One Stop Shop Moms (OSS VAT)
- 3 minute read
- Finance and Accounting
On 1 July 2021, the One Stop Shop Moms (or VAT) Scheme entered into force. Basically, it means that you can gather your entire EU Value Added Tax reporting in one single place. This is to make it less complicated to report and pay VAT, as you do not have to repeat the process for each country that you operate within.
One Stop Shop Moms / VAT covers 3 schemes: the Union Scheme, the Non-Union Scheme, and the Import Scheme. Note that this will cover the Danish VAT OSS rules.
VAT and Distance Selling of Goods.
Also referred to in Denmark as OSS Moms, the VAT One Stop Shop Scheme is an electronic initiative introduced simultaneously to new rules for distance selling of goods.
The new distance selling of goods rules introduced a new limit of EUR 10,000 excl. VAT. This has replaced the old limits that were set on a national basis. Certain electronically delivered services are included as well.
So, if a business exceeds the limit of EUR 10,000 ex. VAT in its distance selling of goods and/or selling of electronic services – in total, not just per country – then it is required to add VAT in the country that the private consumer is located in.
What is the One Stop Shop Moms / VAT Scheme?
A benefit is that registration for OSS Moms / VAT means that you do not have to register for each country that you sell to. Instead, the OSS Moms / VAT registration works as an add-on to the regular VAT scheme in Denmark, where you pay VAT via the Tax Agency. In that way, the Tax Agency makes sure to allocate the VAT to the relevant countries, meaning that your VAT reporting now:
Can be done in one filing, Is handled with one payment, Is done in one language, Only has to be done with the Danish Tax Agency.
Note that the scheme only applies to output VAT, not input VAT. Also, it only applies when goods are transported across EU borders. So, if you have inventory in the destination country, you must register for national VAT there.
Deadlines for One Stop Shop Moms / VAT.
Deadlines for OSS Moms / VAT are on the last day of the month after the end of a quarter. This is regardless of whether you settle on a quarterly or monthly basis.
Any negative VAT return in Denmark will usually be paid out after this OSS Moms / VAT is due. So, some may benefit from paying their Danish VAT early in the month of its deadline. In that way, they have better liquidity at the time of the OSS Moms / VAT deadline, as there is usually a 3-week processing time on negative VAT in Denmark.
Is One Stop Shop Moms / VAT relevant for me?
First and foremost, the OSS Moms / VAT scheme only applies to goods or services sold to private consumers in EU countries (B2C).
The main thing to consider is whether there is a chance that your sales to private consumers in EU countries will potentially exceed EUR 10,000 (previously DKK 280,000) during a fiscal year. Because that threshold determines if you are required to pay VAT in all the EU countries to which your goods or services are dispatched or consumed. Otherwise, you are only required to pay Danish VAT and file the VAT return as usual.
If you have not exceeded the limit of EUR 10,000, you can register for the OSS Moms / VAT scheme voluntarily. In that way, you do not have to constantly supervise whether or not you exceed the limit within the fiscal year.
Special circumstances (+ non-Union scheme and IOSS scheme).
Electronic marketplaces:
If you are operating an electronic marketplace, platform, or portal that is a medium for selling of goods, you will become responsible for VAT once these goods are imported into the EU.
In other words, your platform is considered a seller AND buyer of the goods. This means that you must pay and charge for VAT in the buyer’s country, as long as the value of these goods does not exceed EUR 150 (more on that below).
If you are a business selling through an electronic marketplace, you must be aware of its role in VAT matters. Because it can vary whether your business will have extra VAT responsibilities or not.
Businesses domiciled in or shipping from non-EU country:
Services:
If your business is located outside the EU but sells services to private consumers within the EU, the VAT must be paid in the countries of consumption. And the limit of EUR 10,000 does not apply here. You can still register for the optional VAT OSS Scheme (the non-Union scheme), and by that only declare and pay your VAT in one country for convenience.
Goods:
Importing from non-EU countries is not VAT-exempt. This means that consumers are charged VAT based on the full value of the goods imported.
If the value of these goods sold to EU private consumers does not exceed EUR 150, you can register for VAT IOSS (the Import Scheme). This ensures that the consumer in the EU does not receive an extra VAT billing after receiving the goods. Instead, VAT is paid at checkout, and the shipment is handled efficiently, as your IOSS number is registered.
However, if it exceeds EUR 150, it’s business as usual, as this will be subject to duties to move on from customs.
At mighty admins, we can assist you with:
One Stop Shop VAT / Moms registration.
Preparation of the mandatory VAT / Moms reconciliation and probability analysis.
Filing and payment of VAT / Moms according to the deadlines provided by the Danish Business Authorities.
… And much more
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