The One-Stop Shop procedure can be viewed as an extension of the Mini One-Stop Shop procedure, covering a broader range of services. The new procedure is scheduled to take effect on 1 July 2021, allowing affected businesses to register with the BZSt (Federal Central Tax Office) until 30 June 2021.
Mini One-Stop Shop Procedure (1 January 2015)
The Mini One-Stop Shop procedure aims to provide businesses that become liable for tax within EU member states and whose services fall under the special regulation with a simplified means of filing VAT returns. The procedure covers businesses established domestically that have provided telecommunications services, broadcasting services, television services, or electronically supplied services. The specified services must be rendered to a private individual within the EU. It is particularly important to note that VAT is no longer levied in the state of the supplying business but in the member state of the private individual. If the respective business meets the stated requirements, it can use the Mini One-Stop Shop procedure and submit a special tax return covering the specified services to the BZSt. This eliminates the need for VAT registration in each individual member state, and the supplying business can pay the total VAT to the Federal Treasury.
Which Businesses Are Affected?
The new One-Stop Shop procedure expands the services covered by the procedure in order to make VAT reporting on goods sold to private individuals within the EU easier for more businesses in the future. To participate in the One-Stop Shop procedure, businesses must meet the following requirements:
- Businesses must have their registered office in Germany
- Services to private individuals within the EU
or
- intra-Community distance sales of goods (supplier is only indirectly involved)
or
- providing an electronic marketplace enabling the supply of goods between a business and a private individual within the EU (e.g. Amazon, eBay, etc.)
or
- Businesses not established in the EU but maintaining a domestic facility (e.g. a warehouse) for dispatching goods.
What Advantages Does the OSS Offer?
The Mini One-Stop Shop procedure changed how VAT is levied on supplies of goods to EU member states. The same principles can be applied to the new OSS procedure. Previously, supplies had to be taxed in the prescribed member state of the supplying business; with the change, they are taxed in the state of the purchaser. This increased the administrative burden for businesses, as they had to register for VAT in every member state in which they performed the specified services. The OSS now allows affected businesses to pay the VAT owed centrally to the Federal Treasury, thereby avoiding this administrative burden.
Registration for the One-Stop Shop Procedure:
In general, businesses that meet the special requirements can register on the BZSt website using their VAT identification number. It is important to note that businesses already participating in the Mini One-Stop Shop procedure are automatically registered for the new One-Stop Shop procedure.
Filing the Tax Return
Once registration is complete, the tax return for the relevant services can be submitted via the BZSt online portal. Businesses, as well as Steuerberater (German Certified Tax Advisor), can log in to the BZSt portal using their ELSTER signature. The tax return must be filed on a quarterly basis, with the precise deadlines expected to be:
- Q1 by 30 April
- Q2 by 31 July
- Q3 by 31 October
- Q4 by 31 January of the following year.
The obligation to file a tax return under the procedure also applies to businesses that have not recorded any of the specified services within the calendar quarter; in such cases, a nil return must be filed. The VAT owed should be paid to the Federal Treasury within the stated deadlines.
Exemption for Certain Businesses
It should be noted that certain businesses are exempt from the One-Stop Shop procedure under specific conditions. These businesses must then invoice the recipients of their services with domestic VAT and remit it to the competent tax office. The following requirements must be met:
- The supplying business is established in only one EU member state
- The revenues were generated either through intra-Community distance sales or in the area of telecommunications services, broadcasting services, television services, or electronically supplied services.
- The net total amount of the specified services does not exceed a threshold of EUR 10,000 in the current and previous calendar year.
Frequently asked questions
Frequently asked questions
What is the One-Stop-Shop procedure (OSS)?
The OSS is a procedure introduced on 1 July 2021 for the simplified VAT declaration of companies supplying services to private individuals in other EU Member States. It extends the previous Mini One-Stop-Shop procedure to include additional services, in particular intra-Community distance sales. Affected companies can centrally remit the VAT owed in other EU countries to the German Federal Treasury via the Federal Central Tax Office (BZSt).
Which businesses can participate in the OSS procedure?
Businesses established in Germany that provide services to private individuals in the EU or carry out intra-Community distance sales are eligible to participate. Operators of electronic marketplaces (e.g. Amazon, eBay) through which supplies between businesses and private individuals in the EU are processed can also use the procedure. Likewise included are non-EU businesses that maintain a domestic facility such as a warehouse for dispatching goods.
What are the advantages of the OSS procedure?
The key advantage is that businesses no longer need to register for VAT in every individual EU member state where they supply services to private customers. Instead, they can pay the VAT owed centrally to the Bundeskasse (German Federal Treasury). This significantly reduces administrative effort, as taxation still takes place in the country of destination, but is processed in a consolidated manner through the BZSt (German Federal Central Tax Office).
What deadlines apply to the tax return under the OSS procedure?
The tax return must be filed quarterly via the BZSt online portal. The deadlines are: 30 April for Q1, 31 July for Q2, 31 October for Q3, and 31 January of the following year for Q4. A nil return is mandatory even if no relevant turnover was generated in the quarter.
When is a business exempt from the OSS procedure (de minimis threshold)?
Exempt are businesses established in only one EU member state whose net total of intra-Community distance sales and telecommunications, broadcasting, television and electronic services does not exceed €10,000 in either the current or the preceding calendar year. In this case, invoices must be issued with domestic VAT and reported to the competent tax office.
How do I register for the OSS procedure?
Registration is completed online via the Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt) using your VAT identification number. Businesses already enrolled in the Mini-One-Stop-Shop procedure are transferred to the OSS procedure automatically. Subsequent log-in to the BZSt online portal is possible for businesses or their Steuerberater (German Certified Tax Advisor) via Elster signature.