Running an Ecommerce Store in Spain? Here’s What You Need to Know About MOSS (and OSS)
In this article, we explain the benefits of MOSS for eCommerce businesses in Spain, along with some important changes that will be happening in the summer of 2021.
What is MOSS?
The VAT Mini One-Stop-Shop (MOSS) is a scheme created in 2015 to account for VAT on certain cross-border business-to-consumer (B2C) sales within the EU. This applies to sales of telecommunications, television & radio broadcasting, and digital services.
Normally, these types of services would be taxed in the EU country where the customer is based. However, MOSS allows taxable persons (i.e. a business, sole trader, or professional) to pay VAT in one Member State of the EU instead of having to register and pay VAT in the numerous EU countries where each customer is based.
Registration for the program means that businesses only need to complete one VAT MOSS return quarterly online and make a single payment of the declared amount. Another benefit is that they can work in one language with the tax authorities in the country where they are registered for MOSS, despite sales being EU-wide.
2021 Changes to the Scheme
As of 1st July 2021, the MOSS will be extended to cover all B2C services that are sold to people in the EU. This new One-Stop-Shop (OSS), as it will be known from this point, will be extended and will apply to all distance sales (i.e. when an order is placed and paid for online, or by phone) of goods within the region. It will also apply to certain domestic transactions of goods that are facilitated by electronic interfaces (e.g. marketplaces and platforms) under certain conditions.
Furthermore, another new scheme will be introduced to enable the declaration and payment of VAT on distance sales of low-value goods that have been imported from outside the EU. This will be called the Import One-Stop-Shop (IOSS), which we’ll dive into further in this article.
Different Types of One-Stop-Shop
There are three different facets of the scheme, and their use depends on whether or not the business is established inside or outside of the European Union, and the country of origin for any goods being sold.
1. The Union MOSS/OSSThis type can be used by:
- Businesses established in an EU country that supply B2C services in other Member States and/or carry out distance sales of goods within this region
- Businesses that are not established in the EU but carry out distance sales of goods within this region
- Electronic interfaces that are established either inside or outside the EU which facilitate the supply of goods for distance sales within the EU, as well as certain domestic supplies of goods by deemed suppliers
A ‘deemed supplier’ is not the actual supplier of a product but is an entity that facilitates the supply from the underlying supplier (the actual producer of the goods) and is therefore considered as the supplier for VAT purposes.
2. The Non-Union MOSS/OSSThis type can be used by:
- All online sellers that are not established in the EU
- Businesses that supply B2C services but are not established in the EU
- In this case, the business must choose an EU country in which to designate a member state of identification and register for MOSS/OSS
3. The Import One-Stop-Shop (IOSS)
Another facet will be introduced from July 2021 called the Import One-Stop-Shop (IOSS). This scheme facilitates and simplifies the declaration and payment of VAT on imported goods for distance sellers and electronic interfaces.
Up until July 2021, no import VAT has been required on commercial goods purchased by EU customers that are under €22 in value. However, the change in July means that all goods valued under €150 that are sold to an EU buyer and imported from a third country will be subject to VAT.
Similar to the Non-Union MOSS/OSS, businesses must designate the EU country in which to register for the IOSS.
Who Can Register for VAT MOSS, OSS, and IOSS?
The schemes are optional but have obvious benefits, such as less administration and a reduction in the time and resources that would be required to deal with tax authorities in multiple countries working in multiple languages.
Certain criteria must be met for your business to take advantage of the simplified VAT rules for low annual turnovers, meaning you can choose to apply the VAT rules of your own EU country, instead of having to pay the individual rate for each country of sale. In this case, you would not need to register for the MOSS/OSS.To be eligible for this, you must meet the following criteria:
- Be established in only one EU country
- Supply B2C telecommunications, broadcasting, or electronic services (and from July 2021 intra-Community distance sales of goods) to customers that live in another EU country
- Not exceed a total value of sales above €10,000 (exclusive of VAT) in the current calendar year or the previous calendar year
When Will the Registration Become Effective?
Until 1st July 2021, the VAT Mini One-Stop-Shop conditions will be in place, meaning all eligible transactions occurring before then will be subject to this scheme. Since the IOSS will not have come into force, it will not apply.
It should be possible to register for the new VAT OSS and IOSS now, and then all eligible transactions will be subject to these new regulations following 1st July 2021.
How to Register
Every Member State in the EU has an online portal where you can register for the MOSS/OSS and IOSS. In Spain, you can do this on the website for Agencia Tributaria, the Spanish national tax agency. The contact details to register in the other Member States can be found here.
Do You Need Help?
If you need help registering your eCommerce business in Spain for MOSS, one of our specialist business lawyers at Strong Abogados is here to help.
Contact the team below with your enquiry and we’ll be happy to assist.