The following is a guest post by hellotax.
If you thought that Brexit brought the biggest changes for European online sellers, you probably have not heard about One Stop Shop (OSS) yet. The new VAT reform took effect on July 1, 2021 and has the potential to significantly simplify your VAT registration and VAT filings. In this article, we are going to explain what OSS entails and how to find out if you would benefit from using OSS.
What is One Stop Shop (OSS)?
OSS is not completely new. In 2015, Mini One Stop Shop (MOSS) was introduced for telecommunications, broadcasting and electronic (TBE) services and made it possible to register for VAT in one country only, instead of every country that your customers were based in. Now the One Stop Shop is basically an extension of this concept and applies it to cross-border B2C online sellers.
This means that under certain circumstances, you can from now on opt to only register for VAT filings in one country, saving yourself the time and effort it takes to file for VAT in multiple countries and ensure compliance with local VAT regulations.
The new distance selling thresholds and IOSS
But first, let us focus on the other aspects of OSS. Not only are VAT registrations harmonized and simplified, but also the VAT thresholds, which before had been different for each individual country, are now being replaced with a single VAT threshold. This threshold will be applied EU-wide and is set at 10,000€ for all countries combined.
There is also the Import One Stop Shop (IOSS) for goods imported from outside the EU. The VAT exemption for items valued at 22€ or less will be abolished and VAT now has to be collected on these items as well. Sellers can collect, declare, and pay import VAT for all goods of a value of up to 150€. If they decide not to, the customer has to pay VAT and sometimes additional fees upon delivery.
What does OSS mean as an online seller?
Neither OSS nor IOSS are mandatory, so your participation in these processes is voluntary. This means that you need to make a well-informed decision if you as an online seller are going to benefit from OSS and IOSS or not.
OSS is not applicable, at least for now, for B2B transactions as well as domestic B2C sales. You also still have to register for VAT individually in each country where you store goods, regardless of whether it is your own storage or you are using services like storing goods through Amazon.
The Advantages of OSS and IOSS
As we have seen, OSS is not a comprehensive reform for all aspects of online selling. However, it does significantly simplify one area of VAT registrations and filings. If you decide to use OSS, you may be able to deregister in some countries and stop having to keep up with multiple countries’ VAT regulations.
In addition to more consistent rules for import VAT, IOSS also presents the possibility to deliver comfortable customer service by taking care of import VAT for the customer.
With the new One Stop Shop VAT reform, the EU offers a possibility to simplify your VAT filings for cross-border B2C sales.
If you want to further simplify VAT registration and VAT filings, VAT automation can be a solution for you as an online seller. hellotax is a software for VAT automation for online sellers. Not only can you register for VAT in all EU countries, you can also submit your VAT filings through hellotax. The software does also keep an eye on the VAT threshold, notifying you when you need to make some changes. It is always up to date to ensure compliance with latest VAT regulations and will support you making the change to OSS and IOSS. hellotax also offers integration with Amazon for Amazon sellers. Other marketplaces like eBay or Shopify and others will be supported soon. Up until then, data from these marketplaces can be uploaded manually.