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Single EU VAT registration – extending OSS to all cross-border B2C and certain B2B transactions

Extension of OSS return – EU Single VAT registration – for cross-border B2C and B2B transactions as part of VAT in the Digital Age reforms

The European Commission (EC) is set to publish draft VAT Directive amendments this autumn for the extension of the new One Stop-Shop OSS to all remaining cross-border B2C transactions and some B2B transactions. A public consultation is completed at the start of May 2022.

The aim is reduce the VAT compliance burden, boost tax revenues, encourage the development of the Single Market and cut the VAT Gap. Watch our VAT TV episode on the Single VAT Registration proposals.

Update: reforms proposals to OSS and IOSS are being reviewed in a public consultation, with VAT Directive amendments due before the end of 2022.

This is part of the VAT in the Digital Age reform proposals covering two other areas:

Extension of OSS to all B2C and B2B – 2022 proposals; 2024 implementation

The Commission has been reviewing since summer 2021 areas where the single pan-EU VAT return could be extended to reduce the number of foreign or non-resident VAT registrations, and the challenges around this. This would cover cross-border B2C use cases where the OSS does not apply, and bringing in some or all B2B goods transactions – see detailed issues below. The EC has now launched a public consultation to complete early Spring 2022. Draft VAT Directive proposals would then be published in the Autumn of 2022 for implementation at the end of 2023 or start of 2024.

Follow all the EU’s completed and proposed reforms via our EU VAT reform tracker.

Detailed issues to be resolved

  • Extending OSS to B2C transactions where seller first moves their stocks in B2B transaction to another EU state for storage prior to sale. Any solution would likely require an additional reporting mechanism.
  • Would extensions of OSS create terminal problems for drop-shipping model
  • Extending to other B2C goods and service supplies where vendor not resident:
    • Installation and assembly of goods
    • Goods made on board means of transport
    • Goods at weekly market
    • Goods supplied at exhibition, trade fair
    • Gas, electricity and heating
    • B2B supplies of services where there is a ‘may’ option on using the reverse charge:
    • Immovable property
    • Passenger transport services
    • Admission to cultural, sporting, exhibition etc events
    • Restaurant and catering
    • Short-term transport hire
  • Intra-Community supplies from a Member State where the supplier is not established (to declare the exempt intra-Community supply); and
  • How would non-residents recover local input VAT if OSS-only registration
  • Exports to a third country/territory from a Member State where the exporter is not established (to declare the exempt export).
  • Can the IOSS threshold of imported consignment sales not exceeding €150 be raised higher or simply withdrawn altogether
  • Could the reverse charge instead be used on B2C transactions – movement of own stocks prior to sale to consumer. What would this mean for the integrity of the VAT model?

EU VAT in the Digital Age reforms

EU VAT in the Digital Age
3 reforms to improve efficiency of VAT for all and reduce fraud
1. Digital Reporting Requirements What options are there to harmonise the digitisation of transaction reporting amongst the member states. The EU is looking at: Continuous Transaction Control (CTC) e-invoicing, live reporting; or Periodic Transaction Controls (PTC) invoice listings. Also if at a country, EU or hybrid-level.
Read more about EU Digital Reporting Requirements (DRR)
2. VAT treatment of the platform economy How can EU member states adapt their tax systems to reflect the new role taken on by Electronic Interfaces - platforms and marketplaces which have enabled millions of private individuals to provide services and goods for the first time. How should the VAT Directive be modified to capture the new dynamics created in the gig and sharing economies, including imposing full deemed supplier VAT obligations on platforms as with 2021 e-commerce package for goods.
EU VAT Treatment of Platform Economy update
3. Single EU VAT registration; extension of OSS to all B2C and certain B2B Following the 1 July 2021 introduction of the One Stop-Shop (OSS), can this be extended to cover more B2C and all / any B2B transactions (e.g. movement of own stock across borders) to reduce the foreign, non-resident VAT registrations and reporting burden
More details on Single EU VAT Registration

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