One Stop Shop VAT (OSS)

 


What is One Stop Shop VAT?

The introduction of a new VAT Scheme for sales to customers in the EU commenced on July 1st 2021. This scheme relates to business to consumers based in the EU (B2C who are not VAT registered).

This new scheme has been implemented to simplify the process as it allows you to pay all EU VAT via a single return instead of registering for VAT in each country you sell to.

This an optional scheme so you can choose to use the One Stop Shop (OSS) to manage the VAT on your EU sale of goods however, should you choose not to join you will have to register for VAT in each EU country you make distance sales of goods.

If you decide to join/register for this scheme you will need to advise HMRC



This scheme is designed for low value transactions, with an intrinsic value not exceeding £135 (€150). Two new IT systems will be introduced – one for the collection of VAT on imports of low value consignments and the other for the collection of VAT on intra-EU Business to Consumer (B2C) transactions of goods. Both systems are designed to reduce administrative burdens on business and to facilitate the collection of VAT across the EU. Implementation of the EU’s e-commerce package is in accordance with the UK obligations under the Northern Ireland Protocol.

When raising your sales invoices to an EU consumer you will be charging the VAT rate of that country known as ‘Destination VAT’. For example, if you sell to a consumer in Germany the standard rate is 19% so this is what you will charge on the invoice.

Check HMRC guidance on the One Stop Shop VA Rules.

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