OSS and IOSS are currently on everyone’s lips. The new regulations concern VAT registration as well as import sales tax for online sellers. In this context, you may have come across the abbreviation MOSS. But what is MOSS and is MOSS relevant for online sellers now? These are the questions we want to answer in this article.
Antonia Klatt
Last Updated on 27 October 2021
Mini One Stop Shop guide
The abbreviation MOSS stands for Mini One Stop Shop. The relationship to OSS, the One Stop Shop, and IOSS, the Import One Stop Shop, is not only in the name. Both OSS and IOSS pursue the same concept as MOSS: they aim to simplify VAT registration and its collection.
The predecessor of the One Stop Shop
MOSS can be considered the predecessor of the One Stop Shop, which has been in force since July 1, 2021. In 2015, MOSS was introduced EU-wide to simplify the VAT levy for companies selling their services abroad in the EU. This happened on a small scale at first.
Only companies offering B2C services in the field of telecommunications and broadcasting as well as electronic services were able to benefit from the simplified VAT registration and levy from 2015. Instead of having to register for VAT levy in each country of the EU where the customers are located, MOSS allows to register in only one country and to centrally manage the VAT through this registration.
From MOSS to OSS
MOSS was introduced as a voluntary option, leaving companies free to choose whether or not the new levy scheme would benefit them. However, in the six years since its introduction in 2015, more and more companies have participated in the MOSS procedure each year. Not least because of this success, the EU and its member states decided to extend the concept of MOSS to other areas.
OSS: The extension of MOSS
As of July 1, 2021, additional businesses will also have the opportunity to participate in the simplified VAT registration. The Mini One Stop Shop will be expanded to the One Stop Shop and will now include additional transactions in the cross-border B2C area. All online sellers who sell their goods to private customers within the EU, if they do not store them in the destination country, can participate in the One Stop Shop.
What does this mean in concrete terms? Online sellers who exceed the delivery threshold for cross-border sales become liable for VAT in other EU countries. Previously, they had to register for VAT in each country in which the threshold was exceeded, regardless of whether they stored goods there or not.
This changes thanks to OSS
With OSS it is now possible to register for VAT only in those countries where goods are stored. VAT for all other countries where customers are located but no goods are stored can be handled through central registration and payment. Just as with MOSS, participation is not mandatory, but can ease the administrative burden in many cases.
New delivery thresholds and IOSS – The further changes
As part of the VAT reform, the supply thresholds that determine whether or not VAT must be paid in an EU member state will also change. Before July 1, 2021, the supply thresholds were set individually for each EU country. VAT only had to be paid if they were exceeded.
From now on, a uniform delivery threshold of 10,000 euros will apply throughout the EU. This means that as soon as the sum of all sales to other EU countries reaches 10,000 euros, online retailers must register for VAT in every EU member state if they do not want to use the One Stop Shop.
The Import One Stop Shop (IOSS)
The IOSS is not a direct successor to the MOSS, but transfers the principle of simplifying VAT for online sellers to imported goods. For goods imported from outside the EU with a value of up to €150, no customs duty is levied, but import VAT is. With the help of the IOSS, you as an online seller have the possibility to pay the import VAT at the time of import.
For this purpose, you can register for the IOSS in any EU country and collect all duties there. If a seller does not participate in the IOSS, the import VAT together with a handling fee will be collected by the shipping service provider from the customer at the time of delivery. Just like the OSS, the IOSS only applies to B2C sales to customers within the EU.
No VAT exemption for imported goods under 22€
The Import One Stop Shop is also accompanied by a generally applicable change. As of July 1, 2021, the exemption for goods with a value of less than €22 no longer applies. Until now, these were exempt from import VAT when imported from a non-EU country. Now, import VAT is already due from a goods value of €0.01.
Both the new delivery thresholds and the elimination of the VAT exemption for imported goods must therefore be considered when deciding whether or not to participate in OSS and IOSS.
Mini One Stop Shop registration, IOSS and OSS
For online sellers using eCommerce platforms such as Amazon or eBay, the platform takes some of the work away. The platform itself can register for the IOSS process and provide sellers with an IOSS number that they can use on their documents. Unfortunately, this is not possible for OSS. For Amazon merchants, it is also important to know that FBA services already count as storage in a country if Amazon stores goods there on their behalf.
Thanks to the new delivery thresholds, it is also likely that VAT will have to be paid in more EU countries than before. To keep track, with or without OSS, there is the possibility to automate your VAT with tools like hellotax. Our tool keeps track of delivery thresholds for you and makes digital VAT registration easier than ever. It also supports conversion to OSS and IOSS.
MOSS is now gone: Summary
Even though MOSS itself is not very relevant for online sellers in the B2C sector, the procedure provided the basis for the EU’s far-reaching VAT reforms in 2021. Online sellers can benefit from the positive experience with MOSS and follow best practices to successfully make the switch to OSS and IOSS. Even though these procedures are voluntary, the new delivery thresholds and the end of the VAT exemption for imported goods will change the competitive landscape and thus the initial situation of numerous online sellers.
