The One-Stop-Shop Value Added Tax Return (OSS-VAT) in the European Union at a Glance

Since July 1, 2021, companies based within the European Union can register for the One-Stop-Shop and submit the OSS Value Added Tax return (also: OSS-return) for Intra-Community distance sale of goods as well as services via a national central online platform.

This expert contribution provides an overview and useful information about the topic One-Stop-Shop.

Distinction Between Intra-Community Distance Sales of Goods and Domestic Sales

Sales are divided into two categories:

Domestic sale: The term domestic sale refers to all sales to end customers within a country without crossing a border.

Intra-Community distance sale: The term Intra-Community distance sale refers to all cross-border sales to end customers within the European Union.

Introduction of an EU-wide delivery threshold

Prior to the introduction of the One-Stop-Shop, each country within the European Union had its own delivery threshold.

These individual delivery thresholds were replaced by an EU-wide delivery threshold of EUR 10,000 (net) as of July 1,2021.

To determine whether the EU-wide delivery threshold has been exceeded, companies must include all their Intra-Community distance sales and services.

In the first step, all Intra-Community distance sales and services in a calendar year are added together until either the net value is below EUR 10,000 at the end of the calendar year, or the EU-wide delivery threshold is exceeded on one day during the calendar year.

If the EU-wide delivery threshold is exceeded and no registration for the One-Stop-Shop has been submitted, the next sale in the country of destination is taxable. The amount of the sale is irrelevant here.

Registration for the One-Stop-Shop

Generally, the participation in the One-Stop-Shop procedure is voluntary and takes place at the competent authority in the country of the company head office.

In most cases, registration must be submitted via an online portal. Depending on the country, access to this online portal must first be obtained by creating an online account or by applying for a digital certificate.

It is important to note that registration for the One-Stop-Shop can only take place to the next possible quarter.

Usually, a retroactive registration is not possible.

Characteristics of a VAT Group

If the company is part of a VAT group, the VAT group parent company must be registered for the one-stop shop. The OSS report from the VAT group subsidiary company is also submitted via the VAT group parent company.

Domestic Sales Must Still Be Submitted via the Local Value Added Tax Return

If the departure and arrival country are identical when selling goods or providing services, this business actions must be reported via the local Value Added Tax return of the country of departure and the VAT due must be paid there.

Usage of Warehouses Within the European Union

The usage of a warehouse within the European Union, is a triggering condition for registration for Value added tax number in the country of the warehouse.

Intra-community movements of goods between two warehouses must still be submitted within the local Value Added Tax returns of both the country of departure and the country of destination.

Value Added Tax Registrations Prior to July 1, 2021 Are Still Valid

If a tax registration was already obtained before July 1, 2021, this will remain in place even if all Intra-Community Distance Sales of Goods are submitted via the OSS Value Added Tax return.

This means that value added tax returns must continue to be submitted on time. This includes nil returns, which must be submitted by the deadline even if there were no movements of goods, domestic sales, or other reportable business actions.

The obligation to report in the country of destination ends with the tax deregistration.

Companies should review whether they still need to be registered for value added tax purposes.

Exclusion form the One-Stop-Shop

Companies can be excluded by authorities from participating in the one-stop shop for breach of duty.

The duties include, among other things, the timely submission of the OSS report and the timely payment of the VAT due.

Responsible authorities usually inform affected companies in writing that they are excluded from the one-stop shop due to a breach of duty.