Simplified way to declare VAT for foreign entrepreneurs (EU / NL)

This article was first published here by Vatko B.V., Netherlands.

As of July 1st 2021, a new VAT directive applies to entrepreneurs when involved in the business-to-consumer (B2C) sale of goods or services. The European Commission wants to modernize and simplify VAT with this new directive. It also aims to create a level playing field for entrepreneurs inside and outside the EU and to combat VAT fraud on small value packages.

The new VAT directive makes it possible to declare VAT in a simplified way making use of the so-called One Stop Shop (OSS). Whether you want to declare VAT in the EU country where you deliver your products or you owe VAT in another EU country.

The OSS portal, consists of 3 voluntary schemes:

  1. The 'Union scheme' for EU-based companies with at least 1 establishment in an EU country or companies that make use of an EU-warehouse. This scheme applies to intra-EU distance sales and services. You do not need a VAT registration in other EU countries.
  2. The 'Non-Union scheme' for non-EU companies without establishment in the EU. This scheme applies to services.
  3. The 'Import scheme' for distance sales of non-EU goods with a value of up to 150 Euros.

The Dutch Tax and Customs Administration arranges that the VAT declared via the OSS portal will end up in the right EU country.

As of July 1st 2021, the threshold amounts for intra-EU distance sales will expire per individual EU country. There will be 1 joint threshold amount of 10,000 Euros per calendar year for EU-based companies. This threshold applies to all intra-EU distance sales of goods together with the sale of digital services to consumers in the EU.

You can also indicate distance sales within the EU via the new portal. If you exceed the threshold amount of 10,000 Euros with both deliveries, digital services and goods, you can submit your declaration via the OSS portal. Ensuring a timely submission of your OSS application is important.

If you choose not to use the OSS portal you will have to register in each individual country to which you have supplied goods and file a local VAT declaration.
Interested in the possibilities of just one VAT declaration for several different EU countries? VATKO as your tax representative can inform you about all your options.

Information as at 1 July 2021

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