One Stop Shop – OSS – what is it and who it concerns

23 April 2021

On July 1, a new EU VAT package for the e-commerce sector enters into force. The change in the regulations in the field of tax on goods and services will apply to online sellers, as well as electronic interface operators, i.e. trading platforms. Who exactly is affected, what does the registration process look like and is it worth implementing the VAT OSS – One Stop Shop procedure?

OSS – One Stop Shop – what is it about?

At the beginning of the second half of 2021, the VAT OSS (One Stop Shop) will enter into force, which will cover entrepreneurs providing telecommunications and broadcasting services, as well as companies selling goods online to individual customers (natural persons) from the EU. The changes, that take effect on 1 July 2021, replace the existing VAT MOSS, i.e. the Small One-Stop Shop in the field of tax on goods and services.

The EU One Stop Shop (OSS) procedure is designed to tighten the tax system and mainly applies to transactions in the B2C sector. At the same time, with the introduction of OSS, the term ESPO (Intra-Community Distance Sales of Goods) is implemented, which replaces the so far existing concept of “mail order sale”.

On July 1 this year, in addition, the thresholds for the value of transactions above which registration and payment of VAT were required in the Member State of the buyer’s registered office are abolished. The new limit will be EUR 10,000 (in Poland it is the equivalent of PLN 42,000), below which an entrepreneur selling under ESPO will continue to be subject to VAT in his country.

If the net amount of the transaction exceeds the equivalent of EUR 10,000, the taxpayer will be required to pay VAT in the buyer’s country. Thanks to the registration in the VAT OSS in the country in which he has a registered business activity (the so-called country of identification), he gains the possibility to submit one VAT declaration once a quarter and to pay the tax due through the country of identification. It is worth noting that these settlements will take place regardless of the obligations arising from submitting JPK_V7 declarations for domestic trade..

Trading platforms in the face of changes in the VAT OSS

These changes will also affect the owners of electronic platforms intermediating in concluding transactions to a large extent. Under the new regulations, it is the trading platforms, such as Allegro, that will be obliged to collect and settle VAT on transactions. It will certainly contribute to the expansion of reporting and reporting obligations for this type of entities.

VAT OSS – is it worth registering?

Starting from April 1, 2021, you can submit registration notifications for the EU / non-EU procedure (OSS), as well as for the IOSS import procedure (non-EU entities selling online to EU customers). Submissions will be processed after the completion of the full legislative process for the e-commerce project. The relatively low value of the threshold (EUR 10,000 / PLN 42,000) creates a high probability of having to register VAT in individual EU countries, which in turn is associated with a number of additional costs.

Therefore, it is worth considering the option of using VAT OSS. For sellers based outside the EU, it will be possible to obtain a VAT exemption for shipments with a value not exceeding EUR 150 – if they decide to use the OSS VAT procedure provided for import. Entrepreneurs from outside the EU will, however, be required to establish an EU intermediary who will be obliged to collect and settle VAT for transactions.

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