one stop shopOne stop shop (OSS)  is an electronic service intended for taxable persons (in particular online traders and traders who manage the electronic interfaces). Through it, they can fulfill their VAT obligations, related to supplies of goods and/or services within the European Union to end customers/consumers.

Within the framework of the one stop shop, two modes are included – “in the Union” (Union OSS) and “outside the Union” (Non-Union OSS).

One stop shop regime in the Union

The Union regime is an electronic portal that simplifies up to 95% of VAT obligations. It`s for online sellers and electronic interfaces across the EU. It allows merchants to:

  1. To register for VAT electronically in one Member State. The registration is for all sales of goods within the EU and for supplies of services from business to consumer (B2C);
  2. Declaration and payment of VAT for all supplies of goods and services in one electronic quarterly declaration;
  3. To work with the tax administration in their own member state and in their own language.

Which merchants can use the one stop shop “in the Union” and for which deliveries?

  • taxable persons who are traders and have established their business in the EU or have a permanent establishment in its territory. They can use it for the supply of services to end customers and/or intra-community distance sales of goods;
  • Taxable persons who are not established in the EU. They can use it only for intra-community distance sales of goods;
  • Taxable persons operating an electronic interface (established in the EU or outside the EU) facilitating distance sales of goods. They can use it for intra-Community distance sales of goods and certain domestic distance sales of goods.

For online merchants:

The old rule was that, EU businesses that sell goods within the EU above a certain threshold depending on the Member State to buyers located in another EU Member State must register and to pay VAT in the buyers’ Member State. As of 1 July 2021. This rule was replaced by a new EU-wide threshold of EUR 10,000. Below this new threshold, you can continue to apply the domestic VAT rules to your border sales area. If your sales are above this threshold, you are liable for VAT in the Member State where your buyers are located. Above this threshold, companies will be able to easily register in the new One stop shop. There they can easily declare and pay VAT.

For merchants with an electronic interface:

Again, from 1 July 2021, in cases where a trader operates an electronic interface (marketplace, platform, etc.) that facilitates distance sales of goods by a non-EU seller established by an EU buyer, the electronic interface is considered a seller and carries VAT liability. To declare and pay this VAT, the electronic interface will be able to easily register with the One stop shop (OSS).

Which supplies of goods are included in the one stop shop regime “in the Union”?

For online merchants:

  • Supplies of B2C (business to customer) services from suppliers established in the EU, which are carried out in a Member State where he is not established;
  • Distance sales of goods within the EU by suppliers established and not established in the EU.

For merchants with an electronic interface:

  • Distance sales of goods in the EU through electronic interfaces facilitating sales;
  • Certain internal deliveries of goods through electronic interfaces facilitating sales.

Note the following! A trader operating an electronic interface is subject to VAT when he facilitates the following supplies of goods made by an actual seller not established in the EU to buyers in the EU:

  • Intra-European distance sales of goods;
  • Internal deliveries of goods.
  • An electronic interface is said to facilitate a sale of goods when it enables a buyer and a seller to come into contact through that electronic interface. Where the end result being the sale of goods to that buyer.

How does One stop shop work?

Businesses should apply the VAT rate of the Member State to which the goods are sent or where the services are supplied. Information on EU VAT rates is available on the European Commission website. The information is also on the websites of national tax administrations.

How to register for one stop shop?

Each EU member state has an online one stop shop portal where traders (including electronic interfaces) can register. However, this single registration will be valid for all sales to consumers in other EU member states.

What else do you need to know about one stop shop?

For online merchants:

  • The VAT rate of the Member State to which the goods are sent or where the services are supplied is applied;
  • VAT is to be collected from the buyer for distance sales of goods within the EU or for the supply of services;
  • An electronic quarterly VAT declaration is to be submitted through the One stop shop portal of the Member State where you are registered for OSS;
  • Quarterly VAT payments are to be made, declared in the VAT return. This is done in  the Member State where you are registered for One stop shop;
  • Records of all eligible one stop shop sales are to be kept for 10 years.

For merchants with an electronic interface:

  • It is mandatory to display the amount of VAT to be paid by the buyer, at the latest after finalizing the order process. The VAT rate is that of the Member State in which the goods are dispatched/transported;
  • Ensuring the collection of VAT from buyers on distance sales of goods within the EU and for domestic supplies facilitated by the interface;
  • It is submitted to an electronic quarterly VAT return through the one stop shop portal of the Member State where you are registered for OSS;
  • Quarterly VAT payments are to be made, declared in the VAT return, in the Member State where you are registered for One stop shop;
  • Records of all eligible one stop shop sales are to be kept for 10 years.

One Stop Shop regime “Non- Union”

One stop shop outside the Union can be used by taxable persons who are not established in the European. Registration under this regime is for the supply of services. Where the recipients are non-taxable persons (end customers) with a place of performance on the territory of a member state. The supplies of services covered by the regime are – TBE services, accommodation services, transport services, etc.

As of July 1, 2021, the One stop shop regime outside the Union has been extended and can now be used:

Taxable persons not established in the EU for:

  • supplies of services for which the recipients are end customers/users (B2C) and which have a place of performance in a member state, including Bulgaria.

We would like to note that the one stop shop regimes are not mandatory. They are voluntary in nature. Once the taxable person decides to use the one stop shop (OSS) regime, this regime must be applied to all supplies to final consumers in all Member States.

Note!! A taxable person who decides to use one of the one stop shop regimes must register in only one Member State. After that it will be defined as the Member State of identification.

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