There’s a new emporium opening to serve the whole of the EU – but this “one stop shop” (OSS) is actually a value added tax scheme which has something for everyone.
Up until now, the European Union explains, businesses selling goods worth more than €35,000 or €100,000 to other member states (depending on where they were based), had to register and pay VAT in each place where they made these sales. This, says the EU, was “very costly and burdensome”.
From July 1 2021, the rules have been dramatically simplified.
Now, if you sell goods worth less than €10,000 in total to all other EU states, you can simply pay the VAT tax (known in Dutch as BTW) within the Netherlands. If you sell goods to other EU states once exceeding the threshold, you can make use of the new OSS rule.
The OSS is an electronic system which, the EU says, simplifies up to 95% of VAT obligations for businesses selling goods and services. Businesses can register electronically in a single EU state for all of these sales (for instance, in the Netherlands), then declare and pay the foreign VAT in a single return.
Claiming back BTW
Although the OSS service makes paying sales tax simple across EU member states, unfortunately it doesn’t help if your business has lots of costs that you want to claim back against the tax you have paid.
For this, you will indeed have to register in each country and follow its process for reclaiming VAT. This might be in your interest if you have a company, for instance, that sells goods online and needs to pay frequently for return postage.
If a Dutch company sells shoes in France and Belgium, making €5,000 and €3,500 per year in each country respectively, the total will be just €8,500. The company can simply charge and pay Dutch BTW on all of these sales.
But if the company also sells to Denmark, adding another €2,000 in annual sales, this takes it above the €10,000 threshold. It will have to use the OSS rule, applying through the Dutch tax office. If the business fails to do this, VAT will need to be declared and paid in the three lands individually, as before.
How to apply
To apply for the One-Stop Shop scheme, go to Mijn Belastingdienst Zakelijk
. You will need a level 3 eHerkenning
verification. The sales tax will need to be reported in by the last day of month following each business quarter that you are reporting.
If you previously were using the MOSS ruling, you will automatically have been registered for the new OSS system.
For advice on this and any other local and international business issues, you can always contact our experts at Blue Umbrella.