The European Commission has published proposals for significant modification of the VAT legislation for online sales of goods and services during the period 2018-2021. One of the envisaged legislative changes in the e-commerce sector is the extension of the mini One Stop Shop arrangement (MOSS) to supplies of goods under the distance selling rules in 2021.
The current mini One Stop Shop arrangement (MOSS)
The current mini One Stop Shop arrangement (hereafter: MOSS) was introduced in 2015. The MOSS allows companies that provide telecommunication, broadcasting and electronic services (such as video streaming or apps) to private consumers in multiple Member States to report and pay VAT in only one Member State (i.e. the Member State of registration) rather than in each Member State separately. In the Member State of registration the company should submit a VAT MOSS return. The Member State of registration distribute the VAT to the other Member States.
The current distance selling rules
E-commerce companies shipping products from one Member State to private consumers in other Members States are – under the current distance selling rules – required to charge VAT in the Member State where the transport of the good ends, assuming they exceed a certain turnover threshold. Therefore, e-commerce companies may be required to apply for a VAT number, to file VAT returns and pay VAT on its supplies in several Member States.
The Commission proposal: extension of the VAT MOSS
The extension of the MOSS to supplies made under the distance selling rules will greatly reduce this considerable administrative burden. The e-commerce companies would need to file only one VAT return for all their EU distance sales.
In case of questions about the opportunities and the consequences of the proposal of the European Commission for your company, our VAT-advisers are happy to help you. They can also assist you in preparing and submitting the VAT MOSS return with regard to the telecommunication, broadcasting and electronic services to private consumers in the EU.