The “One Stop Shop” (OSS) electronic system, known in official documents as the “special VAT regime”, aims to simplify e-commerce across the European Union. Heavily promoted by the European Commission over the last few years, the system allows companies to record and declare VAT in a single point for all EU countries it is implemented in.

The “One Stop Shop” system only targets online commerce and B2C (Business to Consumer) relationships, therefore it does not apply to business-to-business transactions. Announced by ANAF (National Agency for Fiscal Administration) as operational in July, the system is still optional for Romanian companies. However, System Innovation will launch a dedicated feature in SAP Business One that will simplify the process of filing OSS VAT returns.

What the One Stop Shop system stipulates

Until 1 July 2021, European companies selling goods and services cross-border to other EU Member States were required to register and pay VAT in the buyer’s country. This operation has always been expensive and complicated. The situation has changed considerably starting this summer when the OSS (One Stop Shop) measure came into force, stipulating that for values up to 10,000 euros the registration will be made in the seller’s country of origin, and above these thresholds companies will register in a single point. Through OSS, companies will declare and pay the value added tax due in any of the EU member states in a simple and centralized manner.

The One Stop Shop system offers the opportunity for e-commerce companies to stop registering and declaring the VAT in each of the EU Member States where they owe the VAT. Instead they will benefit from electronic services to fulfill these obligations through the Member State of Identification (ie the country where the company was registered for the special VAT regime).

According to ANAF, in the EU scheme, the VAT return is sent quarterly to the tax authorities in the country of origin and, through a secure network, they reach each state where the consumption is made. Subsequently, the VAT collected from taxpayers is transferred to the buyer’s country. Therefore, a Romanian company will be registered under the national OSS special VAT regime and will electronically submit OSS VAT returns detailing the deliveries made to customers in other European countries and the VAT due. The OSS VAT return does not replace traditional tax returns, which any VAT company submits following domestic tax regulations. One Stop Shop registration is currently optional, and companies can sell goods to consumers in Europe as before. However, if you opt for OSS registration, all European transactions will go through this system.

OSS in SAP BusinessOne

Since we have multiple e-commerce customers across Europe, we’ve developed a feature in SAP Business One that allows you to manage OSS VAT returns. It covers three main issues:

  • Management of VAT codes and country-specific rates
  • Completion of specific OSS VAT returns for sales of services to individuals and sales of goods to individuals
  • Completion of the D398 declaration with amounts in EUR or RON at the exchange rate of the European Central Bank, on the day of payment

We will thus simplify the activity of companies operating in multiple European countries so that financial departments get the declarations associated with the special VAT regime much easier. We are already testing this functionality in two large projects, and it will soon be available to all customers.

For more details on how to manage OSS VAT returns in the ERP system, contact us on any of our communication channels. Further information on the VAT package on e-commerce and the One Stop Shop system can be found at https://ec.europa.eu/taxation_customs/business/vat/vat-e-commerce/resources_en

 

 

 

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