The European Commission (EC) will publish proposed draft amendments to the EU VAT Directive to extend the One-Stop-Shop (OSS) to potentially all remaining cross-border Business-to-Consumer (B2C) and some Business-to-Business (B2B) transactions this autumn.
The OSS is part of the EU VAT e-commerce package reforms introduced in July 2021, and currently is available to all e-commerce companies that sell goods and some services to EU consumers online. By using the OSS, these types of traders can report and pay their EU VAT to all member states through one EU member state’s online VAT portal. This prevents the need for these types of merchants to VAT register in every single country where they’re selling goods to consumers.
If approved, the EC is planning to implement the amendments by the end of 2023, and will look to potentially include the below transactions under the OSS regime:
- B2B movements of goods before the ultimate sale to the consumer – This could be where a business moves their stock from one EU country to another for storage before the sale to the consumer in that country.
- B2C goods and services not currently covered, such as the installation and assembly of goods.
- B2B supplies of services where VAT is owed in the country of the underlying supply.
The EU hopes that by extending the reach of the OSS it will further reduce the VAT compliance burden for businesses, boost tax revenues for VAT authorities, encourage the development of the EU Single Market, and cut the VAT gap (The gap between the theoretical amount of VAT due and the actual amount of VAT collected in the 27 EU member states).