E-Commerce & B2C Services in Ireland
The EU VAT reform implemented on July 1, 2021, impacts all EU and Irish e-commerce business owners engaged in cross-border transactions within member states or importing goods from outside the EU. The introduction of the One-Stop-Shop (OSS) under this reform allows businesses to register and submit quarterly VAT returns in one EU country. Additionally, the Import One-Stop-Shop (IOSS) was established for imported goods.
Read more about B2C services & E-Commerce in Ireland in our comprehensive guide.
B2C Services in Ireland
The determination of the place of supply is crucial in determining whether or not Irish VAT applies to a transaction. The VAT Act’s Sections 33 and 34 outline the place of supply rules for services, which differentiate between supplies made to taxable persons (B2B) and end-users who are not running a business (B2C). In Ireland, B2B service supplies are generally considered to be made where the recipient’s business is established (or where a fixed establishment is situated if it receives the service and is located in a different state than where the business is established), regardless of the service provider’s location. This is subject to some exceptions.
B2C supplies of services are generally treated as being made where the supplier is established (or where it has a fixed establishment which supplies the services, if this fixed establishment is in a State other than that in which the supplier’s business is established), subject to certain exceptions.
Accordingly, the VAT concept of “establishment” is key for determining where the service is taxed under these rules
A digital product refers to any item or service that is electronically stored, transported, and used, including those obtained through email, website login, or Internet download. To sell digital products in another EU member state, such as Ireland, registration with the One-Stop Shop (OSS) is required.
The VAT One-Stop Shop (OSS) is a voluntary system that enables businesses to account for VAT in a single EU country. If you offer cross-border digital services, telecommunications, or broadcasting to a non-taxable individual, you may be eligible for this system.
Among the OSS services are:
- website hosting
- supply of software
- access to databases
- downloading apps or music
- online gaming
- distance teaching
- accommodation services carried out by non-established persons
- admission to cultural, artistic, sporting, scientific, educational, entertainment events, fairs & exhibitions
The OSS eliminates the need for you to register with tax authorities in each EU country where you sell. Instead, you can register for VAT, file VAT returns, and make payments in a single location under the OSS framework. You must apply the rules of the OSS scheme to all your clients in all the EU nations to which you provide services or products.
Currently, there are two schemes in operation under OSS:
- The union scheme, which is available to enterprises that have been formed in the EU or that have at least one branch in an EU country – fixed establishment.
- The non-union scheme is intended for enterprises that have not been created in the EU and do not have any branches in the EU – can register in the Member State of their choice.
If a non-EU company hires an intermediary in the EU to conduct distance sales on its behalf from outside his or her EU Member State, the intermediary must register in the Member State where the intermediary is located.
An individual who has registered for the One-Stop Shop (OSS) is obligated to file VAT returns electronically with the Member State of identification every quarter. If the business is enrolled in the Import One-Stop Shop (IOSS), monthly returns are required. These returns must be filed by the end of the month following the conclusion of the tax period. Subsequently, the Member State of Identification transmits these returns, along with the VAT paid, to the Member States of Consumption through a secure communication network.
Those who register for an OSS in Ireland are required to maintain comprehensive records of transactions covered by the program and to file a specific VAT report with the Irish tax office electronically. OSS records should be kept for ten years from the end of the year in which the transaction is completed and made available electronically to the relevant authorities upon request.
Selling in Ireland?
E-commerce Distance Sales
Section 29 of the Irish VAT Act outlines the general place of supply regulations for goods, which align with the standardized EU guidelines for the place of supply of goods. According to these regulations, goods that are situated in Ireland and do not require removal from the country are deemed to be supplied within Ireland. In contrast, goods that are situated outside of Ireland and do not require entry into Ireland are regarded as being supplied outside of Ireland.
The following additional rules apply under Section 29:
- Goods that are not dispatched or transported in the course of their supply have, as their place of supply, the place where the goods are located at the time of supply.
- A supply that involves the physical transport of goods is generally treated as supplied where the transport begins. Therefore, if goods are dispatched or transported from Ireland to another jurisdiction, the supply is generally regarded as being made in Ireland. However, subject to certain conditions being met, the supply is subject to VAT at the zero rate as either an “intra-Community dispatch” or an “export.” The term “export” is typically used to describe the sale of goods to a country outside the EU, whereas the supply of goods to another EU Member State are generally regarded as “dispatches” or “intra-Community supplies”.
- If goods are installed or assembled by or on behalf of the supplier, the supply takes place where the goods are installed or assembled.
- If goods are supplied on board vessels, aircraft or trains during intra-Community transport, the place of supply is where the transportation begins.
- Supplies of gas and electricity, heat and cooling energy to a taxable dealer are generally taxable at the place where the taxable dealer is established or has a fixed establishment for which the goods are supplied. Where these supplies are made to a final consumer (i.e., not a taxable dealer), they are taxable at the place of consumption under Section 31 of the VAT Act.
Further Information
The recent EU VAT reform, effective July 1, 2021, impacts businesses that engage in cross-border transactions within the EU or import goods from outside the EU, particularly those involved in e-commerce. The reform introduced the One-Stop-Shop (OSS) system, which enables companies to register for VAT and file VAT returns on a quarterly basis in a single EU country. In addition, a new scheme called the Import One-Stop-Shop (IOSS) was created specifically for imports.
The One-Stop Shop (OSS) model extends the previous Mini One-Stop Shop (MOSS) scheme to include VAT on certain digital products in the EU. The objective of both schemes is to simplify tax compliance and reduce administrative burdens for businesses, while increasing tax collection. The OSS scheme allows businesses to register for VAT and file VAT returns in a single country, eliminating the need to keep track of different distance selling thresholds in each country. Instead, an EU-wide threshold of EUR 10,000 applies. The OSS (One-Stop-Shop) is developed for EU enterprises selling goods to customers within the EU. In the EU, IOSS is meant for non-EU enterprises selling items worth up to EUR 150 to EU clients. In this case, ordinary VAT import regulations apply.
Last Updated: 06/10/2023
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