As July 1, 2021, the date from which the new measures of the VAT e-commerce package will become effective, approaches, it is advisable for traders engaged in distance selling and B2C services in the EU to assess the convenience of joining the special One Stop Shop(OSS) scheme.
We reproduce below a concise but comprehensive commentary that appeared in Eutekne-Fiscos:
Given that the new rules of Directive 2017/2455/EU, transposed by Legislative Decree 83/2021, involve, among other things, the abolition of the current reference thresholds for intra-Community distance sales of goods and the introduction of a single overall threshold (lower than the previous ones) of 10,000 euros, smaller operators should also assess the effects of the new measures.
The application of the “Union” threshold, in fact, which takes into account both intra-Community distance sales of goods and TTE supplies to individuals in other member states, could impose an obligation on smaller entities to pay VAT in other member states for such transactions as well.
Under the ordinary rules, where a taxable person was engaged in “above-threshold” distance sales, he would be obliged to identify himself (either directly or through a tax representative) in each of the states of destination of the goods. However, the EU legislator has offered taxable persons an alternative route for declaring and paying VAT on such transactions, namely, the option of joining the special OSS scheme.
By joining theOSS, which is the extended version of the MOSS (previously limited to “TTE” supplies), the taxable person can avoid registering in the individual “consumption” states, declaring and paying tax in the state of identification alone, which will remit the VAT to the relevant states.
It should be noted that the application of the special regime is not automatic for those who exceed the 10,000 euro threshold. In fact, theOSS constitutes an optional scheme. Therefore, individuals who make intra-EU distance sales in 2021 should already consider joining the scheme now, taking into account the relevant registration effectiveness deadlines.
According toArticle 57-quinquies of EU Reg. 282/2011 (as amended by EU Reg. 2026/2019), the effects of registration take effect on the first day of the calendar quarter following the communication (see also EU Commission’sOSS Guide ), so a VAT taxable person who intends to make use of theOSS from next July 1 should register by June 30, 2021.
However, it is also provided that if the taxable person begins to make supplies under the scheme prior to registration, he may avail himself of the scheme from the date of the first supply by notifying the Member State of identification, no later than the tenth day of the month following the transaction, that he has commenced activities under the scheme. If this deadline is not met, the taxable person would not be able to avail himself of theOSS and would have to register and declare VAT in the Member State of “consumption.”
Therefore, a taxable person who starts making “above-threshold” intra-EU distance sales from July 2021 should have until the following August 10 to register with theOSS, effective from the date of the first July transaction covered by the scheme.
In addition, according to the EU Commission’s One-Stop Guide, if a taxable person is registered under the EU or Non-EU MOSS scheme before July 1, 2021, he will continue after that date to use the same scheme under theOSS, sending his updated data to the state of identification if necessary.
Looking forward to more information and application standards We invite you to make an appointment with our firm for a comprehensive evaluation and planning.
