VAT on international e-commerce as from 1 July 2021
On 1 July 2021, the VAT regime for international e-commerce will change radically. From that date, the seller will almost always have to apply the VAT of the country of the private buyer. To avoid having to file VAT returns 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)
As from 1 July 2021, if you sell to a private customer (i.e. a customer without a VAT number) in another member state, you should charge the VAT of the country where the customer is located. More concretely: if you sell goods to a Dutch private customer and you transport the goods from Belgium to the Netherlands (a so-called intra-community transaction), you must charge Dutch VAT to that customer.
Consequently you must pay that Dutch VAT to the Dutch government and you should also file Dutch VAT returns. This can be done in 2 ways.
You can register as a VAT registered person on the spot. You can then file VAT returns in the Netherlands and pay the VAT due.
Recently there is an alternative: OSS. This OSS scheme allows you to file VAT returns in Belgium for the foreign transactions you carried out and you can also make the payment directly to the Belgian tax authorities, who will then settle further with the foreign treasuries.
You only need to file one OSS return for all intra-community transactions you made in the relevant era. So a delivery in the Netherlands, a delivery in France... all in 1 declaration and with one payment you have complied with all obligations.
The OSS scheme is not completely new. There was already something as the Mini-OSS for certain services (including telecommunications). But as from 1 July, this will become the rule for all intra-community transactions. Until now, you were obliged to register as a taxable person abroad as soon as your turnover exceeded certain limits. Those limits do no longer apply: in principle you are therefore always obliged to register abroad... unless you register under the OSS scheme.
Nevertheless, there is still a de minimis limit: if you carry out less than 10.000€ in intra-community transactions in a B2C context, you can choose 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 will undoubtedly have major advantages for those who regularly deliver goods from their warehouse to private customers in other EU member states. But there are still some points of attention.
As described above, OSS only applies to sales to private individuals in combination with a delivery of goods from abroad (from the perspective of the customer).
Suppose you have a warehouse in Belgium and you sell to Dutch private persons to whom you then deliver those goods, then you have to pay Dutch VAT, and you can do this via the OSS scheme.
Suppose the goods are not in Belgium, but just across the border in Northern France. Then there is still an intra-community supply for the Dutch customer, and 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 a border. There is then no intra-community supply and therefore the OSS scheme cannot be applied. Since the previous thresholds for charging domestic VAT have disappeared, you must therefore register in the Netherlands in order to file a VAT return there and account for the VAT due.
ABC-transactions (triangular sales)
Similar conclusions should be drawn from so-called ABC sales. These are transactions in which B (the seller) sells goods from A to C. A will deliver the goods directly to C. These types of transactions are not uncommon: 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. Due to all kinds of presumptions and fictions, there is no delivery of goods between B and C (the delivery is carried out by A to C), which means that B cannot apply the OSS scheme.
The OSS control is optional. So you have to opt for it, but once you have chosen it, you can no longer not apply it. So if you are selling goods or providing services to private individuals abroad, you should definitely discuss this with your accountant to choose the solution that best suits your needs.