One Stop Shop VAT

VAT One Stop Shop Guide – Know More About It

On 1st January 2015, the Mini One Stop Shop was implemented by the European Union. As an extension to this policy EU recently released One Stop Shop (OSS). This new policy will be implemented from 1st July 2021 and will cover a wide range of supplies.

The enlarged One Stop Shop are introduced to simplify the VAT and covers three special schemes:

  • The Non-Union Scheme
  • The Union Scheme
  • The Import Scheme

Under this new scheme, the scope of already non-union and union schemes will be extended, along with introducing a new import scheme.

In this article, we have sifted through the guide and tried to bring the main highlights to help you understand the new policy. Here’s a glimpse of the guide to OSS policy:

  • The special schemes under OSS enable the taxable persons to declare and pay VAT due in the member states. The taxable persons can use a web portal while they are not established in the member state to pay the VAT where they are identified through a member state of identification.
  • In practice, a taxable person registered for an OSS scheme in a member state can use electronic medium to submit OSS VAT returns. Moreover, here you can give a description of the supplies that can be declared in the respective OSS scheme along with the VAT due. Taxable persons can submit the quarterly VAT returns in the non-Union and pay monthly VAT under union and import scheme.
  • Also, under this new policy, if a taxable person chooses to use one of the schemes, he has to declare all supplies that fall under a particular scheme via the OSS return of the respective schemes.
  • These OSS VAT returns, along with the VAT paid, are transferred by the member state of identifications to the corresponding states of consumption safely through secure communication networks. Additionally, the OSS VAT returns don’t replace the returns a taxable person submits to his member state under the domestic obligations.
  • The OSS schemes are available to taxable persons based in the EU and outside EU. Taxable people based in the EU can use the union and import scheme, whereas people based out of the EU can use all the schemes.

Which Transactions Will be Affected by the New Policy?

In general, businesses in the following domains will be affected by the new policy:

  • Distance sales within the EU carried out by suppliers and deemed suppliers.
  • Sales of goods by deemed suppliers in a country.
  • Sales of goods and services EU and non-EU sellers to consumers across the EU
  • Distance sales of goods imported from third parties (countries) carried by suppliers. However goods subjected to excise duties are exempted.

Stay tuned to this space for any updates on the new OSS policy.

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