On 1 July 2021, the VAT regime for international e-commerce will change fundamentally. From that date onwards, the seller must almost always apply the VAT regime of the country of the private customer. To avoid having to file a tax return in all EU Member States, you can register for the so-called OSS scheme or one-stop shop since 1 April.
One Stop Shop (OSS)
From 1 July 2021, if you sell to a private customer (i.e. a customer without a VAT number) in another Member State, you must charge the VAT of the country where the customer is established. So, in concrete terms: if you sell goods to a Dutch private customer and you transport the goods from Belgium to the Netherlands (a so-called intracommunity transaction), you must charge Dutch VAT to that customer.
It therefore follows that you must pay this Dutch VAT to the Dutch government and file a tax return. There are two ways to do this.
Either you register locally as a VAT payer. You can then submit a declaration in the Netherlands and pay the VAT owed.
Or recently, there is an alternative: OSS. The OSS scheme allows you to submit a declaration in Belgium for the foreign transactions you have carried out and you can also make the payment directly to the Belgian tax authorities, who will then settle the taxes with the foreign treasuries.
You only need to submit one OSS declaration for all the intracommunity transactions you carried out during the period concerned. So a delivery in the Netherlands, a delivery in France... all in one declaration and with one payment you will then have complied with all your obligations.
What is new?
The OSS regulation is not entirely new. There was already something like the Mini-OSS for certain services (including telecommunications). But as from 1 July this year, this will become the rule for all intra-Community transactions. Until now, you were obliged to register as a VAT payer abroad as soon as your turnover exceeded certain limits. These limits will disappear: in principle, you are therefore always obliged to register abroad ... Unless you register under the OSS scheme.
However, there is still a small lower limit: if you carry out less than EUR 10,000 in intra-Community transactions in a B2C context, you may opt to apply Belgian VAT. This therefore leaves a small opening for those who only very sporadically sell to foreign private individuals (in combination with a cross-border delivery of goods).
Goods are already abroad
The OSS scheme undoubtedly has great advantages for those who regularly supply goods from their warehouse to private individuals in other EU Member States. However, there are some concerns.
As described above, OSS only applies to sales to private individuals in combination with a supply of goods from abroad (considered by the buyer).
Suppose you have a warehouse in Belgium and you sell to Dutch private individuals to whom you then supply the goods, then you have to pay Dutch VAT, and you can do that via the OSS scheme.
Suppose that the goods are not in Belgium, but just over the border in Northern France. Then there is still an intra-Community supply for the Dutch customer, and then the same arrangement applies.
But what if your goods are already in the Netherlands? In that case, Dutch VAT is still due (because the customer is established in the Netherlands) but the goods do not cross the border. There is then no intra-Community supply and, consequently, the OSS scheme cannot be applied. Since the old thresholds for charging domestic VAT have disappeared, you must register in the Netherlands to submit a VAT return there and pay the charged VAT.
ABC sales (triangular traffic)
Similar conclusions must be drawn with regard to so-called ABC sales. These are transactions whereby B (the seller) sells goods from A to C. A will supply the goods directly to C. This type of transaction is not unusual: just think of web shops that sell goods from third parties and once an order has been placed, leave the handling entirely to the third party. Because of all sorts of presumptions and fictions, there is no delivery of goods between B and C (the delivery is made by A to B), as a result of which B cannot invoke the OSS scheme.
The OSS scheme is optional. You must therefore opt for it, but once you have opted for it, you cannot waive it. So if you sell goods or provide services to individuals abroad, you should certainly discuss this with your accountant to choose the solution that works best for you.
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