As the EU VAT reforms approach, we’ve been running our webinar Unpacking the EU VAT Changes to explain how international ecommerce businesses can prepare to comply from July. Having opened the floor for attendees to ask the questions they needed answered, we received lots of great queries that we’re sure would be useful for many businesses.
Here we’ve put together some of the most frequently asked questions and answers so that your business can have all the information needed to continue selling to the EU with ease past July. If you haven’t found an answer to your question here, be sure to get in touch with our team of experts to discuss your VAT obligations!
When using IOSS who would an Intermediary be and what role would they play?
When registering for IOSS, if you are based outside of the EU you may be required to appoint an Intermediary. An Intermediary is someone who will be held jointly liable for the payments of the VAT due on your imported goods.
At SimplyVAT.com we take on the role of Intermediary for our clients using IOSS. Through our longstanding connections with local tax authorities in the EU and a team of staff speaking over 20 languages, we can efficiently handle your IOSS registration and filings.
If I hold stock in the UK and an EU country, do I need to register for OSS and non-union OSS?
Firstly, if you make intra-EU distance sales of goods, from stock held in one EU member state to the rest of the EU, you would be able to register for Union OSS. Secondly for stock held in the UK, if you are making distance sales with consignment values below EUR 150 to the EU, you could also register for IOSS. It’s important to remember that IOSS only accounts for low value supplies so will only cover consignments below this threshold.
Keep in mind that if you sell goods to UK customers from your UK held stock, you will still need a local VAT registration to record and submit returns which account for the VAT due on these.
If you hold stock in an EU country you still need to register for VAT, but do I need to register for OSS too?
Holding stock in any EU country will trigger a local VAT registration there so those registrations should be kept. However, you can choose to register for OSS which will enable you to choose one country to report all your cross-border EU sales. Via OSS you are only required to file a single quarterly return which can really cut down on administrative time and effort.
Do the changes affect B2B transactions?
The changes coming on 1 July 2021 will not apply to B2B transactions, at present the only transactions affected are B2C. Both OSS, Non-Union OSS and IOSS only apply to B2C transactions.
If you need guidance or have any questions about B2B VAT compliance do feel free to get in touch with us and our team of consultants may be able to help you.
What happens if I make sales both above and below the EUR150 limit?
This is a common occurrence for businesses selling online; for those orders which exceed EUR 150 you will need to decide if you want to be the importer of record. If you do decide to be, you will need to register for VAT in the country where the goods are dispatched to and follow standard importation rules.
For any sales that fall below the EUR 150 threshold it could be beneficial to register for IOSS to record and report any distance sales of importing goods into the EU. Using IOSS means you won’t need to pay import VAT at the border and your goods can be cleared through customs faster for better customer experience.
We hold stock in EU warehouses via Amazon Pan-EU FBA, so we have a VAT registration in every country – do the July changes affect us?
This will depend on where you are based. If your business is based in the EU, the only change that will affect you is that you can register for OSS to account for any cross-border B2C sales you make through Amazon FBA warehouses.
If you are not based in the EU, Amazon will take responsibility for VAT collection and reporting on B2C sales at the point of checkout. However, as you are still holding stock in Amazon’s EU warehouses you will still be required to keep your local VAT registrations.
How does a business decide where they register for OSS?
An important element to consider is the language that you will feel most comfortable using. When registering for OSS the portals used will be in the language of that country, so it’s essential you consider which language would be most easy to use. Our team at SimplyVAT.com speak over 20 languages so can always help with your registration for OSS.
Remember when registering for OSS you will need to choose a member state where you are already holding stock.
If you are established in the EU, then you need to register for OSS with the tax authorities of your country of establishment.
How to the changes affect VAT reporting of digital B2C sales?
If you are making B2C digital sales, you may already be registered with the existing MOSS (Mini One Stop Shop) Scheme. If you are EU based, this scheme will be extended into the OSS and you can continue to report these sales through this. If you are Non-EU based, you can register for the Non-Union OSS Scheme which only deals with digital supplies. The changes will mostly not affect you in terms of reporting as you will still account and file your VAT returns in the same way as before.