OSS explained - How to meet the new regulations
Say goodbye to local thresholds.
No more complications, all distance selling thresholds have been removed. Only one threshold stays in place of €10.000, which considers all sales within the EU, excluding the seller’s country of establishment.
What changed on 1st July?
Formerly, EU businesses that are selling goods within the EU above a certain threshold (EUR 35 000 or 100 000, depending on the Member State) to buyers located in another EU Member State had to register and pay VAT in the buyers’ Member State.
Since 1 July 2021, this rule is abolished and replaced with a new EU-wide threshold of EUR 10 000. Below this new threshold, you can continue to apply the domestic rules for VAT (including the SME exemption scheme) on your cross-border sales. If your sales are above this threshold, you are liable for VAT in the Member State where your buyers are located. Above this threshold, businesses can easily register in a new OSS – where they can easily declare and pay the VAT.
The One Stop Shop.
By extending the use of the OSS to all distance sales of goods within the EU, the administration got simpler. You only need to exchange information with only one Tax Authority in only one language.
What is the Union OSS?
The Union One-Stop Shop (OSS) is the electronic portal businesses can use to comply with their VAT obligations on e-commerce sales within the EU to consumers since 1 July 2021.
What is the Union OSS for?
The Union OSS is an electronic portal that simplifies up to 95% of VAT obligations for online sellers and electronic interfaces throughout the EU, as it allows them to:
- Register for VAT electronically in a single Member State for all intra-EU distance sales of goods and for business-to-consumer supplies of services;
- Declare and pay the VAT due on all supplies of goods and services in a single electronic quarterly return;
- Work with the tax administration of their own Member State and in their own language, even if their sales are cross-border.
Complying with OSS? Check.
Setting up the OSS option is super easy. After clicking on 'Registered for OSS', all the standard EU VAT rates will be loaded. You can modify these rates if you need to set special & reduced VAT rates.