The biggest ecommerce tax reform of a generation is finally here. As of 1st of July the EU VAT Ecommerce Package will go live and the landscape of European ecommerce will change forever. One of the changes that will have the biggest effect on ecommerce sellers is the new One-Stop-Shop (OSS). You can follow the links to find our overview on the EU VAT Ecommerce Package and our closer look at the OSS, but this article will be focussed on how to register for the OSS to ensure your business keeps running smoothly.
What Is The OSS?
The OSS is essentially the digitalization and simplification of VAT reporting in Europe. The system will allow sellers to record and declare all their VAT due on the supply of goods and services in Europe in one place. This means that sellers will only need to register for VAT in one European country and then declare all their intra-EU sales to that one country. The tax authority will then distribute your payments to the relevant parties.
After they register for the OSS, traders will have to apply the VAT rate of the member state to which the services or goods are supplied.
Union OSS
The Union OSS should be used by taxable persons in the EU who supply services in EU member states other than the one within which they reside or distance selling across the EU.
If you are not established in the EU, you can use the Union OSS for the distance sales of goods within the EU.
Non-Union OSS
This form of the OSS is predominantly for sellers based outside of the EU who wish to offer B2C services in the EU. These services can include the likes of transport and accommodation.
Should You Register?
If you are wondering whether you should register for the OSS, there is a few things you should know. Firstly, there is no longer different distance selling thresholds for each EU member state. Instead, there will be a EU-wide application of a €10,000 distance selling threshold. If your sales exceed this amount in any state you should definitely sign up for the OSS a it will simplify your VAT reporting procedures. Below this amount, you can still sign up (and probably still should) but you may be able to continue using domestic rules for your VAT,
Secondly, you should know that almost all goods and services will be covered by the OSS and the VAT reporting for both will be much simpler than before. Whilst it may take some getting used to, the OSS looks set to really simplify VAT obligations in the EU.
This is especially true if you are a UK seller, as the EU VAT Ecommerce Package will bring the EU’s VAT and ecommerce rules much more inline with the UK’s rules since Brexit.
How To Register For The OSS
Each country in the EU will has got an electronic portal that you can access to sign up for the OSS. You will need to submit an application that will need all the relevant information, such as your VAT number and business registration and address. Once the application is completed the relevant tax authorities will check everything is in order before approving your registration.
You will need to think carefully about which country to register in. If you hold stock in a country, or you have a premises there you will have to remain VAT registered in that country, so it makes sense to register for the OSS with that country.
You should also seek advice about each country’s specific rules surrounding signing up. Some countries, like the Netherlands for example, require you to have a Dutch intermediary and representative to complete the application.
Please be aware if you are registering for the non-union version of the scheme you will be given an individual VAT identification number. This will not be the case if you sign up for the regular union version of the scheme.
Once You’re Registered, What Will Be Required Of You?
Once you are using the scheme, you will be required to collect VAT from your buyer on each transaction. This should be at the rate of the member state where the goods are sent/the services are supplied.
You will then have to collect all the VAT and make quarterly electronic VAT returns to the state which you signed up to the portal with. You should keep these records for ten years.
Conclusion – We Can Help You Register For The OSS
Hopefully, you can see how useful the OSS will be. It will undoubtedly simplify VAT returns for EU distance selling and will mean that ecommerce traders can sell much more freely to the EU. This is especially true of UK sellers following Brexit.
Our long history of working with ecommerce sellers, means we can offer you expert advice – so please do not hesitate to give us a call on or send an e-mail to enquiries@jpaccountant.com. As well as help with the upcoming EU Ecommerce VAT Package and registering you for the OSS, we would be more than happy to file your EU VAT returns, and help you comply with VAT in case your account faces any issues. Get in touch to receive a quote today.
