Get clarity on how the EU’s One-Stop-Shop (OSS)
Streamlining E-commerce VAT Reporting
The EU’s One-Stop-Shop (OSS) allows businesses to register for VAT in one EU Member State and report/pay VAT on all e-commerce sales within the EU through a single portal. This simplifies compliance and reduces administrative burden.
The Three OSS Schemes
The OSS consists of three separate schemes – the non-Union scheme, Union scheme, and Import One-Stop-Shop (IOSS). Businesses established in the EU can use the Union scheme and IOSS, while non-EU businesses can potentially use all three schemes.
Optimising Benefits for Businesses
To maximise benefits, businesses should carefully review which scheme(s) they are eligible for based on their establishment status and types of sales. Using the OSS can significantly reduce VAT compliance obligations.
EU VAT Schemes
For the non-Union scheme, businesses register in one EU Member State to report VAT on all services supplied to EU consumers. For the Union scheme, VAT on goods/services sold cross-border to EU consumers is reported. The IOSS is for imported goods below €150.
Registration and Reporting Process
Registration is done electronically in the chosen Member State. VAT returns and payments are submitted quarterly (non-Union/Union) or monthly (IOSS). Corrections can be made for 3 years.
Compliance Requirements and Obligations
Records of transactions must be kept for 10 years and provided electronically upon request. VAT deductions still require existing processes (e.g. VAT refund procedures).
Leveraging OSS for Growth in the EU Digital Single Market
Using the OSS can help businesses grow within the EU Digital Single Market by reducing VAT compliance costs. But businesses must review eligibility and register for the appropriate scheme(s) based on their situation. Careful implementation is key to maximising benefits.
READ MORE : VAT for Beginners: Irish VAT Explained with 7 Key Points
Summary
The OSS can significantly reduce VAT compliance costs for e-commerce businesses selling cross-border to EU consumers. But businesses must take time to understand the schemes, confirm eligibility, register for the right scheme(s), maintain proper records, and utilise the centralised reporting/payment system to maximise benefits. Careful analysis and execution is critical.
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