Do you sell business-to-consumer services to private customers in the European Union? If so, you need to know that VAT rules that came into force from 1st July 2021. This post gives you an outline of the old rules, plus information about the current rules and the VAT One Stop Shop.

Old VAT rules for EU sales

The old VAT rules for UK businesses trading with the EU were rather complex. You normally had to register in each of the EU member states you traded with. You then had to report and pay EU VAT in each of those countries. It could easily become a bureaucratic nightmare.

There were exceptions. For example, a “Mini One Stop Shop” (MOSS) applied for VAT on sales of digital services to the EU. This allowed you to register for VAT in a single EU country and then declare VAT payable in a consolidated, quarterly return.

However, MOSS is now long gone and has been replaced by a wider-ranging scheme.

Current VAT One Stop Shop Rules

The European Union now operates the VAT One Stop Shop (OSS) scheme. This is essentially an extension of the MOSS scheme, slightly simplified and extended to cover a wider range of supplies. You can read the full EU documentation here – but be warned: it runs to nearly 60 pages!

So, what does it mean for supplies of B2C services to the EU? Like the MOSS scheme, the One Stop Shop did away with multiple VAT in different EU countries. Instead, you make a single VAT registration in an EU member state, but then charge and account for the VAT according to where in the EU your private customers are based.

For example, you could register for the VAT One Stop Shop scheme in France and submit your VAT return there. However, in that return you account for sales to Germany, Italy, Spain, Holland and other EU member states according the VAT rate that applies to each, individual country.

Does the VAT One Stop Shop apply for the sale of goods?

Yes, but we have found that suppliers of B2C services are more likely to be unaware of the new One Stop Shop system. For further advice on the sale of goods, please talk to us.

Anything else I need to know? 

Well – no longer having to register for VAT in every relevant EU country has to be a good thing, surely!

However, to take advantage of the scheme, you need to be fully aware of its rules. THP can help you understand these and apply them, as well as assisting you with your OSS registration. Once registered, we can also ensure your quarterly OSS VAT returns are submitted accurately and on time.

To find out more about how we can help, please get in touch with your THP account manager or use the form below to send us a message.

Need further advice on any of the topics being discussed? Get in touch and see how we can help.

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