Guidance on the EU’s new VAT option

Tax leaders hold Praxity workshop on changes to EU VAT rules

Experts within the Alliance have been working together to provide guidance on the EU’s new One Stop Shop (OSS) single VAT return.

In a leading example of Praxity’s collaborative approach, Birgit Juergensmann and Heather Weber, Chair and Co-Chair of Praxity’s Global Indirect Tax & VAT Group, organized a joint workshop on 10 June to inform firms and their clients about the new VAT option in Europe.

The OSS replaces the MOSS (Mini One Stop Shop) VAT option which was introduced in 2015 to provide a simplified system to declare and pay VAT on business-to-consumer (B2C) supplies of telecoms, broadcasting and electronic (TBE) services in the EU.

The new, enlarged option – introduced on 1 July 2021 – covers a wider range of supplies and is designed to provide further simplification although, as with any change to a taxation system, there is uncertainty among businesses over how the new rules will impact them, especially those businesses outside the EU.

Independent intermediary jointly liable

“The biggest concern is among businesses located in third countries (outside the EU) that need to appoint an independent intermediary who is jointly liable for the payment of VAT to the relevant tax authority. At Mazars, we have had a lot of questions in this regard,” Birgit explained. The workshop was originally intended as a guide to a much wider package of measures introduced by the EU to modernise VAT for cross-border trade. However, the agenda was changed to focus solely on OSS to help firms understand the new option prior to its introduction on 1 July. The next step in terms of OSS compliance, Birgit said, was to help businesses fully understand the rules and implement the necessary changes. “While guidance has been published in different countries, it is not always precise or correct. There are a lot of inconsistencies.” Commenting on the success of the workshop, she added: “From our point of view it was very well received by those who attended although Heather and I would have hoped to have reached more firms and clients; these changes impact both large and small businesses. ”Further collaborative sessions are planned within the Alliance to keep firms and their clients up to date on new indirect tax developments in terms of European VAT, including supply chain and customs optimisation, as well as opportunities and pitfalls in the continuously changing VAT and indirect tax landscape."

On behalf of Praxity by Ian Lavis thewritingroom