As of July 1, 2021, the single window, OSS, will come into force, which will be mandatory for all companies that sell products through their e-commerce in Europe.
As you well know, as of July 1, 2021, the single window is implemented, which is a new law that requires VAT to be paid in the country where the merchandise is delivered, instead of where the company that makes the shipment is located.
Most important novelties of Law 37/ 1992 LIVA
- Article 73. A new limit (€10,000) is applicable to intra-community distance sales of goods and services provided electronically, telecommunications and radio, fusion, and television to be taxed at source.
- Article 34. The VAT exemption on imports of low-value goods is repealed.
This means that any company that “exports” more than €10,000 a year in operations to the European Union will have to pay taxes in each member country where it has sold part of that amount.
Previously there was a limit per country, for example, Germany was €100,000, Italy €35,000, France €35,000, all these limits are unified at €10,000 for the sum of all operations.
If you want to have more information about the VAT rates of the European Union, they have created a page from which we can consult it.
Therefore, if you exceed this amount as of July 1, you will have to pay taxes in the country of destination, exceptionally and in an extraordinary way until December 31, 2023, there is an adaptation period.
When should we apply the new VAT system?
The single window is mandatory for those companies that bill the end customer B2C more than €10,000 per year with the sum of all the countries of the European Union.
This regulation not only affects e-commerce companies, but it also affects digital platforms, messaging operators, advisors, and end consumers.
You can choose whether to apply the OSS single window or, on the contrary, you can choose to make the direct declaration in each destination MS.
Single Window Objectives
- Reduce cross-border fraud.
- Protect the competition.
- Reduce administrative burdens.
Single window obligations
- Have NIF.
- Declare electronically the date of start, modification, or cessation of the activity, form 035.
- Submit electronically a global quarterly VAT return, model 369.
- Enter the corresponding tax.
- Maintain a record of the operations included in this special regime.
- Issue and deliver the invoice.
Registration of operations in Prestashop
It is important that you review your online stores or ERP and check that you have them adapted. If you work with Prestashop you can use our Prestashop order exporter module, since you can configure it to export orders with the fields that indicate that you are required to have, especially VAT, origin, and destination.
The advantage of our module is that every time you need it you can export the orders with a date range, so you can do it by quarters to have the period of mandatory compliance.
How does the OSS single-window work?
Companies will have to apply the VAT rate of the Member State to which the goods are shipped or where the services are provided.
Using OSS, the business will need to register for VAT electronically in a single Member State for all distance sales of goods within the EU and for business-to-consumer services. All deliveries of goods will be declared and paid in a single quarterly electronic declaration.
Each EU Member State will have an online OSS portal where companies can register. However, this single registration will be valid for all sales to consumers in the other EU Member States.
