What is the European VAT e-commerce package?
Bookmark the 1st July 2021. It is a monumental date in the European taxation calendar and the day that major VAT reforms take effect within the European Union, shaking up the obligations for e-commerce sellers and marketplaces alike. Europe's e-commerce VAT package will see a number of key changes taking place, including the introduction of the new One-Stop-Shop (OSS) and Import One-Stop-Shop (IOSS) schemes.
Online Marketplaces, such as Amazon and eBay (among others) will be recognised as deemed suppliers, meaning that they will take up the responsibility of collecting and remitting VAT payments to the tax authorities within the EU. The shake-up of VAT legislation does not stop there. Distance selling thresholds across the EU will be withdrawn and a new EU-wide €10,000 threshold will come into effect for EU companies before an e-commerce business is required to register for OSS..
Finally, the LVCR (Low Value Consignment Relief), which is currently applied to goods under €22 in value will also be abolished, which means that all goods imported into the EU will be subject to import VAT, unless IOSS is utilised. Any goods being imported into the EU with a consignment value not exceeding €150 could be declared on an IOSS return.
What is One-Stop Shop (OSS)?
Any business selling goods to consumers in the European Union (EU) will need to understand and implement major new VAT rules from 1 July 2021.
The One-Stop-Shop, or OSS, involves a single registration, where you will be able to report your distance sales with a single OSS return. An EU registered company will be required to register for OSS in their home country, however those businesses located outside of the EU will need to nominate a country where they will file their OSS returns and pay their VAT.
The taxable place of supply for EU distance sales of goods will change from the country of departure to the country of delivery. If you are storing goods within a European country, you will still be required to register for VAT and will be required to file a VAT return for all local sales within that country.
Find out if your business needs to consider registering for OSS below...
What is Import OSS (IOSS)?
The IOSS return is being introduced to declare consignment sales as described above, where imports are made into the EU with a consignment value under €150.
Like OSS, the Import One-Stop-Shop, or IOSS, involves a single identification country. The IOSS return will be filed in this nominated country and will declare sales under €150 arriving throughout Europe. The IOSS return will follow the same format as an OSS return, identifying the supply values per delivery country, enabling the tax authority receiving the IOSS return responsible for allocating the VAT payments to each EU tax authority.
With the AVASK Import One-Stop-Shop (IOSS) expert solution, we will support you in selling to all 27 EU countries whilst ensuring that you remain VAT compliant.
Find out if your business needs to consider registering for IOSS below...
The role of the online marketplace
From the 1st of July, the role of the online marketplace, or OMP, such as Amazon and eBay, is also changing in Europe. The EU's new regulations will see online marketplaces being recognised as deemed supplier for certain sales undertaken through their platforms.
This means that Amazon will be required to collect VAT at the point of sale on behalf of certain sellers and remit it to the relevent tax authorities, depending on the transaction and the seller's circumstances. Transactions of this nature will be declared on Amazon's OSS or IOSS return, rather than the seller's.
Please note: although an OMP may be collecting and remitting VAT sold on goods on their platform, you will still need to file a VAT return for those countries where you have triggered a VAT liability. You will also need to file an OSS/IOSS return for any goods not sold on an OMP, e.g. on your own website.
Please contact AVASK for further advice.
Learn more about OSS and IOSS
Frequently Asked Questions...
The 1st July 2021 is just around the next corner... AVASK are here to ensure that your business is equipped and prepared for these changes now rather than later.
Our One-Stop-Shop (OSS) Frequently Asked Questions eBook will answer many
of the initial thoughts and questions you may have. You will also find common
e-commerce business scenarios which may apply directly to your situation and provide you with further clarity and peace of mind.
Download our free One-Stop-Shop (OSS) eBook today to ensure you are well informed about the up coming changes and are prepared for OSS/IOSS.
Do you need to register for OSS or IOSS?
Before proceeding with our quiz, we strongly recommend reading the information about OSS above. This diagnostic quiz will help you to find out whether you need to register for OSS or Import OSS by answering a few questions in our interactive quizzes below: