In 2021, MOSS expanded into the OSS and Non-Union OSS schemes, and IOSS was introduced for the first time. When the schemes were introduced, some businesses found it difficult to decipher whether they were registering for the correct one.
It's vital that your business has the correct VAT registrations. Registering under the wrong scheme can result in paying your VAT to the wrong tax authority - leaving your business uncompliant or out of pocket.
For example, SimplyVAT fought for a client to receive a €1m refund for VAT incorrectly paid through a MOSS registration.
The business was originally advised by another party that they should register for the MOSS scheme. This was to account for the VAT due from the sale of their digital services. They contacted SimplyVAT and asked us to investigate whether this was the correct advice.
Our experienced Consultancy team analysed the situation utilising their years of VAT expertise. We established that their services were not deemed electronically supplied. This meant their supplies were not subject to VAT where the customer was established. Therefore, the VAT they had been remitting through their MOSS return was incorrectly paid.
We worked tirelessly with various tax authorities to obtain confirmation of our findings. Since then, we have been able to secure our client the €1m of refunds owed to them.
“Due to a lack or limited knowledge of the VAT rules on what constitutes an electronically supplied service, millions of euros are being incorrectly collected and paid to the tax authorities, which may have a big impact on the price of the service being charged by the seller and their profitability.”
- Tayeb Benhamza, Principal VAT Consultant at SimplyVAT
The MOSS scheme was extended into the Union and Non-Union One Stop Shop (OSS) in 2021 as part of the EU VAT Ecommerce Package.
The Union OSS Scheme can be used by all suppliers to account for the VAT due on B2C intracommunity distance sales of goods. It also covers EU-established suppliers selling B2C services to EU customers.
For Non-EU established businesses, Non-Union OSS can be used to account for the VAT due on B2C sales of services, including digital services.
With the introduction of the new schemes, many businesses may have found themselves unsure how to interpret the new legislation.
