Life as an entrepreneur or self-employed brings with it a series of tax obligations to fulfill. But did you know that there is a system that allows you to declare VAT in only one country of the European Union instead of in several countries at the same time? Stay tuned to this article and find out more about the novelties of the OSS system!
What is the MOSS regime?
The Mini One-Stop Shop or Mini One-Stop Shop (MOSS) was approved by the European Union on January 01, 2015, which directly involves TRE (telecommunication, broadcasting or electronic) services and establishes that VAT can be taxed in the country of establishment or residence of the final consumer.
The MOSS is known as a special regime that seeks to reduce indirect tax burdens on entrepreneurs and self-employed.
This is why it is understood as a simplification measure for the entrepreneur who provides his services to private end-consumers established or resident in an EU Member State other than that of the service provider in question.
In this way, professionals do not have to register in each European Union State in which they provide their services in order to declare VAT, and can thus carry out their procedures through the Electronic Headquarters of the State Tax Administration Agency.
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OSS: the replacement for the MOSS regime
As of July 1, 2021, the MOSS regime will be replaced by the OSS (One Stop Shop) regime, since its scope has been extended to all services provided by entrepreneurs or professionals to private end-consumers that take place in Member States where the entrepreneur is not established.
Likewise, distance sales are included for goods, as well as for certain deliveries.
We can say that, the OSS regime represents an electronic system that contributes to synthesize the VAT liquidation for the sellers of goods as well as services offered to the consumers belonging to the European Union.
Changes with the OSS regime
In order for you to have a better understanding of the new one-stop shop (OSS), here are the main changes present in this regime:
On the other hand, the obligations of traders with respect to VAT settlement are maintained, and in the event that the taxpayer does not wish to register for this tax in the different Member States in which it provides its services, it will be obliged to do so in at least one country and file its quarterly returns and make the payment under the OSS regime.
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One-Stop Shop (OSS) Modalities
In the following scheme we show you the three current modalities through which you can register to be part of the OSS – one-stop scheme:
Regime external to the Union (EUOSS)
As its name indicates, this regime is intended for entrepreneurs or professionals not established in the European Union, who provide B2C services to consumers in different Member States.
However, it is provided that even if the taxable person, although not established, is registered or obliged to register for VAT in one of the Member States in respect of supplies other than business-to-consumer services, he may still benefit from EUOSS.
Union Regime (UOSS)
In this modality, those businessmen or professionals who carry out the operations subject to the regime, regardless of whether or not they are established in the EU, can be included.
Import Regime (IOSS)
The import regime is aimed at entrepreneurs or professionals who are either not established in the EU or who do not have a permanent establishment.
In these cases, distance sales are carried out from abroad to individual consumers in the Member States, the shipment of which does not exceed 150 euros (except for products subject to excise duty).
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Who can register for OSS?
Entrepreneurs, professionals or suppliers of services and products may register at the VAT one-stop shop (OSS), both those established in a Member State and those operating from a third country, with final consumers in different EU countries.
The following are some of the cases in which professionals or companies may apply for the OSS regime:
Companies established in a single Member State and carrying out sales other than to final consumers in some of the other Member States
Third-country companies making distance sales to final consumers located within the European Union
Companies that are in any of the above situations and offer services such as: web hosting and domain providers, car rental companies, real estate services, restaurants, catering, as well as digital content platforms for streaming, downloading applications or music.
What about taxpayers?
In the case of taxpayers, they are allowed to register in more than one of the modalities of the regime.
Therefore, if you are a taxpayer established in the EU, you may be eligible for the UOSS and IOSS regime.
On the other hand, if you are a taxpayer not established in the EU, you will be able to benefit from all three regimes if you carry out transactions that allow you to be included in each modality.
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How to register to the OSS regime?
If you want to register for the one-stop shop, you can do so electronically, through the OSS portal, in any of the member states of the European Union.
It is important that you fill in form 035 and select the modality you wish to apply for. In case you apply for different regimes, you must submit a form each time.
The VAT return will be valid for all transactions in the rest of the European Community countries.
The good news, as you could realize in this article, is that the recent OSS one-stop-shop regulation contributes to taxation in only one EU country in case of entrepreneurs or professionals offering their services in different States.
Being up to date with the VAT declaration is a point of utmost importance in the business world, and in TAS Consultoria we have a team of tax experts who can advise you on the subject if you wish.