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Penalties for late submission of OSS declarations

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Date18 Jan 2023
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One-Stop-Shop (OSS) is so far the best solution to simplify VAT compliance in cross-border e-commerce. It turns out that this so-called special tax procedure, as defined in European Directive 2017/2455, is a privilege. Privileges have to be earned and you need to be careful not to lose them, especially in the case of late filing of returns.

Let us remind, what is the OSS?

The “One-Stop-Shop” scheme is a development of the “Mini-One-Stop-Shop”. scheme. It is a special VAT programme aimed at EU-based traders and other eligible entities.

The system makes it possible to report all dispatch transactions to final individual customers made within the European Union on a single consolidated VAT return, filed in the country where the trader is established. Accordingly, traders who are involved in online sales to private individuals, will be able to account for tax using the new method once the statutory threshold of €10,000 is exceeded.

We have provided more information on this topic at the link:
Information about One Stop Shop (OSS) – amavat®.

What happens if the OSS procedure is not followed?

The tax authority may exclude an entrepreneur from this procedure when it consistently fails to meet the obligations and deadlines associated with the OSS.

Persistent non-compliance with the rules on the EU procedure occurs, among other things, when a taxpayer has not filed a VAT return for the three immediately following calendar quarters.

How long does the blockade last?

In the case of exclusion from the EU procedure ex officio, a “quarantine” period will be applied to the taxpayer, covering the eight quarters following the tax period in which the taxpayer was deregistered. During this period, the taxpayer will not be able to use the special procedure.

Eight calendar quarters is two years. Two years, during which you must report each remote sale locally to each tax office, of course, after first registering for VAT in each country, once the sales threshold is exceeded. Even in the case of a single supply, you must settle with the local tax office in that country for two years.

This causes additional costs, administrative effort and thus constitutes a serious obstacle to further internationalization of the company.

Therefore, in 2023, the timeliness of OSS declarations must be very carefully observed – otherwise you risk significant additional costs for a period of two years.


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