European Union has brought a lot of convenience to the citizens of the Member States of the EU. Some of the mechanisms that came along with the EU were made in order to simplify the processes that would be needlessly overcomplicated, when done in the standard way. One of such mechanisms is the OSS or One Stop Shop, purpose of which is to simplify the formalities, when supplying customers across multiple member states.
What is it?
OSS is a mechanism made to prevent the need to register by the companies in every member state in which consumers are supplied with goods or services. It allows settling VAT from the distance sales of goods to the private individuals from all member states in the identified member state. Entrepreneurs who can make use of this mechanism are those who:
- Possess place of business establishment or permanent place of business within EU for the VAT purposes due on account of:
- Distance sales of goods to private individuals
- Services sold to the consumers (B2C), where the place the services are delivered is within EU country without place of business establishment or permanent place of business
- Do not possess place of business establishment or permanent place of business within EU for the VAT purposes due on account of distance sales of goods to private individuals
- Through the use of electronic interface according to art. 7a (2) of Act on VAT, regardless of whether place of business establishment is within EU or outside the European Economic Area, simplifies:
- Distance sales of goods to private individuals
- Delivery of goods to consumer, when transport of goods begins and ends within territory of the same EU country
Thresholds
OSS mechanism has been set with the limits of up to 10,000.00 EUR or Poland 42,000.00 PLN, before crossing the threshold supplier can use the standard VAT rate for transactions with private individuals from other member states of the EU, after that it will be necessary to apply the rates appropriate to the country of consumer.
Formalities
Making use of OSS mechanism is purely voluntary, hence it is necessary to undergo registration process within the identified member country in appropriate tax office. In case of Poland the registration form – VIU-R should be directed to Naczelnik Drugiego Urzędu Skarbowego Warszawa-Śródmieście or Head of the Second Tax Office Warszawa-Śródmieście. Do keep in mind that after registration you are obliged to inform the tax office about any changes in data provided within the registration form at the latest on 10th day of the month following the month within which the change took place. Registration is effective from the first day of the calendar quarter following the quarter during which registration form was submitted.
If a taxpayer began the delivery of goods or services before that date, their settlement will be done from the first day of sales under condition that taxpayer informed the tax office about it before 10th day of the month following the month during which taxed activities took place.
OSS involves submitting VIU-D form every quarter before end of month following the end of settled quarter. Do keep in mind that obligation remains even if no activities that would fall under this procedure took place. Another thing to remember is that form must be submitted after end of settled period, submitting it during the period is not allowed.
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