About our services for e-commerce
In this day and age, one of the most promising ways of developing business is a foreign market expansion. This can be achieved by expanding a scope of services through cross-border distance selling, currently being one of the most popular ways of selling goods – popular, yet subject to a number of tax regulations. It should not however deter anyone who is willing to take advantage of trading across Europe – ensuring a proper procedural compliance is sufficient to avoid criminal liability for breaching the law.
VAT OSS
Sellers who want to take advantage of intra-EU distance selling through e-commerce must be VAT payers. They declare to deliver goods within European Union to private persons or companies not registered for VAT. It’s important to remember that the VAT settlement (in the country of origin or the recipient’s country) and the tax-free allowance are subject to, among others, the distance selling threshold, which was lowered to the range of EUR 10,000 as of July 1st, 2021. It is a limit to the distance selling for all European Union countries altogether.
Once this limit is reached, a tax-payer who is operating in a distance selling model is obliged to register in the VAT OSS system in the country of origing. By registering in the system and filing quarterly VAT declarations, the tax-payer benefits from a simplified process – the tax due from transactions can now be settled with the home country’s tax office, which then transfers it to the tax authorities in the EU country of an end-consumer.
When it comes to VAT OSS it is worth to remember that after reaching a distance selling threshold in the EU, a tax-payer is obliged to issue sales documents with local VAT rates of the consumer’s home country. This means that the VAT number of the taxpayer and the VAT rate of another EU country will appear on the final invoice.