Have you ever heard of the One Stop Shop (OSS)? No, then all German online retailers that also sell to private customers (B2C) in other EU countries should pay attention now: Because the vat tax especially for online shop retailers will become so-called distance sales as of July, 1. The national delivery thresholds will be replaced by a Europe-wide uniform de minimis threshold of 10,000 euros.
What Does It Mean Exactly And Where Are The Advantages?
Distance sales are deliveries of goods to private individuals within the EU. The prerequisite: the company has turned over at least 10,000 euros through intra-EU distance sales. If this is the case, the OSS procedure can be applied to these intra-EU distance sales from July onwards. The advantage for the online trader: VAT declarations in individual countries and the observance of different delivery thresholds are no longer necessary. A uniform threshold of 10,000 euros then applies, from which value the VAT is always payable in the country of destination. With OSS, the German online trader only has to register once centrally for tax purposes at the Federal Central Tax Office.
In addition, the e-commerce company have no longer to write invoices for the sales that are reported via the OSS. This is intended as an incentive to use the One Stop Shop. Moreover the OSS report only has to be submitted four times a year, i.e. by the end of the month at the latest for each quarter. Registration with the German OSS is carried out via the online portal “MeinBOP” of the Federal Central Tax Office and that has been possible since April 2021.
The OSS procedure is voluntary and is particularly helpful to online retailers who have only a single, central warehouse in Germany from which they ship their goods to private customers in the EU. One reason for not participating in the OSS procedure can be the storage of goods in other EU member states. This is the case, for example, in fulfilment centers when selling via online platforms such as Amazon. For these German online retailers, local registration in the country of destination will probably still be required.
This Information Must Be Provided Via The OSS Procedure
Furthermore, online merchants should remit sales tax to the Federal Central Tax Office by the last day of the month following the taxable period. The Tax Office then handles the distribution of the sales tax among the individual member states.
Get Prepared To Avoid Problems With The Tax Authorities
The new regulations are complicated. Online retailers should prepare well and quickly check their goods channels and delivery structures carefully — before deregistering in another EU member state and opting for the OSS procedure. It is best to ask experts for help, because the tax authorities will check the companies’ information on the new taxation procedure. What is often underestimated is the variety of information sources that the tax authorities can access as part of the taxation procedure. For this reason, online traders should be aware of all the tax-related framework conditions of the OSS procedure.
For further questions, please contact our CEO Magnus Bilke (magnus@donefinancials.com).
