsible for applying the correct VAT rate.
Must I file OSS returns in multiple countries, if I use the OSS?
If you make use of the OSS, you must report the VAT due with regard to sales to consumers in all EU countries, in one OSS return. Also, you must pay the VAT due, to the authorities of the EU country of OSS registration. The EU country of registration then passes these amounts on to the authorities in the various EU countries.
Should I report local supplies in the OSS return?
No, your local supplies of goods are to be reported in your regular (national) VAT return. These cannot be included in the OSS return.
Can I request a refund of VAT by means of the OSS return?
It is not possible to request a refund of VAT by means of the OSS return. The OSS return can only be used to report EU distance sales and specific services. A refund of any input VAT must be requested by filing a normal (national) VAT return, or by means of a refund request.
Must I issue an invoice to B2C consumers if I make use of the OSS?
There is no obligation to issue an invoice if you use the OSS. However, if you do decide to issue an invoice to your consumers, the invoicing rules of the EU country of OSS registration apply. If you do not use the OSS, you are obliged to issue an invoice.
What is the filing deadline for OSS returns?
You must file the OSS returns electronically, for each calendar quarter, in the EU country of OSS registration. The deadline for filing the OSS returns and paying the VAT due is the last day of the month following the reporting period.
We understand that you may have more questions, and that it may be complicated to determine what steps to take next. It is important that you start preparing on time. For example, several things must be adjusted and taken care of (both internal and external matters). Would you like to know more, or do you have any further questions about the above? Please feel free to contact Marisa Hut or Barthold Bergman of VAT & Customs Advisory.