The EU e-commerce VAT package launch on 1 July 2021 aimed to simplify Value Added Tax reporting for sellers, but also reduce fraud and give marketplaces a new role taking on VAT obligations of their sellers. The reforms implemented captured non-EU sellers and marketplaces selling to EU consumers. This includes UK sellers and marketplaces following the ending of the Brexit transition period after 31 December 2020. This included making the new, simplified reporting regimes available to non-EU sellers and marketplaces.
Below is a summary of how the reforms affect these e-commerce businesses who are not resident in the EU.
Non-EU sellers OSS and IOSS
- Sales to EU consumers of imported goods consignments with an intrinsic value not exceeding €150. Instead of import VAT being paid by the consumer at customs, it must be charged by the seller in the checkout. Non-EU sellers may use the Union Import One-Stop Shop OSS Simply register in any EU state as their member state of identification, and file there each month. They will need to appoint an intermediary Fiscal Representative.
- Sales to EU consumers of goods already in the EU of any value. As the distance selling thresholds are now withdrawn, and to avoid multiple VAT registrations, non-EU sellers may use the Union One-Stop Shop OSS. There is no requirement to appoint an Intermediary.
- Sales to EU consumers of traditional digital services may now be reported through the Non-Union One-Stop Shop OSS This replaced the old Mini One-Stop Shop MOSS return on 1 July 2021.
Non-EU resident marketplaces IOSS and OSS
The EU deemed supplier marketplace rules make marketplaces liable for certain of their third-party sellers’ transactions. These include:
- Sales to EU consumers by EU or non-EU sellers of imported goods consignments of an intrinsic value not exceeding €150. Non-EU marketplaces may opt to use the IOSS return or side-step the VAT obligations by using the Special Arrangements loophole; and
- Sales to EU consumers by non-EU sellers of goods already in the EU of any value. The non-resident marketplace may use the Union OSS to avoid multiple VAT registrations.
For either type of transaction, non-EU marketplace deemed supplier record-keeping obligations now apply. Details records must be kept of seller transactions for at least ten years.
Traditional and digital services non-Union OSS
Any non-EU marketplaces facilitating the sales of digital and traditional services to EU consumers may choose to use the Non-Union OSS to report all sales across the EU member states.
Preparing EU OSS or IOSS returns can be challenging. VAT Calc’s single platform VAT Filer can accurately complete either filings with verified transactional data from our VAT Calculator or VAT Auditor integrated tools.