On the 1st of July 2021, new VAT ecommerce rules will come into force, and you or your accountant may need to register your business for the new VAT OSS (One Stop Shop) scheme or VAT IOSS (Import One Stop Shop).
These new schemes only apply to businesses that are selling or plan to sell B2C goods or services cross-border. So, if you’re only selling B2B, these changes won’t affect you directly.
In this guide, we’ll talk you through what you need to know about these new schemes, how to decide if you need to register and what to do if you need help.
If you have any questions about your specific situation, feel free to contact our Client Services Team for more support.
What is the VAT One Stop Shop (OSS)?
The OSS is an extension of the current Mini One Stop Shop (MOSS) scheme and it simplifies the VAT obligations for businesses selling goods and services to final consumers (B2C) in the EU.
Registration will enable suppliers to declare cross-border B2C supplies of services and intra-Community distance sales of goods in the EU. This means that businesses will only register for a VAT number in one country rather than in all the countries where the sales are made, making VAT declarations easier and quicker.
This also means that distance selling thresholds will no longer apply from 1 July 2021. (Distance sales occur when goods are dispatched to a private consumer in another EU Member State, and the supplier is responsible for the delivery of the goods).
VAT OSS will apply if:
You are currently registered for VAT Mini One Stop Shop (MOSS).
If you’re currently using the VAT MOSS Scheme, your registration will continue under the VAT OSS Scheme but you may need to update your information if you make other supplies covered by VAT OSS. Speak to your accountant if you need your information updated.
You carry out EU cross-border supply of services and/or goods on a Business to Consumer (B2C) basis to a Member State where your business is not established.
This is called Union Scheme registration and it means that you won't need to register for VAT in each country that sales are made.
You have no business establishment or fixed establishment in the EU and you carry out B2C supplies in the EU.
Suppliers eligible to register for this scheme, i.e. those that are not established in the EU, will be able choose to register in any Member State. Get in touch with our team if you need further guidance on the Non-Union Scheme registration.
Services that apply to VAT OSS
VAT OSS applies to digital services and other exceptional services that don’t follow the general place of supply rules. In general, the place of supply rules for B2C supply of services is where the supplier is based.
Revenue has a list of services that are exceptions to that rule and these services can be included in the VAT OSS scheme. For instance, the transportation of passengers, services connected with immovable property, and the hosting of events are considered exceptions and can apply to the VAT OSS scheme.
If you need help determining if your business should register for VAT OSS / IOSS, talk to our Client Services Team now – we’re here to help.
VAT OSS Registration
There is Union scheme registration for suppliers established in Ireland or holding goods in Ireland and non-Union scheme registration for non-EU established suppliers of B2C services.
Both registrations are carried out on Revenue’s Online System (ROS) but different information may be required. For example, for non-Union scheme registration, you must confirm that you are not registered for the non-Union scheme in any other Member State and confirm that you have no establishment in the EU. During the Union scheme registration, your application will be prepopulated because Revenue already has your basic details but certain elements will need to be edited for the purposes of OSS registration.
Get in touch if you need help with VAT OSS registration and we’re happy to assist you.
VAT OSS Returns
When your business is registered, VAT OSS returns are due on a quarterly basis, and it is separate from a domestic VAT declaration.
If you would like a quotation for us to take care of this for you, let us know about your business and we’re happy to send you a proposal for this service.
What is the VAT Import One Stop Shop (IOSS)?
- The Import One Stop Shop (IOSS) is the electronic portal that allows businesses to report on distance sales of goods imported from outside the EU, and it ensures compliance with VAT ecommerce obligations.
- Under this new scheme, VAT will be due on all goods imported into the EU with an intrinsic value not exceeding €150, i.e. the value of the goods alone, not including insurance, customs, etc. This means that the low-value consignment VAT relief threshold for goods under €22 is abolished.
- If you register for this scheme, VAT can be charged at the point of sale to the customer and you can declare and pay this VAT via a monthly IOSS return.
- The import is then treated as exempt from VAT if you quote a VAT IOSS number on the customs declarations. The tax authorities will compare the exempt imports linked to your VAT IOSS number with the IOSS returns that are submitted.
- VAT IOSS doesn’t apply to excisable products, such as alcohol or tobacco, and also note that it is not mandatory to register for this scheme.
VAT IOSS will apply if:
You sell goods B2C with a value not exceeding €150.
VAT will be due on all goods imported into the EU with an intrinsic value not exceeding €150, i.e. the value of the goods alone, not including insurance, customs, etc.
The goods are imported from outside the EU.
This scheme moves the taxing point to the point of sale not the point of importation so VAT will be charged at the point of sale to the customer, and you declare and pay this VAT via a monthly IOSS return.
VAT IOSS Registration
Similar to the VAT OSS Scheme, registration for VAT IOSS is done through Revenue’s Online System (ROS).
Non-EU established suppliers (except for Norway) register for IOSS through the appointment of an intermediary. An intermediary is responsible for the payment of the VAT and the VAT IOSS registration will be carried out in the Member State where the intermediary has established its business. Note that Accountant Online can not act as an intermediary but we can help EU-established companies to register and file IOSS returns.
VAT IOSS returns
VAT IOSS returns and payments are due by end of the month following the reporting month and they are separate from domestic VAT declarations. If you need help registering for VAT IOSS or support filing and paying returns, get in touch for a quotation – we’re here to help.
Consequences of non-compliance
- If you fail to comply with the rules of VAT OSS and/or IOSS, you can be excluded from using these schemes. This will have significant consequences to your business as it could lead to 26 VAT registrations.
- Failure to file or pay for 3 consecutive VAT periods or failure to provide records can also lead to exclusion in the schemes for a period of 2 years. Note that all records relating to this scheme should be kept for at least 10 years so consider using online accounting software to manage your documents efficiently.
Remember that registration for the VAT OSS and VAT IOSS scheme is not mandatory so if you elect to register, make sure that you have the correct systems and support in place to take of the statutory requirements. Talk to our Client Services Team if you need any support.