Changes to VAT on e-Commerce
New One Stop Shop (OSS) & Import One Stop Shop (IOSS) schemes
With effect from 1 July 2021, the new One Stop Shop (OSS) and the new Import One Stop Shop (IOSS) will replace the traditional distance selling rules which are currently in place across the EU.
From 1 April 2021, eligible businesses may opt to register for these schemes, in advance of the go-live date of 1 July.
The new OSS is effectively an extension of the Mini One Stop Shop (MOSS) currently in place across the EU in respect of supplies of telecommunications, broadcasting and electronic (TBE) services to private customers, in an EU Member State which the supplier is not registered for VAT.
While MOSS applied across TBE services, the OSS extends this and will apply to the following supplies:
- the cross-border supply of services on a B2C basis to a Member State where the supplier is not established.
- intra-Community distance sales of goods (new EU wide threshold of €10,000);
- certain domestic supplies of goods.
An OSS registration should be available electronically in one EU Member State (usually the Member State of establishment) and should enable the supplier to declare its B2C supplies as noted above.
This should result in a single VAT reporting and payment obligation across multiple EU Member States for the above supplies. The supplier remits the VAT payable to the tax authorities in the jurisdiction the OSS registration is held, via a quarterly return, and this is in turn disbursed as appropriate to the appropriate Tax Authorities across the EU. As a result of the OSS, multiple EU VAT registrations should not be required to be held.
Union And Non-Union Scheme
Both a Union and Non-Union Scheme are available depending on the circumstance as applicable to each taxpayer.
- Union Scheme
The scope of the Union scheme will be extended to cover cross-border B2C supplies of services to consumers in the EU, where the supplier is established in the EU, and intra-Community distance sales of goods in the EU.
Non-EU established suppliers may also register for the Union Scheme; however, this registration should be limited only to the taxpayer’s intra-Community distance sales of
goods. This may result in non-EU established taxpayers also being required to register for the OSS under Non-Union Scheme as noted below.
- Non-Union Scheme
This is available to businesses who do not have a business/fixed establishment in the EU. Such suppliers should be entitled to register for the OSS in any EU Member State.
The Non-Union Scheme will enable the reporting of B2C supplies of services to the EU.
Registration
The Member State in which a registration can be availed of is dependent on a number of factors including the status of any EU establishment and the type of supplies being carried out.
- Non-Union Scheme Registration:
Various background information in respect of the taxpayer should be provided to Revenue including the following;
- company name
- trading name
- address
- website URLs
- contacts
- national tax reference number
- bank details
In addition, the taxpayer will need to confirm they do not hold a Non-Union Scheme registration in another EU Member State.
Once you have provided this information, you will have to create a verification code. This code will be needed later to retrieve your VAT OSS Tax Registration Number and your digital certificate. Your digital certificate will be used to access Revenue’s online system, ROS.
- Union Scheme Registration:
Irish established taxpayers can register for OSS with the Irish tax authorities. A pre-populated registration should be generated (as Revenue should have the required information in respect of the taxpayer). The registration should also include details of any other establishments held in the EU.
Once registered, the VAT OSS Registration Number should be the same as the Irish VAT number.
Existing MOSS Registration
Where an existing MOSS registration is held, this will continue under the OSS. However, the registration will need to be updated in the event that the taxpayer is making supplies outside of TBE supplies (currently covered under MOSS) and its supplies extend to those noted above under the OSS.
Import One Stop Shop (IOSS)
A separate IOSS scheme is due to be introduced from 1 July 2021 which applies to the distance selling of goods imported into the EU from a third country (a non-EU country). With effect from 1 July 2021, the current low value consignment VAT relief threshold of €22 will be abolished. Accordingly, import VAT should be applied to the importation of all goods into the EU.
The purpose of the IOSS is to facilitate the declaration and payment of import VAT on such goods whereby, the supplier can charge VAT at the point of sale and report and remit this VAT via a monthly IOSS return. Where the IOSS is used, the value of the goods should be treated as being VAT inclusive at the time of payment and the importation of the goods treated as being VAT exempt.
The IOSS can only be availed of in respect of the dispatch of goods (excluding excisable goods) by or on behalf of the supplier from outside the EU. Both EU and non-EU established supplies can avail of the IOSS. In addition, at the time of the supply, the intrinsic value of the consignment does not exceed €150.
IOSS Registration
As with the OSS, registration for the IOSS is dependent on the establishment of the supplier/applicant.
An EU established supplier, they should register in the EU Member State in which they are established.
If a non-EU established supplier, they should be able to register in an EU Member State of choice provided they hold an establishment in a country that the EU holds a VAT mutual assistance agreement with, and the goods as supplied from that country to the EU.
In all other cases, the non-EU established supplier must register for the IOSS indirectly through an intermediary. The non-established EU supplier should be registered through the appointed intermediary in the EU Member State in which the intermediary is established.
After registration in the IOSS, a supplier will be issued an IOSS identification number.