The One-Stop-Shop (OSS) procedure makes it easier for particular companies within the EU to pay VAT on sales to other EU countries.
The OSS replaces the “mini-one-stop-shop” (MOSS) procedure, which was similar but had a smaller scope.
- What is the One-Stop-Shop procedure in the EU?
- Who can use the One-Stop-Shop procedure?
- What are intra-Community distance sales?
- Do companies have to use the One-Stop-Shop procedure?
- Why use the One-Stop-Shop procedure?
- When can a company use the de minimis rule?
- What are the One-Stop-Shop obligations?
- What are the deadlines for One-Stop-Shop tax returns?
- When are the payment deadlines for One-Stop-Shop tax returns?
- What is a Mini-One-Stop-Shop (MOSS)?
- Dealing with turnover from the UK
The One-Stop-Shop is an electronic portal of the EU that makes it possible to pay VAT on turnover from distance sales of services within the EU. The decisive factor here is that the customers are private individuals who reside in a different EU country.
Participation is open to companies within the EU with turnover from:
- Intra-Community distance sales of goods
- Services provided to private individuals in other EU countries (e.g. heating maintenance for private individuals in Belgium)
- Services provided electronically to private individuals from within the EU (e.g. streams/downloads).
You can register for the OSS procedure with the Federal Central Tax Office (BZSt).
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An intra-community distance sale involves the delivery of goods to a private person (consumer) residing in the EU. The company must ensure that the goods reach the customer by either delivering them itself or using a shipping company.
Participation in the OSS procedure is voluntary. Businesses that choose not to use this procedure must have a VAT registration in each EU country they supply goods or services to.
Companies that do business in other EU countries or export services to other EU countries have a central point of authority for paying VAT.
Without this centralisation, individual registrations would be necessary for each EU country in which sales are made.
The OSS procedure is only useable if a company makes sales in a country in the EU that exceed a supply threshold. The threshold is currently €10,000 for both the previous and the current calendar year.
If the sales are below the €10,000 threshold, the VAT is payable in the country the supplying company has its registered office (Section 3a (5) UStG).
Companies registered with the OSS have certain record-management obligations to make tax returns and payments ready for auditing. First, they have to keep all related tax records for ten years. Secondly, if the:
- Federal Central Tax Office,
- the competent (local) tax office, or
- the competent authorities of other EU member states
requests these records for your business, you must send them electronically (ie, as digital files).
The tax return of companies (declaration of distance sales) participating in OSS need to file tax returns by the following deadlines:
- First-quarter sales by 30 April
- Second-quarter sales by 31 July
- Third-quarter sales by 31 October
- Fourth-quarter sales by 31 January in the following year.
What about if I don’t make any sales in a given quarter?
Businesses must file a tax return electronically even if no cross-border sales to consumers happen during a taxable period. If this happens, a zero return at the end of the period is sufficient.
What happens if I miss a deadline?
If a company fails to comply with this obligation, the Federal Central Tax Office can bar it from using the OSS procedure.
Any declared tax has to be paid no later than the deadline following the end of the respective taxation period (Q1 – Q4).
If a company does not pay the declared taxes by the due date, it may be barred from participation in the Mini-One-Stop-Shop procedure by the Federal Central Tax Office.
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Before the One-Stop-Shop procedure came into effect in July 2021, a similar scheme known as the Mini-One-Stop-Shop (MOSS) was in place. The main difference between the OSS and the MOSS was companies could only use the later procedure only when providing electronic services such as telecommunications, radio and television services to consumers in other EU countries.
After July 2021, the OSS took over, which meant any businesses using the MOSS procedure had to register for this extended procedure.
The MOSS procedure is still applicable for all tax returns with turnover from the UK submitted to the Federal Central Tax Office by 31 January 2021.
For tax returns that were received after this date and are still being processed, the MOSS rules no longer apply.