VAT OSS – VAT settlement rules as part of the e-commerce package

In order to reach the largest possible group of buyers, Polish entrepreneurs use various types of platforms and online stores, such as Allegro or Amazon. Thanks to this, they sell their goods and services on foreign markets. The sale of electronic goods or services to private individuals from another EU country carries a number of tax obligations.

From July 1, 2021, along with the so-called With the e-commerce VAT package, regulations simplifying these settlements will enter into force. It will become, inter alia, by implementing the VAT OSS procedure. Let’s check what this procedure is, when it is worth using it, what simplifications are associated with it and how to start it!

What is VAT OSS?

VAT OSS (One Stop Shop) is a VAT settlement procedure that will replace the current one – VAT MOSS (Mini One Stop Shop). From July 1, 2021, the MOSS VAT procedure, which concerned the sale of electronic, broadcasting and telecommunications services to private persons from another EU country, will be extended to mail order sales of goods for these entities, creating the VAT OSS.

When is it worth using VAT OSS?

Registration for the VAT OSS is completely voluntary and depends on the seller’s decision. When making mail order sales of goods or providing services to private individuals from another EU country, they must respect the sales limit.

Until the sales limit is exceeded, Polish entrepreneurs tax the transactions concluded in the same way as domestic sales – using the Polish VAT rate. After exceeding the sales limit, they are obliged to tax the transaction with the VAT rate applicable to the buyer’s country.

Until July 1, 2021, after exceeding the mail order sales limit in a given EU country, the Polish taxpayer had no option – he had to register for VAT in the country where the limit was exceeded. It was connected not only with the registration obligation, but also registration and reporting, i.e. VAT settlement in another EU country. This, in turn, made it necessary to use the services of accounting offices that had knowledge of tax regulations in other countries.

The VAT OSS procedure simplifies the settlement process, because after exceeding the limit of mail order sales in the EU, the seller can still settle VAT in the Polish tax office.

See more: