The Enhanced One Stop Shop (OSS) Initiative

Evolution from MOSS to OSS

Since its inception on January 1, 2015, the mini One Stop Shop (MOSS) has been a cornerstone in simplifying VAT procedures. However, recognizing the need for further enhancement, the MOSS has evolved into a comprehensive One Stop Shop (OSS) as of July 1, 2021. This transition brings about an expanded scope and additional simplifications, promising greater efficiency in cross-border VAT compliance.

Comprehensive Coverage: Three Special Schemes

The enlarged OSS introduces three special schemes: the non-Union scheme, the Union scheme, and the import scheme. Each scheme offers unique benefits and caters to specific VAT compliance needs, thereby providing taxable entities with a range of options to streamline their operations across Member States.

Understanding the Special Schemes

1. Non-Union Scheme Expansion:
   • The non-Union scheme now boasts an extended scope, allowing taxable entities to declare and settle VAT obligations in Member States where they lack establishment via a designated web portal. Participation in this scheme is optional, offering flexibility to entities operating within the EU and beyond.
2. Union Scheme Enhancement:
   • Building upon the existing Union scheme, the OSS introduces further simplifications and extends its coverage. Taxable entities within the EU can leverage this scheme to streamline VAT compliance across multiple Member States, consolidating their reporting obligations and minimizing administrative burdens.
3. Introduction of Import Scheme:
   • A notable addition to the OSS framework is the import scheme, tailored to address VAT compliance challenges associated with cross-border imports. This scheme facilitates seamless VAT declaration and payment for imported goods, ensuring compliance with VAT regulations across Member States.

Operational Framework: How OSS Works

1. Submission of OSS VAT Returns:
   • Registered entities electronically submit OSS VAT returns detailing applicable supplies and associated VAT liabilities. The frequency of submissions varies based on the chosen scheme, with quarterly submissions for the non-Union and Union schemes and monthly submissions for the import scheme.
2. Transmission of VAT Returns:
   • Upon submission, OSS VAT returns, along with paid VAT, are transmitted by the Member State of identification to the corresponding Member States of consumption via a secure communications network, ensuring seamless transfer of VAT-related data.

Key Considerations for Participation

1. Optional Nature of OSS Schemes:
   • Participation in OSS schemes remains optional for taxable entities. However, once opted in, the chosen scheme applies universally to all relevant supplies across Member States, streamlining VAT compliance and reducing administrative complexities.
2. Unified Approach to Scheme Adoption:
   • Entities opting for OSS schemes must adhere to the chosen scheme across all relevant jurisdictions, with partial adoption not permissible. Once committed, the scheme encompasses all consumer supplies across Member States, ensuring consistency in VAT compliance practices.

Registration Process: Non-Union and Union Schemes

1. Non-Union Scheme Registration:
   • Eligible entities can select any Member State as their Member State of identification, provided they meet specific criteria outlined for non-EU entities. The registration process involves allocation of a unique VAT identification number (EU ID) by the chosen Member State.
2. Union Scheme Registration:
   • Entities register within their Member State of identification, typically their place of business or permanent establishment. Italy serves as an example, where businesses establish their Member State of identification based on their presence within Italian territory.

OSS VAT Return Submission: Operational Details

• Businesses registered under OSS in Italy electronically submit quarterly VAT returns via the Italian Revenue Agency Online Services. Deadlines for submissions are fixed quarterly, ensuring timely compliance with VAT reporting requirements.

Conclusion

The evolution of MOSS into OSS marks a significant milestone in simplifying cross-border VAT compliance, offering taxable entities enhanced flexibility and efficiency in managing VAT obligations. By providing a comprehensive framework with expanded coverage and streamlined processes, the OSS initiative facilitates seamless VAT compliance across Member States, fostering economic growth and international trade.

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