OSS on distance sales postponed until July 2021
The VAT e-commerce package implementation date has been delayed from 1 January to 1 July 2021.
The European Commission recently announced that the implementation date of the One Stop Shop (OSS) scheme for distance sellers is delayed until 1 July 2021. This scheme was expected to be introduced on 1 January 2021. Given the current issues and delays due to Coronavirus, and the requirement for Member States to adapt their web portals and administrative processes, the Commission has now allowed a six-month extension.
This information was published in the website of the European Commission following the European Council proposal on 8 May 2020.
What is OSS?
One Stop Shop allows online businesses to report all their sales of goods to customers across Europe in a single, consolidated VAT return submitted in its country of establishment.
Currently, EU businesses selling B2C online to customers in another EU country should follow the distance sales regime, which requires a VAT registration in the country of the customer when a given threshold is exceeded. In practice, this regime requires multiple VAT registrations across Europe, which increases complexity and administrative costs for online sellers.
With the new regime, online sellers would no longer require multiple VAT registrations, as all foreign sales would be reported in the OSS return. A separate OSS registration would be required and several other formalities must be kept (for example, local VAT rates in each country would still apply) but the requirement of submitting foreign VAT returns would normally be scrapped.
How will Amazon sellers be impacted by OSS?
Amazon sellers may benefit from the OSS in July 2021, however, foreign VAT registrations may still be required in case they keep stock in warehouses located in foreign EU countries. This is the case for sellers using the pan-European FBA program.
Local sales from these warehouses, as well as movements of goods from and into each foreign warehouse, will need to be reported in the local foreign VAT return. The application of OSS for Amazon sellers is complex, so we recommend contacting Marosa to understand the impact of these rules on your future VAT obligations in case you are an Amazon seller. Our online sales team will be happy to resolve all your questions about the new regime.
More information and next steps on OSS for online sales
In the following months, we expect Member States to start publishing information about the process to register for OSS, as well as confirming local requirements on key compliance issues like Intrastat, corrective VAT returns, vouchers, and other relevant VAT rules impacted by the new regime. Online businesses should follow up on these changes and anticipate the work on registrations if they want to benefit from the OSS as from the implementation date.