From July 1, 2021, the new regulations for e-commerce will come into effect. These regulations will change the position of suppliers and online marketplaces. These changes mean that sales tax is levied in the country of consumption.
In addition, it will be easier for governments to levy sales tax. However, there is also good news for entrepreneurs, because the new regulations make it possible to submit one central declaration via the One Stop Shop (OSS) for sales to consumers within the EU. The OSS will provide a significant (administrative) reduction in the burden.
The Mini One Stop Shop was introduced on Jan 1st, 2015 and allows taxable persons supplying TBE services (telecommunications, broadcasting, and electronic) to non-taxable persons in Member states in which they do not have an establishment to account for VAT. This is done via a web-portal and it allows these businesses to avoid having to register for VAT in each Member State in which they offer their services.
The new One Stop Shop will be extended to all B2C services and it will also apply to all distance sales of goods within the EU and to certain domestic supplies of goods facilitated by online marketplaces.
Registering for the OSS is therefore very attractive, because all VAT obligations for distance sales throughout the EU are met via one central declaration. Registering for the OSS is only possible for EU entrepreneurs in the EU country of residence. If you are located outside the EU, you can choose the Member State of registration yourself. The country from which you ship goods to consumers may be a choice.
From April 1, 2021, entrepreneurs based in the Netherlands will be able to register for the OSS. For entrepreneurs who are not established in the Netherlands, registration is expected to be open from mid-May 2021.
• MOSS registrations will not be automatically transferred to OSS but you have to separately register for OSS in the Netherlands
• For EU businesses OSS registrations are possible from 1 April in the Netherlands
• For non-EU businesses OSS registrations are possible from 7 May in the Netherlands
• The EU Member State (MS) in which you can register for the OSS depends on a number of factors.
If OSS is used then there will be no need to file VAT returns in all EU MSs where the VAT is due. All B2C sales could be reported via a quarterly return to the “own” tax authorities under OSS (so-called “OSS VAT return”).
EU businesses must register for the OSS in their own EU country. Non-EU business without a fixed establishment in the EU supplying goods across the EU from the stock located in one or more of the EU Countries must register for Union Scheme in one of the EU countries where the stock of their goods is located (in one of the EU member states of the departure of the goods).
Global VAT Compliance can help you register for the OSS and take care of all of your VAT obligations so you can focus on your expanding business. Click below to contact us for more information.