From 01 July 2021, the EU will be introducing two new optional VAT schemes for sales to EU consumers (customers in the EU who are not VAT registered). These new schemes are:
- The One Stop Shop
- The Import One Stop Shop
On this date, the EU will also abolish distance-selling thresholds and replace them with a single EU-wide €10,000 threshold (~£8,818).
Sage 50cloud Accounts v27.2 will start to ship to customers on 05 July 2021 and will include updates regarding this new legislation.
What are the schemes for?
The One Stop Shop (OSS)
The OSS will allow businesses to report and pay all of their EU VAT through a single return instead of having to register and pay VAT in each country that they sell to. This means that the VAT on Sales reported through the One Stop Shop are charged at the rate where your customer lives, rather than your own home rate.
E.g, if a UK business sells goods to a customer in France, VAT is charged at the rate applicable in France.
The OSS can also be used to report and pay EU VAT in relation to intra-community distance sales of goods which are still relevant for businesses residing in Northern Ireland with an XI VAT registration.
The Import One Stop Shop (IOSS)
The IOSS can be used to report and pay EU VAT on goods imported into the EU from outside of the EU – that are destined for EU consumers, and have a consignment value of £135 (€150) or less.
When using IOSS destination VAT must be charged at point of sale. This means there is no import VAT upon arrival in the EU, making it easier for the end consumer.
How do I register?
***It is important to note that the new One Stop Shop schemes are optional.***
- Customers in the UK wishing to register can do so in either an EU member state or in the UK, depending on their location and the scheme they want to use
- Customers in Republic of Ireland can register for the OSS in an EU member state, usually their own. Once registered, they can report all relevant EU VAT through a single return and make a single payment to the member state that they registered with