What is changing from 1 July 2021?
Currently EU businesses making distance sales of goods from within the EU above a certain threshold (EUR 35 000 or 100 000, depending on the Member State) to buyers located in another EU Member State need to register and pay VAT in the buyers’ Member State. This is very costly and burdensome.

From 1 July 2021 new rules enter into force. According to these new rules, below a threshold of EUR 10 000 VAT can be paid to the Member State where the selling business is located. Above this threshold, businesses will be able to easily register in a One-Stop Shop (OSS) – where they can easily declare and pay the VAT due in other Member States.

What is the One-Stop Shop (OSS)?
The OSS is an electronic system which simplifies up to 95% of VAT obligations for sellers of goods and services to consumers throughout the EU, as it allows them to:

  • register for VAT electronically in a single Member State for all intra-EU distance sales of goods and for business-to-consumer supplies of services and thus avoid VAT registration in multiple Member States;
  • declare and pay VAT due on all these supplies of goods and services in a single electronic quarterly return;
  • work with the tax administration of their own Member State and in their own language, even if their sales are cross-border.

Please note that these changes do not affect the sale or delivery of goods to B2B customers in the EU where current VAT reporting requirements will continue to apply. You will still be required to meet your VAT registration requirements in the EU countries in which you hold inventory.

Which sales does the OSS cover?
The OSS covers the following:

  • all services to EU consumers;
  • distance sales of goods to EU buyers

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