On 1 July 2021, the EU introduced an optional One Stop Shop VAT scheme for the sale of digital services which attract destination VAT. Instead of having to register and pay VAT in each country you sell to, you can choose to report and pay EU VAT on digital services through a single return using the One Stop Shop. If you use the One Stop Shop you will need to charge destination VAT at point of sale. For a list of services which attract destination VAT visit the European Commission website (opens in new tab) >. The One Stop Shop (OSS) is an optional VAT scheme. It is only for the sale of digital services that attract destination VAT (OSS services) to EU customers who are not VAT registered (also known as EU consumers). Instead of having to register and pay VAT in each country you sell to, you can choose to report and pay EU VAT on OSS Services through a single return using the OSS. If you use OSS you will need to charge destination VAT at point of sale. Instead of charging VAT at the UK rate (or home rate), you will charge VAT at the rate where your customer lives. For a list of services which attract destination VAT visit the European Commission website >. Businesses in Great Britain You can register for the Non-Union OSS in an EU member state, or you may need to have an intermediary register on your behalf. Once registered you can report all relevant EU VAT through a single return and make a single payment to the member state you register with. Businesses in Northern Ireland You can register for the OSS in an EU member state. HMRC also plan to provide an OSS portal for businesses trading with the EU under the Northern Ireland Protocol. HMRC guidance on One Stop Shop schemes >. Once registered you can report all relevant EU VAT through a single return and make a single payment to the member state you register with. Before you start If you need to charge destination VAT check that you have added: - Go to Sales, and select New Invoice.
- In the Customer field, select your EU customer from the list, or type the customer name. If the customer is not a saved contact, select Add a customer to create a record for them.
- On the first invoice line, select a service from the list, or start typing its name to find it. If the service is not a saved item, select Create item and apply OSS Services to create a record for it.
- In EU Goods/Services select Services (standalone) to apply destination VAT rules.
Repeat steps 3 and 4 on a new line for as many items as you need to add to your invoice.
 TIP: An invoice cannot contain a mix of services with home and destination VAT. If you need to invoice a service that has home VAT, you must create another invoice. - Select Save.
The VAT return Sales of services to all overseas businesses and consumers are reported: - Without destination VAT - Standard Services have UK VAT rates reported in Box 1 - VAT due in this period on sales and other outputs and Box 6 - total value of sales and all other outputs excluding any VAT
- With Destination VAT - OSS services are destination VAT with the Net reported in Box 6 - total value of sales and all other outputs excluding any VAT. The VAT element on destination VAT sales is excluded from your VAT return. You need to report this on your OSS VAT return through the OSS system
Destination VAT report The OSS Sales Analysis in Reporting shows all sales where destination VAT has been charged. This will help you to complete your OSS VAT return through the OSS system. - Go to Sales, and select New Invoice.
- In the Customer field, select your EU customer from the list, or type the customer’s name. If the customer is not a saved contact, select Add a customer to create a record for them.
- On the first invoice line, select a service from the list. If the service is not a saved item, enter a description for the item or select Create item to create a record for it.
- In EU Goods/Services select Services (standalone) for each invoice line. Select the VAT rate that you would apply if the sales was made in the UK.
Repeat on a new line for as many items as you need to add to your invoice.
TIP: An invoice cannot contain a mix of services with home and destination VAT. If you need to invoice a service that has destination VAT, you must create another invoice. - Select Save.
The VAT return Sales of services to all overseas businesses and consumers are reported in Box 1 - VAT due in this period on sales and other outputs and Box 6 - total value of sales and all other outputs excluding any VAT. The VAT on sales is charged at the UK rate (home VAT). If your business is based in Northern Ireland isn't using the OSS and is selling services to an EU consumer, this will impact Box 1 - VAT due in this period on sales and other outputs and Box 6 - total value of sales and all other outputs excluding any VAT. [BCB:299:UKI - Personal content block - Dane:ECB][BCB:300:UKI - Search override - Start UK:ECB] [BCB:276:UKI - hide back button:ECB] |