All you need to know about OSS VAT returns
An e-commerce seller using one of the OSS schemes needs to submit an OSS return declaring all sales falling under the scope of the OSS rules. These OSS return includes VAT charged under the VAT rates in each country of consumption.
In practice, the e-commerce seller will report to the tax authorities in his or her home country (or country of registration if he or she is a non-EU seller) how much VAT he or she owes to each tax authority of the country of consumption. A single payment will be made for the total sum of VAT due across Europe. The tax authority of the country where the OSS return is submitted will then transfer the amount to the country of consumption according to the information reported in the OSS return.
Content and currency of OSS returns
The OSS return has a standard content and structure in all EU member States.
OSS returns are completed using one currency only. This will often be EURO, but some Member States may require OSS returns to be completed in their local currency. In those countries, the exchange rate published by the European Central Bank should be used.
The content of the OSS return is split in sections according to the sales made under each scheme.
- The Non-Union scheme will include supplies of B2C services by non-EU companies to customers in another EU country.
- The Union scheme will include a) supplies of B2C services by EU established companies to customers in another EU country; b) intra-Community distance sales of goods; and c) deemed supplies made by marketplaces.
- The Import OSS scheme will include distance sales of goods imported into the EU where the shipment value is below 150€.
It is not possible to deduct VAT in the OSS return. VAT incurred on purchases must be deducted via the domestic VAT return or via the EU mechanism to recover VAT incurred abroad.
Frequency of OSS returns
As a general rule, OSS returns are submitted quarterly according to calendar quarters. Calendar quarters are January to March, April to June, July to September, and October to December.
OSS returns when using the Import OSS scheme are submitted on a monthly basis.
Deadline of OSS returns
OSS returns are due by the last day of the month following the reporting period. For example, the Q1 OSS return is due by 30 April, and the Q3 OSS return is due by 31 October. Likewise, monthly OSS returns are also due by the last day of the month following the reporting period.
If the due date falls on a bank holiday or weekend, this deadline is not shifted to the next working day.
Payments of VAT in OSS returns
The payment of all VAT due reported in the OSS return is made to the tax authorities of the EU country of OSS registration.
In practice, a unique reference is provided by the tax authorities once the OSS return is submitted. This reference must be used in the payment of the VAT due resulting from this OSS return.
The payment must be made and reach the tax authorities bank account before the due date to submit the relevant OSS return.
Penalties for late payments and late filing of OSS returns
If an OSS return is submitted late, the tax authorities in the country of identification will send a reminder electronically on the 10th day following the date on which the OSS return should have been submitted. Any further reminders will be issued by the Member State of consumption. Also, penalties will be assessed and imposed by the Member State of consumption.
In case of late payments of OSS returns, the seller will also receive a reminder on the 10th day following the due date to make the payment. Further penalties for late penalties will be assessed by the tax authorities in the country of consumption. If the EU country of consumption sends a reminder, the VAT due must be paid directly to the tax authorities of that specific Member State.
You should also take into account that the OSS registration can be cancelled in case of persistent omissions in your OSS returns.
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