One-Stop-Shop / Change of VAT regulations in the EU from 2021 (OSS)

On 01 July 2021, the elimination of all delivery thresholds for all member states of the EU countries is planned. The individual delivery thresholds will be replaced by a delivery threshold of EUR 10,000 for all deliveries to other EU countries. This actually means that the delivery threshold in the future will be 10,000 EUR for exports to the EU and not for each EU country individually.

This automatically creates a tax liability in the country of supply if exports to the EU exceed the aforementioned limit.

Dealers who only export out of Germany will be able to report their taxes centrally in Germany (or in their respective home country) as of July 01, 2021, and will no longer have to register for each individual country.

The system is intended to simplify VAT in the EU but is already outdated with its introduction. Many online retailers will not be able to benefit from the scheme, particularly because of the restrictions on fulfillment. This is because registration will still be required in each country with a fulfillment center.

This registration will be particularly necessary due to domestic shipments in countries with fulfillment centers, an intra-community shipment, or Amazon commingling transactions. Likewise, registration will possibly be necessary insofar as goods subject to input tax were purchased in other EU countries, because a refund can only be claimed in the respective country of origin.

It is also unclear to what extent the rule will be able to be combined with national registrations.

Companies wishing to take advantage of the scheme will be able to submit a registration to the Federal Central Tax Office from April 1, 2021. The registration must have been completed by June 30, 2021 at the latest in order to be able to use it from July 01, 2021.

Despite everything, however, Germany (or even other EU countries) may not be able to implement the relevant regulations on time by 01 July 2021. In view of the current overall political situation, it can be assumed – despite the announcement of the EU Commission to disadvantage such countries – that the deadline will be postponed in the short term.