Tax Talk: Cross-border transactions with the EU
Read time: 3 mins
MOSS was designed to make VAT simpler by removing the need for suppliers of business-to-consumer (B2C) broadcasting, telecommunication and electronically supplied (BTE) services to register for VAT in every EU member state where their customers belonged. Instead, they could register for the MOSS scheme and submit a single MOSS return to report the VAT due in the EU member state where their customer belonged. The MOSS scheme was subdivided between the Union scheme designed for EU-established businesses and the Non-Union scheme designed for businesses based outside the EU.
With effect from 1 July 2021, the scope of the existing MOSS scheme has been expanded. The once narrow MOSS scheme has been renamed to the OSS scheme and now include the following additional supplies:
- Intra-EU distance sales of goods
- Certain domestic supplies of goods carried out by deemed suppliers (electronic interface)
- For EU-established suppliers – all supplies of B2C services taking place in the EU member state in which the supplier isn’t established
- For non-EU-established suppliers – all B2C services with premises in an EU member state
- Supplies of BTE services made by a supplier not established in the EU
- Intra-EU distance sales of goods made by a supplier not established in the EU
- Supplies of services other than BTE services
It is also important to note that a fiscal representative may be required to utilise the OSS scheme. However, this will depend on the local requirements in the EU member state of identification.
Online marketplacesSpecial provisions have been introduced whereby a business facilitating supplies through the use of an online electronic interface is deemed for VAT purposes to have received and supplied the goods itself. These are known as the ‘deemed supplier provisions’.
How we can helpThe new rules have been designed to simplify the administrative VAT burden on suppliers with cross-border B2C supply chains and to encourage compliant behaviour through applying a consistent treatment across the EU, e.g. there will no longer be differences in distance selling thresholds between EU member states. Furthermore, they also place an increased compliance burden on electronic interfaces, which facilitate the sale of goods by requiring them to act as if they were the actual supplier of the goods. This will have implications for both the underlying supplier and the electronic interface itself.
Written by Irfaan Abdool Wabh in our London office.