Simplification of VAT obligations
for e-merchants

The EU has implemented new rules to modernise VAT for cross-border e-commerce since July, 1st 2021. The reforms are affecting businesses that are based in the EU and businesses which sell goods into the EU from outside.

Your business is concerned if you:

• Sell goods from warehouses located in the EU to private individuals in the EU
• Sell goods directly from a third country to private customers in the EU using the delivered duty paid (DDP) import procedure
• Use a marketplace to sell your goods to individuals in the EU. A marketplace is any platform that brings together a buyer and a seller, resulting in the delivery of goods to the buyer.

The changes do not concern your business if you:

• Only sell to professionals (B to B) in the EU
• Do not make sales through a website or marketplace.

To simplify the obligations of merchants under the new rules, the EU has established the One Stop Shop (OSS) and Import One Stop Shop (IOSS). These tools can be used to simplify your filing obligations in the EU.

One Stop Shop

The OSS platform is created by the EU to simplify the life of e-commerce companies. The OSS desk is open and accessible for companies both established in the EU as well as non-established companies and marketplaces. The use of the platform is optional. To have access to the new platform, you should first apply for an OSS number. Companies then also have the possibility to appoint a proxy for the OSS number for the VAT agents.

The benefits of OSS are:

• #OSS registration in only one country

• Declaration of intra-Community distance sales & B to C services as well as e-services sold in all EU countries

• 1 VAT filing per quarter

• Single payment of VAT due in all EU countries

• Exemption from invoicing

Import One stop Shop

The IOSS platform is similar to the OSS platform. The big difference, as the name already tells us, is that here we're talking about goods imported to the EU to be directly delivered to the private consumer. In other words, on the moment of ordering by a private individuals, the goods are outside the EU. The IOSS desk is open and accessible for companies both established in the EU as well as non-established companies and marketplaces. The use of the platform is optional. To have access to the new platform, you should first apply for an IOSS number. There is also an obligation to appoint an intermediary/VAT agent for non-EU established companies.

The benefits of IOSS are:

• #IOSS registration in one country

• Allows for the declaration of VAT due on distance sales of goods imported into the EU when the parcel sent has a maximum value of €150

• Single payment of global VAT due on sales in all EU countries & 1 monthly filing

• Exemption from invoicing

• No hidden costs for customers

• Exemption from import VAT

Using the OSS/IOSS means :

• Your business no longer needs to be VAT registered in each EU country where you do business
• You can file VAT returns for all EU countries via a single electronic portal.