One Stop Shop – OSS – What It Is and Who It Applies To

OSS – One Stop Shop – What Is It About?

Starting from the beginning of the second half of 2021, VAT OSS (One Stop Shop) will come into effect, covering entrepreneurs providing telecommunications, electronic, and broadcasting services, as well as companies engaged in online sales of goods to individual customers (natural persons) from the EU. The changes coming into force on July 1, 2021, replace the previously functioning VAT MOSS, or Mini One Stop Shop for value-added tax.

The EU One Stop Shop (OSS) procedure is designed to tighten the tax system and primarily concerns transactions in the B2C sector. At the same time, with the introduction of OSS, the term WSTO (Intra-Community Distance Sales of Goods) is being implemented, replacing the previously applicable concept of “mail order sales.”

As of July 1 of this year, thresholds regarding transaction values above which registration and payment of VAT in the member state where the buyer is based were required are being abolished. The new limit will be 10,000 euros (in Poland, the equivalent of 42,000 PLN), below which an entrepreneur making sales under WSTO will continue to be subject to VAT in their own country.

If the net transaction amount exceeds the equivalent of 10,000 EUR, the taxpayer will be required to pay VAT in the purchaser’s country. By registering for VAT OSS in the country where they have registered their business activity (the so-called Member State of identification), they gain the ability to submit one VAT return per quarter and pay the tax due through the Member State of identification. It is worth noting that these settlements will be made independently of the obligations arising from submitting JPK_V7 declarations for domestic trade.

Trading Platforms in the Face of VAT OSS Changes

VAT OSS – Is It Worth Registering?

Starting from April 1, 2021, registration applications can be submitted for the Union/non-Union procedure (OSS), as well as for the IOSS import procedure (entities from outside the EU conducting online sales to customers in the EU). Applications will be processed after completion of the full legislative process for the e-commerce project. The relatively low threshold value (10,000 EUR/42,000 PLN) creates a high probability of the need to register for VAT in individual EU countries, which in turn involves a number of additional costs.

It is therefore worth considering the option of using VAT OSS. For sellers based outside the EU, there will be the possibility of obtaining a VAT exemption for shipments with a value not exceeding 150 euros – if they decide to use the VAT OSS procedure provided for imports. However, entrepreneurs from outside the EU will be required to appoint an EU intermediary who will be obliged to collect and settle VAT for transactions.