By 30 June 2021 at the latest, online merchants will have to ask themselves the question: Do I register in every EU member state I deliver to or do I report my sales via the central EU contact point OSS?
How the OSS works
The One-Stop Shop option can only be used in all EU member states in total. It is not possible to pick and choose, i.e., mix distance sales registrations in some countries and simultaneously use the OSS in other Member States.
In Germany, the office responsible for the One-Stop Shop is the Federal Central Tax Office, BZSt, in Saarlouis. Each EU Member State has its own electronic portal where merchants based in that country can register.
The One-Stop Shop allows merchants to declare and pay for all their sales within the European Union centrally in just one EU Member State (and not all 27!). This single declaration includes all sales of goods in the EU Member States along with the incurred VAT broken down to the individual countries. Payment of the resulting VAT liability is also made to the OSS.
What merchants need to do now
Merchants will have to deal with foreign VAT laws, i.e., with the laws of all EU Member States in which they sell their goods, far more intensively than before.
They must decide whether to register for distance sales in the individual EU27 countries or to choose the OSS option. In both cases, the necessary registrations must be applied for now to be ready in time for July 1, 2021.
„By changing the country-specific delivery thresholds to an EU-wide delivery threshold now totalling EUR 10,000, nearly every trader who conducts cross-border trade in the EU will be affected.“
If merchants choose the OSS and already have VAT registrations in other Member States as a result of the expiry of the mail order rule, corresponding de-registrations must be submitted by June 30, 2021.
Merchants are also faced with the question of which VAT rate needs to be applied for each of their products in the EU27. Regular, reduced, tax-exempt, exception, withdrawal, etc. – with 27 Member States and a multitude of rules and regulations, this is the real mammoth task that is all too often overlooked. Therefore, merchants should not underestimate this issue and should already be dealing with it now.
The online seminar “What you need to know about the EU’s OSS”*, in which our experts explain the upcoming changes and point out the new VAT obligations, will support you in this.
*The online-seminar will be held in German.