According to Regulation 2020/194 12 February 2020, the scope of the One Stop Shop (OSS) will be extended to dispatch sales as of 1 July 2021. Currently the OSS applies only to telecommunications, radio and television broadcasting services and services provided by electronic means to consumers residing in another EU Member State where the entity does not have an establishment and where it is not registered to pay VAT.
Currently, businesses engaged in dispatch sales (sales realised through dematerialised means like internet, phone, tele-purchase) to consumer clients (B2C) can account for VAT in their country of domicile until they reach the threshold set by each member state where customers are resident.
Consequently, businesses engaged in dispatch sales have to register in each member state when the respective threshold is reached. This threshold varies among the member states (ie EUR €25,000 to EUR €100,000) and taxpayers have to monitor closely the sales value to each. Over time, member states have reduced their threshold to EUR €35,000 with certain exceptions (including Luxembourg and Germany).
As of 1 July 2021, the threshold will be set at EUR €10,000 for all member states. However, taxpayers should then be able to file one VAT return through the OSS without having to register in each member state and filing separate VAT returns. The extension of the OSS concept should lead to lower compliance costs and facilitate the VAT compliance process.