What is the One Stop Shop (OSS) system?
With the help of online sales, a product can reach a consumer in another EU member state easier than if it was purchased in a store. Special VAT rules apply if products or certain services are sold to consumers in other member states through a webshop. If the aggregate annual volume of such webshop sales exceeds 10,000 Euros, from 1 July 2021, the VAT of the member state of the consumer will have to be charged according to the main rule. In order to pay the VAT of the target country, by default, the seller would have to register in all member states to which they sell products. This is simplified by the One Stop Shop (OSS) system, which, however, cannot be applied in all cases.
OSS was created so that businesses can settle their VAT liabilities towards individual member states being registered at only one member state (where their seat or, in the absence of a seat, where their permanent establishment or usual place of stay is located) and the tax authority of this member state sending the arising VAT and return data sent to the tax authorities of the other member states.
When can you use the OSS system?
Any enterprise established in the territory of the Community may register in the One Stop Shop system, which:
- sells goods or supplies services to consumers in the Community,
- performs distance selling of imported goods.
- In addition, enterprises established outside the territory of the Community, which supply services to consumers in a member state of the Community.
Enterprises may register in the OSS system depending on their place of establishment and activity. In this regard, we differentiate between:
- and import (IOSS) schemes.
The EU scheme applies to all intra-Community supplies to consumers and to all services that are provided to a consumer in another member state of the Community.
The EU scheme may also be applied by enterprises that do not have an establishment in the Community and are engaged in distance selling to Community consumers. In this case, the enterprise must use a financial representative.
The non-EU scheme may be applied by enterprises without an establishment in the Community that provides services to Community consumers. The enterprises applying the non-EU scheme do not have to appoint a financial representative.
When can you use the IOSS system?
The import scheme (IOSS) can be used for the simplification of VAT payment in the case of webshops selling goods to private persons in the EU if the value of the product imported from a third country does not reach 150 Euros without taxes (with the exception of excise products).
Who can use the IOSS system?
Enterprises having their seat or a permanent establishment in the EU and intermediaries established in the Community, which declare and pay import VAT in the name and on behalf of the seller may register in IOSS. Enterprises that do not have an establishment in the EU may only register in IOSS through their agent.
If an enterprise does not have an establishment in the Community, it may only register for the import scheme directly if it is established in a non-EU country with which the EU has concluded an agreement (which means only Norway at the moment).
Where can I register in OSS and IOSS?
Companies can registered in the OSS and IOSS systems online at the HU TA website.
From when can you register in OSS and IOSS?
Registration in the One Stop Shop is open since 1 April 2021 but the system only starts on 1 July 2021 and businesses can only declare the transactions concluded after 30 July 2021 in this system.