The One-Stop-Shop procedure introduced in July 2021 is intended to standardize VAT regulations across the EU and simplify the payment of VAT for online sellers who ship goods across borders. In this article, you can learn which VAT rates to use in the OSS and where the VAT is paid.
Antonia Klatt
Last Updated on 10 February 2022
OSS and VAT: these tax rates are applicable
Online sellers who do not use the One-Stop-Shop usually automatically use the delivery threshold. The domestic VAT rates apply until the delivery threshold is reached; after the delivery threshold has been exceeded, the respective foreign tax rates apply.
However, relatively high country-specific delivery thresholds were abolished in July 2021 with the introduction of the OSS and replaced by a lower threshold of €10,000 applicable throughout the EU. Since this threshold is quickly reached, many traders register for VAT abroad from the outset. In this case, the respective foreign VAT rates apply from the first sale onward.
However, as registration for VAT involves many obligations, signing-up for the VAT One-Stop-Shop can be advantageous instead. In this case, too, the respective foreign VAT rates are applicable from the first transaction onward. You can find more One-Stop-Shop examples in our blog. However, the place where the VAT is paid is different in the OSS.
This is where you have to pay VAT in the One-Stop-Shop
The most complicated thing is the payment of VAT without OSS in the case of using the delivery threshold. In this case, the VAT of all transactions below the threshold that were subject to domestic VAT rates must be paid to the domestic tax office. The tax liability from transactions that are above the threshold must be paid to the respective foreign tax offices.
Therefore, the initial registration for VAT abroad is easier. Then, without exception, the tax liability is paid to the tax authorities in those countries whose VAT rates were used and where the customers are based.
Payments of VAT can be simplified by using the One-Stop-Shop. That’s because sellers who use the OSS can pay the VAT liability collectively to the local tax office after an OSS return – regardless of which VAT rates were used. Therein lies the advantage of the One-Stop-Shop for VAT.
The only exceptions here are in the case of storage abroad. As soon as goods are stored abroad and then sent to buyers in the same country, the VAT must be paid to the respective local tax office despite OSS. The OSS only affects VAT on cross-border deliveries.
In this case, of course, VAT registrations and advance returns abroad are necessary again so that the VAT can be paid despite the OSS. However, if goods are only shipped from the home country, the One-Stop-Shop replaces the VAT returns abroad.
Does the One-Stop-Shop for VAT sound interesting for your business? Then get in touch with us! The hellotax team can discuss all questions with you and help you with the One-Stop-Shop registration, the submission of the OSS report, the VAT rate identification and the payment of the VAT in the One-Stop-Shop.
Hellotax One-Stop-Shop Solution
- Automated identification of B2C sales
- Automated determination of your tax rates
- Handling of OSS registrations and reports
- Quality control for your transactions
