Are you involved in cross-border sales of goods to consumers in the U.S., U.K. or EU? It doesn’t matter where you are established, changes to e-commerce and value-added tax (VAT) are widespread and complicated.
Watch our on demand webinar to ensure you are up-to-speed on the consequences for your business. The webinar features specialists in the fields of VAT and e-commerce, who can help you understand the rules for selling goods to consumers in each country, including:
As of July 1, 2021 the exemption for low consignment goods will no longer apply. Therefore, in principle, import VAT will be due for every import of goods from non-EU territories into the EU.
It is not possible to reclaim input VAT through the OSS-system. The OSS can only be used to report EU-distance sales. The input VAT should be recovered via filing a local VAT return or a refund procedure.
As of July 1, 2021, all current thresholds for distance sales in the EU will be abolished. Therefore, supplies to other EU-countries will always be subject to VAT in the EU country of arrival. There is one exception. Companies that are established or companies with a VAT fixed establishment in the EU are subject to VAT in the EU country of establishment if their total value of B2C EU supplies and B2C electronic services do not exceed EUR 10,000 in a calendar year and did not do so in the course of the preceding calendar year.
OSS filings will be a quarterly return. The deadline for the submission and payment of the due VAT will be the last day of the month following the quarterly declaration.
As of July 1, 2021, the B2C-supplies sent from one EU country to another EU country will always be subject to VAT in the EU country of arrival. Therefore, you have to apply the VAT rate that is applicable in the country of arrival of the goods. It is your responsibility to ensure that the correct VAT rates are being applied. When using the OSS, you report your turnover relating to distance sales of goods in the OSS-return in the country of identification. The country of identification will subsequently arrange the payment of the VAT with the authorities of the member states of destination of the supplies.
If you fail to timely pay the VAT amount due, the Member State of identification shall send a reminder on the tenth day following the day on which the payment was due. Subsequently, you will have a penalty risk in all the Member States in which you have distance sales during that period.
Once you failed to comply with the OSS compliance rules for three consecutive quarters, there is a risk that you will be excluded from the OSS scheme for a certain period and the normal rules will be applicable again. Meaning, you will have to register locally in the Member States to which you have distance sales and comply with the local regulations.
You need to make sure that you are ready by July 1, 2021. If you are not set up properly, this could lead to multiple costly VAT compliance issues but also for example delays towards your customers.
This depends on every type of situation. We are pleased to discuss this with you in more detail.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.