The new OSS and IOSS special VAT regimes to apply from 1 July 2021
As of 1 July 2021, the amendments to the VAT Directive 2006/112/EC, introduced with the aim of simplifying the VAT obligations of taxable persons engaged in cross-border trade with end consumers, are in force in Italy.
In particular, with the adoption of the OSS (One Stop Shop) and IOSS (Import One Stop Shop) schemes, Italy implements the so-called “VAT e-commerce package“, which represents one of the most important pillars of the global VAT reform represented by the European Commission in the 2016 VAT action plan.
The OSS/IOSS schemes introduce a centralised and digital European VAT clearance system that broadens the scope of the old MOSS scheme, which only covered electronic, telecommunication and broadcasting (ETT) services.
- the OSS scheme is introduced for distance sales of goods dispatched by suppliers established in an EU Member State to final consumers in another EU Member State (including through the use of their own e-commerce channel) and for the supply of services to final consumers subject to VAT in the Member State of consumption;
- the IOSS scheme is introduced for sales to final consumers of goods imported from third countries with consignments of a value not exceeding EUR 150.
Sales made by so-called marketplaces are excluded, unless these marketplaces merely act as intermediaries and only facilitate sales by putting the seller and the final purchaser in contact and allowing the supply to take place directly between these two parties.
It should be noted that the two regimes mentioned above are optional, but allow traders significant advantages in terms of VAT clearance procedures. Until now, in fact, traders selling goods to private consumers residing in another EU country above the limit of 35,000 euros were required to pay VAT in the country of destination, identifying themselves directly or through a tax representative.
Now, on the other hand, once the threshold is exceeded (which has been reduced to Euro 10,000 on the total transactions, net of VAT), the subject can adhere to the new optional OSS regime, which allows to apply the tax of the destination State without opening its own VAT position in that State, but interfacing directly with its local tax authorities.
The advantages for Italian companies selling goods and providing services to final consumers throughout the EU via electronic interfaces are obvious, as they are allowed to:
- have an Italian VAT number only, for all eligible supplies of goods and services to purchasers located in all the other 26 Member States;
- declare VAT in Italy, through a single electronic declaration and make a single payment of the VAT due on all supplies of goods and services;
- respect the VAT compliance in relation with the Italian Tax Authority only, even if sales take place throughout the EU.
A further novelty is the introduction of the IOSS scheme, which may be used, on an optional basis, to pay VAT on distance sales of low-value goods imported from third countries (goods with a nominal value under than €150).
From 1 July 2021, VAT will be payable on all commercial goods imported into the EU regardless of their value, and a special scheme for distance sales of goods imported from third territories or countries into the EU has been created to facilitate the declaration and payment of VAT. In particular, this scheme allows suppliers to declare and pay this VAT collected on the price paid by the purchaser via the one-stop shop for imports.
In order to make the new regimes operational, the Italian Tax Authority has made available on its institutional website the telematic functionalities allowing to carry out the online registration, which is very simple to use.
It is necessary go to the web site www.agenziaentrate.gov.it and access the online services, then click on the ‘Mini One Stop Shop VAT Scheme’ section (name to be updated in the Oss), where it is possible to register. However, if the taxable person starts making supplies covered by the scheme before registration, it is possible to use it from the date of the first supply, by notifying the Member State of identification by the tenth day of the month following the transaction that activities started covered by the scheme.
Finally, it should be noted that the Operational Centre of Pescara has been identified as the competent office to carry out the activities related to the special regimes for e-commerce activities.
LDP remains at your disposal for any further clarifications.