The most significant reform of the EU VAT regime not only comes with simplifications for online sellers and tax consultants, but also a number of pitfalls.
Read our extensive article on the One Stop Shop and learn everything you need to know about the OSS scheme itself, registration and regular use, as well as the scope and exceptions.
This way, you’ll be informed and ideally prepared for your upcoming VAT obligations for international deliveries throughout the EU.
Good to know: Taxdoo will offer an automated solution for the One Stop Shop. If you’re not yet a customer, you can learn more about it during a personal live demo which you can book here.
Summary: The most important facts about the One Stop Shop
Here are the most important facts that you as an online seller or tax advisor should know and observe due to the introduction of the OSS procedure from 01.07.2021:
- The previous distance-selling thresholds of the individual EU countries (EUR 35,000 or EUR 100,000) for sales to private customers abroad no longer apply.
- Instead, a Europe-wide distance-selling threshold of EUR 10,000 (net) will apply to all EU countries in total from 01.07.2021.
- This will make the vast majority of online sellers liable to tax in every EU country to which they send even one parcel.
- Regular VAT returns required for all EU countries can be filed centrally via the One Stop Shop (OSS) in the country in which the company is based. In Germany, this is the Federal Central Tax Office (BZSt).
For this purpose, it must be decided on an individual transaction basis in which country and with which VAT rate a transaction is to be taxed.
- OSS reports are submitted quarterly and must be submitted within one month of the end of the previous quarter.
- VAT is also paid centrally in one sum via the One Stop Shop in the online seller's country of residence. The amount of VAT collected is then divided by the OSS and automatically distributed to the respective EU countries.
- Local VAT registrations and submission of returns in other EU countries will no longer be necessary for cross-border B2C deliveries to end customers (= distance selling) when using the OSS scheme.
- The use of the OSS scheme is voluntary.
- If you use warehouses abroad, e.g. within the framework of Amazon Pan EU or CEE, you still have to carry out local registrations and declarations in the respective warehouse country.
- B2B deliveries cannot be reported via the One Stop Shop, here everything remains as before with local submissions of VAT returns in the country of origin.
- B2C deliveries to the seller's own country (country of residence) are not declared via the OSS, but as usual to the local tax office. However, this does not apply if the sale is made from a warehouse in another EU country.
- You can register with the German One Stop Shop via the online portal "MeinBOP" of the Federal Central Tax Office.
- In future, it will have to be decided on an individual transaction basis which transactions can be reported via the OSS and which cannot. Taxdoo can handle this distinction automatically and make it available in a completely processed form.
- Taxdoo can provide you with all transaction data for the OSS reports in a collected and structured form, as well as continue to handle the necessary registrations and filings in other EU countries.
New tax obligations apply from July 2021 with the OSS scheme – in (almost) all EU states
International sales to end customers within the EU will almost always need to be taxed in the destination country from 1 July 2021.
The One Stop Shop is then set to simplify many aspects of VAT in online trade. VAT returns with tax liability abroad can then be reported in the country of residence via the One Stop Shop.
However, this will only be possible for certain types of transactions. Sellers that take part in Amazon’s Pan-European FBA programme or use other cross-border fulfilment systems, for example, will require additional solutions.
Unfortunately, the regulatory framework behind it – the second stage of the VAT e-commerce package – will already be outdated before its introduction.
But let’s start from the beginning and answer the following questions.
1. What is the reason for this reform?
2. Why has the process been so turbulent?
3. Who and what benefits from the reform?
4. How can you prepare as a tax consultant or online seller?
EU VAT e-commerce package: How did this major VAT reform come about?
VAT law in the European Union (EU) is still largely unchanged from 1993 and is no longer compatible with the rapidly advancing development of online trade.
To free up the internal digital market from precisely these barriers, all EU member states agreed at the end of 2017 to translate the VAT e-commerce package – with the One Stop Shop as the central element – into national law. The plan was to implement the reform by 1 January 2021. However, the date was pushed back from 1 January 2021 to 1 July 2021 as many member states had difficulties providing the technological platform for the One Stop Shop.
First, we’ll cover the status quo and then explain the change to the system.
The distance selling regulations and distance-selling thresholds still apply prior to the One Stop Shop
Distance-selling thresholds were introduced back in 1993 to prevent small and medium-sized enterprises (SMEs) from having to register for VAT in every EU country they send goods to – no matter how low the volume. These thresholds also mean that SMEs do not have to seek support from local tax consultants in these cases, which would be potentially costly. Up to this limit, online sellers are allowed to continue to report their cross-border sales within the EU to their local tax authority.
Principally, the value of the distance-selling threshold should be 100,000 euros. EU member states may, however, reduce this amount to 35,000 euros – which is what almost all member states have indeed done. There are only three countries that still apply a distance-selling threshold of 100,000 euros:
Once a distance-selling threshold is exceeded, the following three steps should be noted:
1. The sale that led to the distance-selling threshold being exceeded must be taxed in the destination country – i.e. the country in which the recipient is located. The VAT rate valid there must be applied. Here it is important to note that the range of standard tax rates in the EU varies from 17 to 27 percent.
2. It is necessary to notify the tax authority responsible in the destination country and register for tax purposes.
3. Then, VAT returns must be submitted on an ongoing basis and the VAT paid for the relevant international sales.
Especially in connection with company audits and special VAT audits, you’ll need to deal with the distance-selling thresholds and existing regulations for a few years, since the audits conducted by tax authorities can always occur several years retrospectively.
In the following section, we explain how this system will fundamentally change from 1 July 2021.
EU VAT e-commerce package: Distance selling from 1 July 2021
The second stage of the VAT e-commerce package, which all EU countries are required to implement in national law by 1 July 2021, provides for the discontinuation of all national distance-selling thresholds. They are to be replaced by a single pan-EU distance-selling threshold of 10,000 euros.
Cross-border sales within the EU to consumers – known as distance selling – need to be taxed in the destination country from 1 July 2021, once the standard distance-selling threshold of 10,000 euros (net) is exceeded.
When does the 10,000-euro threshold apply?
The standard threshold value of 10,000 euros (net) per calendar year applies to the following cases from 1 July 2021:
● Intra-Community distance selling
● Digital services (e.g. streaming or e-books)
Whenever this amount is exceeded for cross-border sales and/or digital services, these sales must always be taxed in the destination country. This means that even just one package to Malta or Lithuania, for example, will then need to be taxed in the destination country.
Since the reform enters into effect at the exact half-year mark on 1 July 2021, this raises the question of how the different old distance-selling thresholds and the standard new one need to be calculated for the calendar year 2021.
Application of the standard distance-selling threshold in the 2021 tax period: Distance-selling thresholds are not halved
In terms of the standard threshold of 10,000 euros (net) for distance selling and digital services, many of you are asking yourselves how this distance-selling threshold should be applied in the 2021 reporting period, during which both the old system of distance selling regulations including national distance-selling thresholds and the new OSS process come together.
Please note that no pro rata allocation of the 10,000-euro net sales threshold should be performed for the 2021 tax period. Likewise, the “old” distance-selling thresholds should also not be allocated on a pro rata basis in line with the old regulations.
Moreover, sales and digital services executed in calendar year 2020 and in the first half of 2021 must also be taken into account for the assessment of the standard distance-selling threshold in 2021.
This will result in a tax obligation arising in almost every EU member state to which even only a single parcel is sent.
You would therefore be justified in asking where the simplification in this VAT reform for online trade comes in.
The answer lies in the key technology of the One Stop Shop.
The One Stop Shop is a platform locally developed by each EU member state and serves as a single point of contact for ensuring central VAT compliance in the country of residence or registration. Online merchants that become liable to pay tax in other EU member states in the future as a result of their cross-border B2C sales can report their sales via the One Stop Shop and also settle their VAT payments on the platform.
The relevant tax authorities in the country of residence or registration will then distribute the reported revenues as well as the VAT collected to the respective EU member states. This ensures that merchants do not need to locally register for tax purposes in every single EU country and continuously submit their VAT returns as soon as the pan-EU distance-selling threshold of 10,000 euros has been exceeded.
Note: The predecessor to the One Stop Shop – the Mini One Stop Shop – which was previously used to report cross-border digital services performed for private customers, will be integrated into the One Stop Shop from 1 July 2021. So there will no longer be a separate MOSS scheme in the second half of the year. The OSS will become the single point of contact for cross-border distance selling and digital services.
The following characteristics of the OSS scheme are intended to provide extra incentives to use this technology:
● Those who report their cross-border B2C sales (distance selling) via the One Stop Shop no longer need to issue invoices for these sales.
● The reporting period is always quarterly – in other words, the OSS returns always have to be submitted by 31 January, 30 April, 31 July and 31 October of the respective year at the latest.
● The payment term amounts to 30 days following the end of the reporting period.
● The VAT is also transferred to the relevant tax authority of the country of registration.
● Corrections for erroneous OSS returns are always entered in the current OSS return.
That all sounds good. But not everyone will be able to enjoy the benefits.
One Stop Shop: Who benefits from the OSS and who will find it more complicated?
Anyone who has dealt with tax law for some time knows that tax reforms always constitute a race between the tortoise and the hare – between agile reality and rigid standards. Particularly in the dynamic environment of online trade, major legal reforms that seek to provide simplification seem predestined to fail.
This can also be seen with the One Stop Shop. While some will benefit, online trade as a whole – including the technologies of 2021 – will not, however.
For whom does the One Stop Shop (OSS) provide a simplification? Companies that only carry out distance selling from a central warehouse!
In online trade, the One Stop Shop will only be a fundamental simplification for companies that dispatch products from a single central warehouse to consumers in other EU countries.
This is due to the fact that only distance sales may be reported via the One Stop Shop for online trade within the EU – i.e. sales from one EU country to consumers in another EU country.
Note: As part of the legal changes entering into effect on 1 July 2021, a single point of contact for imports will also be set up, the Import One Stop Shop (IOSS). The Import One Stop Shop can be used for deliveries imported from a third country with a value of up to 150 euros.
This raises the question: How can you recognise consumers in a highly automated system like online trade?
The answer is that distance selling is always deemed to exist where no valid foreign VAT identification number (VAT ID) is provided.
In addition to online sellers who carry out distance selling throughout the EU, marketplaces may also use the One Stop Shop. From a VAT perspective, marketplaces and operators of electronic interfaces in general will in future be included in the supply chain of third-country online merchants in the EU to the extent that they are liable to pay tax in the recipient country of the goods.
Note: This regulation reflects the fact that marketplaces based in the EU are often more accessible for European tax authorities than online merchants based in a third country. In order to reduce the administrative workload here as well and avoid the local registration of interface operators in all member states, operators of electronic interfaces are able to use the One Stop Shop scheme.
The “Union One Stop Shop”, Amazon Pan-European FBA, Amazon CEE and quick fixes in 2020
Online sellers that use cross-border fulfillment by Amazon Pan-European FBA, Zalando Fulfillment or other marketplaces can use the One Stop Shop in their country of residence or registration.
However, it will also be necessary to deal with local tax registrations in other EU countries.
Indeed, these fulfilment structures reveal that the reform has failed to keep pace with the times. Consumers want to receive their orders as quickly as possible – and it is only possible to satisfy this wish if the goods are placed as close as possible to the customer even before the order is submitted. A marketplace like Amazon handles this service for sellers and has perfected this highly technological form of logistics.
In particular, Amazon commingling transactions increase the complexity of VAT and cannot be handled by the OSS interface.
With Amazon, this inevitably results in the corresponding goods being sent to at least six countries within the EU – and with constant warehouse transfers depending on the forecasted demand and warehouse capacity.
This is where the complexity begins from a VAT perspective. The constant cross-border stock transfers – often several times per month – accordingly constitute taxable sales:
· Intra-Community movements in the country of origin
· Corresponding intra-community purchases in the destination country
The following graphic illustrates the issue based on the example of fulfilment centres in Poland and the Czech Republic:
The associated VAT-relevant transactions – intra-Community movements or purchases, local sales and inputs (input VAT) in the country of the respective fulfilment centre – can’t be reported using the One Stop Shop and still need to be disclosed via local registrations in the individual member states.
If you don’t report your stock transfers through Amazon (i.e. intra-Community movements), you are required to pay VAT on them from 1 January 2020. The legal reforms behind this were the 2020 quick fixes.
You therefore need to introduce at least two lines of compliance:
● Reporting all distance selling via the OSS in the country of registration
● Reporting intra-community purchases/movements, local sales and inputs in other EU countries via local registrations in the respective EU country.
Which tax rate for what product in which EU country? The challenge only grows!
When you realise that the discontinuation of the distance-selling thresholds means that cross-border sales to consumers will become tax-liable in almost every EU country, you may be justified in asking: How do I know which tax rate applies to my products in which EU country?
The issue of tax rates and VAT within the EU is really complicated. EU law permits the following range and therefore offers far more leeway than we are used to in Germany with the two tax rates of 7 and 19 percent:
● Standard tax rate: Here, the range in the EU lies between 17 and 27 percent. The minimum statutory amount is 15, and there hasn’t been an upper limit for quite a few years now.
● Reduced tax rate I: This has to amount to at least 5 percent and less than 15 percent. Its application is limited to the products named in Annex III of the EU VAT Directive
● Reduced tax rate II: The same requirements apply as for the reduced tax rate I.
● Zero tax rates: As the name suggests, the tax rate here equals zero percent. But this is not to be confused with a tax exemption.
● Special rates: These can be chosen almost arbitrarily – but only after approval by the EU Commission. They are often subject to a time limitation.
This range of tax rates is fully utilised by many member states, and it makes determining the correct tax rate for the new regulations from 1 July 2021 particularly challenging for online trade.
The example of coffee highlights this problem quite well. In Germany, coffee is subject to a reduced tax rate like many other food products: 7 percent. A reduced tax rate also applies in France. But three different tax rates exist there: 2.1, 5.5 and 10 percent. In this case, the right answer lies in the middle: 5.5 percent.
But how can an online merchant with a range of 5,000 products and tax obligations in all EU countries from 1 July 2021 correctly determine the tax rates for all 5,000 products and all EU countries?
This will ultimately only be possible with automation – for instance, using a unique product characteristic like the customs tariff number. The customs tariff number can allow each product to be categorised worldwide, which also makes it possible to automatically determine the tax rates with the help of corresponding databases.
Now, that’s quite a lot of challenges that come with the legal changes from 1 July 2021. Let’s summarise them again below in a checklist.
Are you OSS-ready? Checklist for the OSS process
1. Check that you can determine tax rates automatically for the whole of the EU – ideally using the customs tariff number.
2. Register for the One Stop Shop.
3. If you take part in the Amazon Pan EU Programme – or similar programmes – you’ll need to identify your distance sales and then report them via the OSS. But all other transactions (B2B transactions, input VAT and local sales) still need to be reported via local registrations in other EU countries, as the following graphic shows.
4. For the third case, regularly make sure that you’re reporting your transactions – but not twice (OSS and local registrations)! With the extra complexity, this can happen quickly.
Especially the fourth point causes uncertainty.
Can you use the OSS process and local registrations at the same time?
One Stop Shop and / or local registrations?
The EU VAT Directive, which regulates the One Stop Shop, states that all sales must be reported via the One Stop Shop or local registrations.
So is this a matter of either-or?
That would mean that participants of Amazon’s Pan EU Programme – or other cross-border fulfilment structures which also require local registrations – would not be allowed to use the One Stop Shop.
Here we can put you at ease. The either-or principle only applies to distance selling.
In this respect, there is nothing to stop you from using
● returns via the One Stop Shop, and;
● local registrations
simultaneously, provided that all distance sales are reported via the One Stop Shop.
Important: Since distance sales are always reported via the One Stop Shop in the country of residence or registration, this includes transactions such as sales from an Amazon warehouse in Poland to a consumer in another EU country, e.g. the Netherlands.
Summary of the One Stop Shop: Additional requirements concerning the VAT obligations for most online sellers
The legal reform that comes into effect on 1 July 2021 is both extensive and complex for you as an online seller. We have therefore summarised the key takeaways for you below:
● The national distance-selling thresholds will be discontinued with the introduction of an EU-wide standard threshold of 10,000 euros net
● There will be a tax obligation in (almost) all EU states, even if only minor sales are made in individual countries
● Distance sales are centrally reported via the OSS scheme in the online seller’s country of registration (local registrations are no longer required)
● Local registrations are required when participating in the Amazon Pan-European FBA/CEE programme or with various fulfilment centres/warehouses
● It will be necessary to determine the applicable tax rates for the complete product range for the entire EU
● VAT reporting processes need to be designed and established to cover different types of transactions (distance selling via OSS, intra-Community movements/purchases via local registrations)
Taxdoo offers solutions
If you’d like to know more about how you can safely and efficiently cover your OSS obligations, VAT compliance, financial accounting and much more using a central platform, use this link to arrange your personal and free consultation with the e-commerce and VAT experts at Taxdoo!
Taxdoo is the platform for automated and secure VAT processes
...and covers ongoing EU-wide VAT compliance, Intrastat and financial accounting, as well as many more compliance services on an unparalleled platform – for Europe’s leading online sellers.
Of course, we will also be able to help you report your distance sales automatically from July 2021 and via the OSS interface – easier than ever before.
FAQ: We answer the most frequently asked questions about the One Stop Shop
In our OSS webinars and personal demos, a large number of questions about the One Stop Shop have arisen in recent weeks. We answer these questions here in the FAQ, and also continually add new questions that are relevant for online traders and tax advisors.
For better clarity, we have divided the FAQ into 5 topics:
FAQ Part 1: Basic questions about the One Stop Shop and OSS procedure
FAQ Part 2: Questions about the EUR 10,000 delivery threshold
FAQ Part 3: Questions about OSS registration
FAQ Part 4: Special questions on the application of the OSS procedure
FAQ Part 5: Questions about Taxdoo and the OSS
FAQ Part 1: Basic questions about the One Stop Shop and OSS procedure
Question: What is the One Stop Shop for Value Added Tax?
Answer: The One Stop Shop allows online traders to make the Value Added Tax declarations and the Value Added Tax payment for their distance sales collectively for all EU countries via a central online portal of the local tax authority.
Question: What are distance sales?
Answer: A distance sale refers to the dispatch or sale of goods from one EU state to another EU state to final consumers (B2C sales).
Question: Are sales to German customers also to be reported to the Federal Central Tax Office within the framework of the OSS procedure?
Answer: Deliveries by a German online trader (from a warehouse in Germany) to a German customer are not to be reported via the OSS procedure, but via the German advance VAT return in the standard procedure.
Question: What about shipments (e.g. Amazon)? Here, the registrations in the respective country remain necessary. Can the OSS procedure still be used for sales from DE to the EU?
Answer: If you need VAT IDs in other EU countries due to foreign warehouses, you can independently use the OSS to report distance sales. However, all distance sales must be reported via the OSS.
Question: After the introduction of the OSS, does a VAT ID have to be requested for each country?
Answer: For the taxation of intra-Community distance sales, it is not necessary to apply for a VAT ID in the destination country if the One-Stop-Shop is used. However, other circumstances, such as the use of foreign warehouses, may lead to an obligation to register abroad.
Question: In future, after the start of the OSS procedure, will I as an online trader have to be registered for VAT in other EU countries and submit tax returns locally if I store goods in other EU countries (e.g. within the framework of the Amazon FBA programmes "Pan-EU" or "CEE"/"Central Europe")?
Answer: If you as a trader store goods in other EU countries, VAT registration is still necessary in the countries where the warehouses are located (e.g. PL, CZ, ES, FR or IT). For the storage countries you cannot (!) benefit from the simplifications of the OSS, but continue to need a local tax representative who will take care of the local tax declarations for you.
Question: If I have already exceeded the local supply thresholds in the past and am registered for VAT in the respective countries, what happens when I use the OSS procedure?
Answer: Anyone who has already exceeded a delivery threshold and therefore has a tax registration in another EU country that is not a warehouse country, switches to OSS and can in principle terminate the tax registration / fiscal representation in the country.
Please note that there may be different rules regarding the deregistration in the individual countries. In some countries, it may still be necessary to submit an annual VAT return for the first half of 2021, so that deregistration can only take place at the end of 2021. If you are a Taxdoo customer, we can take care of these deregistrations for you, including a prior country-specific check as to whether the respective deregistration can take place for 2020 or 2021.
Question: What happens if the previous local delivery threshold in a country is not exceeded until June? Is registration then necessary for one month?
Answer: As soon as the "old" delivery threshold is exceeded, the delivery that led to the exceeding is already taxable in the receiving country. Since the OSS procedure can only be used from July onwards, VAT registration must still be carried out in the respective country for the month of June.
Question: Can I also use the OSS only from 01.01.2022 in order to process the whole year 2021 uniformly in the Value Added Tax ?
Answer: In principle, it is possible to use the One Stop Shop procedure only from 2022. However, this is not recommended, as exceeding the delivery threshold of EUR 10,000 as of 1 July 2021 will result in a tax liability in each receiving country, which must be handled by means of a local VAT registration without using the OSS procedure. The "old" regulations apply to turnover in the first half of 2021, i.e. use of the OSS procedure is excluded here.
Question: Is there a link to the EU database that contains an overview of EU-wide tax rates?
Answer: You can find the link to the EU database here: https://ec.europa.eu/taxation_customs/tedb/vatSearchForm.html.
Question: Where can I find the different VAT rates of the EU member states?
Answer: You can find the VAT rates of the different member states on the website of the European Commission. However, this can only serve to provide you with an overview of the tax rates in the area of Value Added Tax .
Question: How are the tax burdens for the different countries paid under the OSS procedure?
Answer: The tax burden is transferred collectively for all countries to a single point of contact (the "One Stop Shop"). Entrepreneurs who use the OSS in Germany transfer the Value Added Tax to the Federal Central Tax Office or to an account at the Federal Treasury.
Question: After the introduction of the One Stop Shop, do I not have to issue invoices or may I no longer issue invoices for distance sales after 1 July?
Answer: Invoices may still be issued, but in the case of cross-border distance sales declared under the OSS procedure, there is no longer an obligation to issue an invoice.
Question: Is the OSS tax payment paid in one sum for all countries or separately for each country?
Answer: The OSS tax payment is made as a total for all countries.
Question: Can local input tax from incoming invoices in other EU countries be claimed via the OSS procedure?
Answer: Local input taxes cannot be claimed via the OSS procedure. If there is an existing local registration, input taxes can be claimed via this, otherwise within the framework of the input tax refund procedure.
Question: What applies after the introduction of the OSS procedure for other services to private customers in other EU countries?
Answer: Digital services to private customers abroad in the EU can be reported via the One-Stop-Shop (formerly Mini-One-Stop-Shop) as of 1.7.
Question: We sell goods to B2B customers abroad as well as to B2C customers abroad. Can I now report the sales to our private customers abroad via OSS and report the sales to B2B customers as usual?
Answer: Yes, it is even mandatory to record B2B sales in the local advance return. B2B transactions cannot be processed via the OSS.
FAQ Part 2: Questions about the new €10,000 delivery threshold
Question: Does the new supply threshold of €10,000 apply to each EU country individually or cumulatively for the entire EU?
Answer: The €10,000 delivery threshold applies to the entire EU, i.e. to all cross-border distance sales within the EU.
Question: How will the €10,000 supply threshold be calculated - especially in 2021?
Answer: The answer consists of two parts.
First things first:
For all those who only send their goods from one EU state, the fact applies that the 10,000 euros are calculated on the entire calendar year. If you have already exceeded the limit in 2020 or in the first half of 2021, you will be liable to pay tax in every EU state to which you deliver even one parcel as of 1 July 2021. You can find the corresponding clarification from the German tax authorities here.
Section 3a.9a (1) sentence 1 number 1 sentence 2 Value Added Tax-Application Decree (UStAE): ... for the assessment of the place of supply in the taxable period 2021, the aforementioned other supplies and intra-Community distance sales carried out in the calendar year 2020 and in the first half of 2021 must also be included; a pro rata temporis allocation of the turnover threshold of 10,000 euros is not to be made in the calendar year 2021.
Note: The UStAE is not a law but binding for the tax authorities.
Question: If I operate on two tracks - i.e. via Amazon and direct distance sales - does the 10,000 euro delivery threshold still count in full or can I consider the "Amazon sales" separately?
Answer: The €10,000 delivery threshold applies uniformly to all distance sales regardless of the sales platform.
Question: Are deliveries to third countries also included in the delivery threshold of € 10,000?
Answer: Deliveries to third countries are not included in the delivery threshold (only so-called intra-Community distance sales).
Question: The €10,000 delivery threshold is exclusive of German sales, is that correct?
Answer: That is correct. For the assessment of the €10,000 limit, only cross-border distance sales within the EU are to be considered.
Question: If the uniform delivery threshold of 10,000 euros has not been exceeded, must German Value Added Tax be shown on the invoice? As soon as the uniform delivery threshold of 10,000 euros has been exceeded, does the local tax of the respective country have to be shown on the invoice?
Answer: If the delivery threshold of 10,000 euros has not been exceeded, the delivery/service is taxable in Germany and is thus subject to German Value Added Tax (19% or 7%). If the delivery threshold is exceeded, the sale is taxable in the receiving country, i.e. the delivery is also subject to the tax rate applicable there. In principle, however, the issuing of an invoice can be waived when participating in the OSS procedure. If you decide to issue an invoice, the invoicing rules of the Member State in which you are registered for the OSS procedure are applicable. Therefore, if you participate in the OSS procedure in Germany, you must comply with the German invoicing regulations, which stipulate, among other things, that the tax amount must be shown on the invoice, even if it is foreign tax.
Question: Does the EU-wide supply threshold of EUR 10,000 per year count anew or am I always liable to tax in the receiving country once the threshold has been exceeded?
Answer: When assessing the supply threshold, it is always relevant whether the supply threshold was exceeded in the previous calendar year or whether it will be exceeded in the current calendar year. As soon as one of these two cases applies, the supply threshold is deemed to have been exceeded.
FAQ Part 3: Questions about OSS registration
Question: When do I have to register for the OSS at the latest?
Answer: If the One-Stop-Shop is to be used from 01.07., registration must be carried out by 30.06.2021, as the registration start date is in principle the first day of the calendar quarter following the application.
Question: I was asked for a BZSt number when registering for the One Stop Shop at My BOP. What is it and where do I get it?
Answer: There are basically 2 ways to log in to the "My BOP" portal.
1. use the certificate file from "My Elster": According to the information provided by the BZSt, the certificate file from "My Elster" can also be used for registration via my BOP. To do this, the registration procedure must be followed as described in the following link, provided that an Elster certificate file does not yet exist: https://www.elster.de/eportal/registrierung-auswahl/hinweis2
2. use of the "BZSt number": The BZSt number can be applied for at the BZSt. The registration process is described under the following link: https://www.bzst.de/DE/Unternehmen/Value Added Tax/One-Stop-Shop_NichtEU/ElektronischeDatenuebermittlung/datenuebermittlung_node.html#js-toc-entry1. Under the link one can also find the application form for the BZSt number.
If you already have an Elster certificate file, you should be able to log in directly with the certificate file under the following link without applying for a BZSt number: https://www.elster.de/bportal/login/softpse. Once you have registered there, look for the registration notice for participation in the OSS EU scheme. Here you should be able to register for the OSS procedure without the BZSt number.
Attention: You may need a new Elster certificate for this, see next question.
Question: When I want to register with the OSS via the Elster portal and with my existing Elster certificate, I get the error message: "No access authorisation or session ended". It can't really be my Elster certificate, because I can use it to carry out the VAT pre-registration as usual without any problems. What's going on? How can I do the OSS registration now?
Answer: You do indeed need a new Elster certificate. The access authorisation for the new functions OSS registration and OSS notifications is then automatically stored in this certificate. Older Elster certificates, depending on their age, usually do not allow access to the OSS area.
This is how you get a new Elster certificate with OSS access:
If necessary, log out of Elster first. Go to the Elster homepage and create a new user account. The code for the activation will then be sent to you by post. With the new certificate, you have access to the OSS functions and can complete the registration.
Question: Which websites must be specified when registering for the OSS procedure? Also those of the individual sales platforms, such as Amazon, Kaufland etc.?
Answer: Yes, all sales platforms should be indicated, i.e. both own online shops and marketplaces.
Question: We have already registered for the OSS procedure, but we need to add more websites to our registration. Where can we find a function to add to the OSS registration?
Answer: Traders who have already registered for the OSS procedure can change their registration data, submit their tax returns and deregister from the procedure in the BZSt online portal (My BOP). However, the BZSt will not provide the option to make changes until 1 July at the earliest.
Question: If there is already a registration for the Mini-One-Stop-Shop, is there an automatic changeover to the OSS procedure?
Answer: Traders who are already registered for the predecessor Mini-One-Stop-Shop procedure automatically participate in the special One-Stop-Shop, EU scheme.
Question: When can registration take place in other countries for the OSS and where can a corresponding registration be made?
Answer: According to the European Commission, registration for the OSS procedure can take place in any Member State as of 01.04.2021. Registration always takes place in the respective country with the tax authority responsible for handling the OSS procedure. Registration for the OSS must always take place in the country of domicile of the online trader.
Question: In which formats are the reports "imported" into the BZSt online portal or are values entered manually into the BZSt online portal?
Answer: For the new regulations, it is planned that an import of data will be possible (probably a CSV file). Technical specifications on the part of the BZSt are not yet available. In the future, there will also be an Excel template that can be used by the taxpayer.
FAQ Part 4: Special questions about the OSS
Question: Can the local Value Added Tax e.g. in Spain be continued normally and the Value Added Tax other countries be paid via OSS or must all countries be paid via OSS after registration?
Answer: Intra-Community distance sales must all be declared uniformly via the One Stop Shop procedure regardless of existing local registrations. Value Added Tax for local sales in Spain must also be declared locally in Spain. The OSS procedure only applies to cross-border sales to final consumers (distance sales).
Question: Which VAT ID number belongs on the invoice if a sale to Austria was reported via the OSS?
Answer: The compulsory invoice details for these transactions result from the regulations of the country of origin - i.e. the German tax number/VAT-ID.
Question: An online trader has exceeded the delivery threshold to Austria and is registered there, which is why reports must be submitted there for at least the remaining and following calendar year. Does he/she consequently have to report all B2C distance sales from Germany in the OSS and report the Austrian sales until the end of his/her "mandatory reporting period" in Austria?
Answer: If he/she decides to participate in the OSS, it is mandatory that he/she reports all distance sales via the OSS. He/she then does not report anything via the local registration (except local sales in Austria, if there are any).
Question: We are already subject to VAT and registered in Austria. In Austria we have to file an annual return. What happens now with OSS? Can we report in OSS for the whole year or do we have to report in Austria for the first half of the year and switch to OSS for the second half?
Answer: Turnover from the 1st half of the year must be reported within the framework of the Austrian advance return and annual return. Turnover in the 2nd half of the year must be reported within the framework of the OSS procedure if a corresponding registration for the OSS procedure is made.
Question: What should I bear in mind for small entrepreneurs subject to VAT in connection with the One Stop Shop? And how do I implement the OSS procedure in this context in the case of actual taxation?
Answer: The new regulation quickly shifts the place of delivery abroad. A small entrepreneur does not have to show / pay tax for domestic sales, for foreign sales / distance sales the standard taxation applies, i.e. if the 10,000 EUR limit is exceeded, the Value Added Tax must be reported and paid in the country of receipt via the OSS procedure. The small business regulation always applies only in the country of domicile. The limit of 22,000/50,000 for the application of the small business regulation according to §19 UStG only applies to domestic turnover. This means that a small entrepreneur could have a domestic turnover of 20,000 euros and a long-distance turnover of 100,000 euros, but still remain a small entrepreneur in Germany. Sellers with actual taxation must account for their OSS turnover with debit taxation. This means that actual taxation is not applicable to OSS.
Question: How should differential taxation be viewed in connection with the OSS procedure?
Answer: The new legal regulations (§ 3c para. 5 UStG n. F.) refer to the fact that in the case of § 25a UStG (differential taxation) there is no relocation. These transactions are therefore always taxable in the country of origin.
Question: Can I also tax excisable goods such as beer via OSS?
Answer: Yes, the delivery of excisable goods can also be reported via the OSS. However, excise duty must be declared and paid separately in the country of destination.
Question: Is it also a distance sale if the supplier has parcels for private customers resident in a buyer country transported, e.g. in a container, to the buyer country and hands them over to a postal service provider resident there for further dispatch?
Answer: Yes, in these cases there is also a distance sale.
Question: Will Amazon also apply the destination principle after the introduction of the OSS procedure if the VAT ID is invalid? Until now, Amazon has been taxed in the country of origin if the entrepreneurship could be proven otherwise.
Answer: It is not expected that Amazon will adapt the logic of the Amazon VAT Calculation Services (VCS). We recommend contacting Amazon directly in this regard.
Question: As a tax advisor, do I also have to register for the One-Stop-Shop?
Answer: In principle, the client registers himself, not the tax advisor.
Question: What about the delivery threshold of EUR 10,000 for a fiscal unity for VAT purposes in Germany? Does this apply to each company in the tax group or to the entire tax group?
Answer: The supply threshold of EUR 10,000 applies to the entire tax group, as only the tax group parent is an entrepreneur within the meaning of the German VAT Act and only the tax group parent can register for the OSS procedure.
Question: In the context of the central reports abroad, is the data of the respective company passed on or quasi all companies in one sum?
Answer: It can be assumed that the data per taxpayer will be passed on to the foreign tax authorities.
Question: Article/article group-dependent different tax rates in the individual countries - Are there central lists to maintain the own products according to the countries also automatically on the basis of the product groups or the taric (per country - the apple e.g. standard, reduced or heavily reduced)? So no individual queries?
Answer: In principle, there is a database of the European Commission, but no automated mass data query is possible via this database either. You can determine your tax rates automatically via Taxdoo using the customs tariff number.
Question: Third country sales, how will these be reported in the future? Will anything change here after the introduction of the One Stop Shop?
Answer: Sales to private customers within the EU where the movement of goods begins in a third country are also affected by the new regulations. Here, too, the sale is taxable in the country of destination. If the material value of the consignment in relation to the basket of goods does not exceed EUR 150, a declaration can be made within the framework of the so-called import one-stop shop.
Sales to private customers located in third countries are not affected by the changes.
Question: If we send distance sales to countries that do not have the EUR as their currency, in which currency must the VAT.transfer be made?
Answer: The transfer to the BZSt must be made in EUR. The conversion rate is determined by the current ECB exchange rate on the last working day of the respective OSS reporting period.
Question: How do consignment stores work in combination with the OSS procedure?
Answer: Consignment warehouses are subject to other VAT regulations that are to be considered independently of the One-Stop-Shop.
Question: We are registered for VAT purposes in Austria due to a consignment warehouse. This will continue to exist from 1 July 2021 and we have also registered in the OSS procedure independently of this. Is that correct?
Answer: Regulations on consignment warehouses and the corresponding reporting obligations remain unaffected by the new regulations as of 01.07.2021. The described procedure is therefore correct.
FAQ Part 5: Questions about Taxdoo and the OSS
Question: We work together with Taxdoo. Should we still register for the OSS ourselves? We are a classic Amazon PAN-EU trader and registered in 6 EU countries.
Answer: Yes, the registration / login for the OSS is always done by the trader. You can find out how this works in our support article: Registration for the OSS.
Question: Can Taxdoo automatically identify and evaluate remote sales if there is a connection to Amazon and the invoice programme?
Answer: The automated evaluation of (remote) sales is the core service of Taxdoo. In particular, as of July, Taxdoo can distinguish between different transaction categories, which sales are to be taken into account in the OSS declaration and which transactions still have to be reported in the local pre-declaration.
Question: Does Taxdoo also have an interface to a corresponding database for EU-wide tax rate calculation and what does this look like?
Answer: Yes, this interface exists. See our support article Determining reduced tax rates: https://support.taxdoo.com/hc/de/articles/360016420159-Ermittlung-reduzierter-Steuers%C3%A4tze.
Question: We already use Taxdoo. Where can we then enter the customs tariff numbers to determine the respective tax rates for the respective EU country? Do we then have to maintain each SKU in Taxdoo?
Answer: See our support article Determining reduced tax rates: https://support.taxdoo.com/hc/de/articles/360016420159-Ermittlung-reduzierter-Steuers%C3%A4tze.
Question: You do the declaration for us in Austria, but in the future this will no longer be necessary as there is no storage in Austria. Do we have to cancel the package or will it expire automatically?
Answer: We have received feedback from the tax office in Austria that the registrations and declarations must remain in place until the end of the year, as an annual declaration for 2021 must still be submitted. There will then be no more costs in connection with the registration in AT from 01.07. The OSS package must be booked separately from 01.07 so that we can generate your OSS declaration for you.
Question: What additional information does the client have to enter in his Amazon account for each turnover? Do you have a checklist of what information the client has to enter for the turnover so that the analysis runs correctly, e.g. via Taxdoo?
Answer: From Taxdoo's point of view, we obtain all relevant information via the Amazon interface. Previous settings at Amazon are generally not necessary, as Taxdoo itself carries out a VAT assessment of the data. We only need the information whether the OSS is to be used from 1.7 (or later).
Question: How will it work in practice for us as traders in the future when all transactions are on the Taxdoo platform? You continue to report locally. Who reports OSS? Taxdoo? Me or my tax advisor? Will the German VAT also be reported via OSS?
Answer: We will identify all distance sales based on the data submitted to us and generate an OSS file. This file can be transmitted to the BZSt either by you or your tax advisor. Intra-state sales and cross-border movements of goods under programmes such as Amazon Pan EU or Amazon CEE will continue to be reported via the local tax offices.
Question: Is it possible to import the mappings from SKU / tariff number to tax rates into Plentymarkets?
Answer: We are currently unable to edit or revise data in your ERP or shop systems. You can access the data we have assessed - and thus also tax rates - either in the dashboard or via our API (tax rates via: https://dev.taxdoo.com/#get-tax-rates ). Based on this data, you can adjust the tax rates in your upstream systems.
Question: When should I register with you (Taxdoo) at the latest, so that you can pull and process the data from 01.07 in time?
Answer: You should register with us by 1.7. at the latest.
Question: I am currently registering via Taxdoo for PL and CZ. If I only want to deliver to PL, CZ and DE, can I save the OSS?
Answer: The OSS is voluntary, which means there is no obligation to register. However, if you do not want to use it, you must register for tax purposes after exceeding the delivery threshold of € 10,000 in each individual country from € 1. The OSS also makes sense for Amazon FBA users, as your shipments from your warehouses in PL, CZ, DE to other EU countries can also be reported via the OSS.
Question: We are already registered in 10 EU countries and ship to many more via Amazon and Ebay. The €10,000 limit has long been exceeded. Can the data that Taxdoo reads out monthly now be used to determine in which countries we need to register further or whether this can be done via the OSS?
Answer: As soon as the delivery threshold of EUR 10,000 has been exceeded, there is a tax liability in each country of destination as of 1.7. Taxdoo can display the tax obligations for each state. In this case - deliveries to numerous EU states - it can make a lot of sense to register for the OSS from 01.07.21.
Note: The FAQ will be extended continuously in the coming weeks.