EU's new VAT registration scheme - OSS

Starting July 2021 there is a new system of VAT registration and compliance calles One Stop Shop (OSS). How will those changes affect you?

Ever since the beginning of 2015 businesses providing broadcasting, telecommunications and e-services to customers in other EU countries were able to register in the Mini One Stop Shop (MOSS) scheme.

Starting the 1st of July 2021, this scheme now includes more services with place of supply in an EU country, selling goods to customers located in other EU states or selling goods by an online marketplace. This scheme is no longer meant for e-services only.

How does the OSS scheme work?

Businesses no longer have to register for VAT separately in each country they overstepped the VAT limit - starting July businesses can only register in the OSS scheme and pay VAT to one tax office that will redistribute the tax among other countries' tax offices.

For instance, if you are a German business owner selling goods to other EU countries, you can now sign up to the OSS scheme at the German tax office. This office is who you will pay VAT to and where you will submit your tax returns for each EU country separately.

The OSS scheme is voluntary. If you choose to not sign up to the OSS scheme you can continue paying VAT in each country separately. Each country has its own registration form. Businesses who registered to the MOSS system and want to continue staying VAT compliant using the OSS scheme don't have to register again.

The new OSS will have 3 schemes:

1. Union OSS
2. Import OSS (IOSS)
3. Non-union OSS

1. Union OSS

Union OSS is meant for all businesses registered in the EU that:

• are based in an EU member state
• aren't based in the EU but have an establishment in one of the EU member states
• start the shipping process in an EU member state
• are an online marketplace - shipping goods of a foreign seller through an online marketplace (such as Amazon)

The Union OSS scheme can be used for:

• selling goods to final customers in other EU countries
• providing services to final customers in other EU countries
• selling goods to final customers using an online marketplace (such as Amazon)

A taxable person established in the EU (who is not a deemed supplier) can use the Union OSS for:

• Supplies of B2C services taking place in a Member State in which he is not established.
• Distance sales of goods within the EU.

A taxable person not established in the EU for:

• Distance sales of goods within the EU .

An electronic interface (established in the EU or outside the EU) facilitating supplies of goods (deemed supplier) for:

• Distance sales of goods within the EU.
• Certain domestic supplies of goods.

2. Import OSS (IOSS)

A taxable person established in the EU (who is not a deemed supplier) can use the Import OSS for:

• Distance sales of goods from non-EU countries not exceeding 150 euros in value and which are not subject to excise duty.

the Import OSS can't be used for:

• selling imported goods exceeding 150 euros in value.
• selling imported goods that are subject to excise duty.
• importing goods by the final customer.

3. Non-Union OSS

This scheme can be used by businesses based outside of EU.

A taxable person established in the EU (who is not a deemed supplier) can use the Non-Union OSS for:

• selling goods or services to EU based final customers by taxable persons based or established outside of the EU who aren't currently using the Non-Union OSS scheme in any other EU member state.