Special One-Stop-Shop VAT schemes

What is the One-Stop-Shop (OSS) regime?

Are you an entrepreneur selling products or services in different countries of the European Union? If your answer is yes, then you should know about the special One-Stop-Shop (OSS) VAT regimes. In this post we will tell you what they are, when they apply and how they affect the e-commerce of products and services.

What is the One-Stop-Shop (OSS) regime?

Nowadays many companies are selling products or services to consumers or companies that are located in different countries. In order to simplify the management of the VAT, the One-Stop-Shop (OSS) was created, which aims to make the VAT declaration for entrepreneurs or professionals who sell products or services to consumers located throughout the European Union easier, since with this regime these entrepreneurs will not have to identify themselves and register in each Member State where consumption occurs, but instead they can:

  • Register for VAT purposes in only one Member State for all qualifying sales of products or services to customers within the European Union.
  • File a single VAT return electronically in the Member State in which they are identified and make a single payment of the VAT due on the sales.

To whom do the Special One-Stop-Shop VAT schemes apply?

For a long time the special One-Stop-Shop VAT regimes only applied to businesses in the telecommunications, broadcasting and television sector, as well as to services provided through the internet. But from July 1, 2021 on, the regimes also apply to all services that take place in EU states supplied by entrepreneurs or professionals to private consumers, where the entrepreneur or professional is not established, as well as to the distance sales of goods and domestic supplies of goods.

What special One-Stop-Shop VAT regimes exist?

From our specialized tax consultancy, we can highlight the following special One-Stop-Shop VAT regimes:

– Regime outside the European Union. This regime applies to entrepreneurs or professionals who are not established in the EU but who provide services to people (who are not entrepreneurs or professionals) located in the EU.

– European Union or domestic regime. It applies to businessmen or professionals who carry out operations subject to this regime, regardless of whether or not they are established in the EU. The operations to declare are the following:

  • For entrepreneurs or professionals established in the EU:
    • To provide services to people who are not entrepreneurs or professionals and who are established in the EU in a State other than that of the employer, as long as the services are provided in a Member State in which the employer is not established.
    • Intra-community distance selling.
  • Entrepreneurs or professionals not established in the EU may only declare intra-Community distance selling under this regime.
  • Electronic interfaces or marketplaces (located inside or outside the EU) that are considered to be passively involved in the delivery of goods can declare the following operations:
    • Intra-Community distance sale of goods in which they intervene, as long as the seller of the products is not in the EU.
    • Domestic deliveries of goods, if the seller is not in the EU.
  • Import regime. It applies to entrepreneurs or professionals who may or may not be established in the EU, who carry out the activity of distance selling of goods imported from countries or territories through shipments whose intrinsic value does not exceed 150 euros, with the exception of products that are subject to excise duties.

How do special regimes affect e-commerce?

E-commerce has seen how the applicable VAT regime has been modified with the new European regulations that have led, at the same time, to the modification of the VAT Regulation. In these cases, the transactions are subject to the VAT of the Member State in which the goods are received by the recipient, by application of the principle of destination taxation of cross-border VAT transactions.

As we have seen, the new regulation brings about two important changes:

  • E-commerce benefits from the application of the special One-Stop-Shop regime, making it unnecessary for them to register and pay taxes in each country where they operate.
  • Marketplaces or digital interfaces will collaborate in the collection and management of VAT.

In short, the aim of the amendments to the applicable VAT regulations is to simplify the formal obligations of entrepreneurs, so that it is not necessary for them to register for VAT purposes in each country where the consumption of their products or services takes place, but rather a single registration is enough.

In order to find out if one of these special One-Stop-Shop VAT regimes is applicable to your company, it is essential that a business consultancy specialized in taxation carries out an analysis and studies your case and the best way to pay taxes.

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