It is estimated that online sales in EU are worth €550 billion a year – €96 billion of which is cross-border.

Since 2015, a simplified Mini One Stop Shop (MOSS) system is in place to declare and pay VAT on business-to-consumer (B2C) supplies of telecommunications, broadcasting and electronic (TBE) services in the EU. Following 2021, scope of MOSS will be extended turning it into a One Stop Shop (OSS), therefore, requirement to declare and pay VAT on to B2C supplies of services will be extended not only to TBE services but also to all other services, Intra-EU distance sales of goods, certain domestic supplies of goods facilitated by electronic interfaces and to distance sales of goods imported from third countries and third territories in consignments of an intrinsic value of maximum EUR 150:

• The non-Union scheme for supplies of TBE services by taxable persons not established in the EU will be extended to all types of cross-border services to final consumers in the EU;
• The Union scheme for intra-EU supplies of TBE services will be extended to all types of B2C services as well as to intra-EU distance sales of goods and certain domestic supplies facilitated by electronic interfaces.
• An import scheme will be created covering distance sales of goods imported from third countries or territories to customers in the EU up to a value of EUR 150. Unlike today, when the import scheme is used, the seller will charge and collect the VAT at the point of sale to EU customers and declare and pay that VAT globally to the Member State of identification in the OSS.

What is more, businesses operating electronic interfaces such as marketplaces or platforms will, in certain situations, be deemed for VAT purposes to be the supplier of goods sold to customers in the EU by companies using the marketplace or platform. Consequently, they will have to collect and pay the VAT on these sales.

EU is estimating that the new rules will raise €7 billion in VAT revenues for Member States from its introduction of OSS.

According to EU, the main features of OSS are:

• Modern and simpler VAT rules for businesses selling goods and services online cross-border within and to the EU;
• Making it easier for online businesses to access other markets;
• Ensuring EU businesses are on an equal VAT footing with non-EU competitors;
• Allowing companies to pay VAT on their sales in the entire EU in a single quarterly electronic return, therefore, reducing costs of VAT compliance by €2.3 billion a year.