From 1 July there are three ‘one stop shop’ (OSS) VAT schemes that UK businesses need to be familiar with when selling to consumers (B2C: non-business customers) who are based in the EU:
- Union OSS
- Non-Union OSS
- Import OSS (IOSS)
All three schemes operate in a similar way in that the VAT is paid by the consumer at the local VAT rate applicable to the goods or services, and the seller reports and pays all the VAT charged in the different EU countries through a single OSS return. But the three different OSS schemes require separate registrations and separate returns.
The old VAT MOSS, which has until now only applied for sales of digital services and broadcasting, is extended to cover other services such as accommodation, admission to events and services related to land. From 1 July 2021 UK businesses will need to use the Non-Union OSS for the supply of services.
From 1 January 2021 the de-minimis turnover threshold for using VAT MOSS disappeared for UK based businesses, because the UK was no longer an EU member. From that point UK businesses have had to register for the Non-Union VAT MOSS scheme as we explained on 21 January 2021.
Where a UK business has goods held inside the EU at the time of sale, and is selling to EU based consumers, it needs to use the OSS where the goods are valued at no more than €150/ £135. This OSS replaces the EU distance selling rules. The distance selling threshold of €35,000 per member state is replaced with a single €10,000 threshold for all sales to customers in all EU member states.
The Import OSS relates to goods which are not held inside the EU at the time of sale, and the consignment value does not exceed €150. A UK based business needs to register for IOSS within an EU country (such as the Republic of Ireland) but it may need to appoint an accountant in that country to act as their intermediary.
Written by the Tax Advice Network