In the course of the introduction of the EU One-Stop-Shop (OSS), EU-wide VAT law has once again been adapted to the needs of the digital economy. Previously, country-specific delivery thresholds had to be observed in cross-border B2C sales, which have now been standardized at EU level. The EU-OSS, which has replaced the MOSS since July 1, 2021, has thus significantly simplified the process of tax collection and collection in the B2C sector.
Revenues to be declared within the EU-OSS. The following deliveries and other services fall under the EU-OSS and can thus be explained:
- Other services to non-entrepreneurs that are performed in a member state in which the entrepreneur has neither a registered office nor a permanent establishment, and in which, contrary to the general clause (B2C), the place of performance is not located at the entrepreneur’s location.
- Intra-Community mail order sales, whereby the extension of the OSS to cross-border mail order sales in the EU goes hand in hand with the abolition of national delivery thresholds. Since July 1, 2021, these have been replaced by the uniform EU-wide (mail order) turnover threshold of 10,000 net (small business threshold; option).
- Supplies of a platform, if the platform is the tax debtor
- Intra-Community mail order sales as well as certain sales of a platform of entrepreneurs from third countries
Registration. The application of the OSS gives the entrepreneur the option of registering in only one EU country (so-called Member State of identification; for EU companies in the country in which the economic activity is based, for third-country companies in the country where the permanent establishment is located) and to explain his sales there, ie also those that were generated in other EU countries. Registration for VAT purposes in each member state in which the non-business end customers are based is therefore no longer necessary in principle. In this regard, however, it should be noted that local registration and declaration obligations in the event of the relocation of goods offered in online trade in accordance with so-called “fulfillment agreements” with Amazon & Co remain in effect. It should also be borne in mind that input tax cannot be claimed within the framework of OSS and that this must therefore be claimed in the form of a refund or assessment in the respective country.
Registration in Austria takes place via FinanzOnline; whereby MOSS participants automatically became EU-OSS participants; re-registration was not necessary in this case. The Member State of Identification (MSI) finally forwards declarations and payments to the respective Member State of Consumption (MSC). In case of default, the MSI sends a reminder; however, the MSC is responsible for any further execution steps.
To determine the correct VAT rate of a product for the respective EU Member State (country of destination), the EU Commission has set up the freely accessible working tool My Trade Assistant. By entering the product code or product name and selecting the country of destination and origin, the corresponding tax rate of the country of destination can be found simply and easily.
Deadlines. The OSS is generally applicable from the calendar quarter after the application is filed or from the day of the first delivery or other service if reported by the 10th of the following month. The declaration period is the calendar quarter; the submission of an annual declaration is not required. Zero returns must also be submitted. The entrepreneur must pay the declaration and the VAT payment by the last day of the month following the declaration period at the latest (e.g. declaration period 3rd quarter 2021 à submission and VAT payment by 31. 10. 2021). In principle, the OSS can be terminated at any time upon request. In this case, the termination takes effect at the beginning of the quarter if the MSI has been notified of the termination request no later than 15 days beforehand. This is followed by a lock-up period of two quarters.
Conclusion. As of July 1, 2021, the EU OSS will bring a significant administrative simplification for all those companies that can declare their cross-border sales using the OSS and pay the VAT collectively. Especially for end customers with domicile in several EU countries, the use of the OSS is generally recommended in any case. We will be happy to assist you with registration and quarterly reporting (email@example.com).
PS: Please note, that we are no native speakers and that our blogposts were translated with the help of google translate.