Currently businesses selling goods over the internet fall within the Distance Sales Regime, and this can potentially result in multiple VAT registrations in the different EU Member States. As from 1st July 2021, this will change through the implementation of the OSS (One Stop Shop) to these types of supplies. Here, we are looking at e-commerce website operators established in one Member State from where they are shipping goods to their customers situated in the different EU Member States.
In the case of EU suppliers selling more than Euro 10,000 annually, such sales will be deemed to take place in the member state where the transport of the goods ends. In this case, they can opt for the OSS scheme which would simplify their VAT compliance obligations and pay all the VAT through the OSS Return instead of obtaining VAT Registration Numbers in the various jurisdictions where their customers are established.
In a world where more startups are entering into the e-commerce and dropshipping sectors, the above is expected to facilitate reporting and allow smaller businesses to access new markets.
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