One Stop Shop for VAT Payments Across EU

The European Commission (EC) has taken the first step towards establishing a One Stop Shop (OSS) designed to simplify VAT compliance rules across member states of the European Union (EU).

Fr om 1 January 2015 the existing OSS system, which is limited to non-EU providers of electronic services, is being extended to all EU businesses and will include broadcasting and telecom services.

Fr om that date, EU providers of telecommunications, broadcasting and electronic services to consumers will be allowed to declare and pay the VAT in the member state where they are established rather than wh ere their customer belongs. In future, the OSS will be extended to other goods and services over time.

The scheme will allow suppliers to use a web portal in the member state in which they are identified to account for the VAT due in other member states on supplies of these services to private consumers. The supplier will make a single VAT declaration and payment which will then be allocated automatically to the different member states wh ere VAT is due.

Algirdas Šemeta, commissioner for taxation, customs, anti-fraud and audit said: ‘The complexity of the current EU VAT system is an obstacle to doing business in the Single Market. The One Stop Shop will greatly facilitate cross-border expansion of European start ups. This in turn will help to generate growth and jobs.’

The EC’s current announcement covers the scope of the scheme, reporting obligations, VAT returns, currency, payments, records and other aspects for which common rules are necessary. The Commission says a common approach is key to designing the IT systems which will provide the necessary exchange of information between tax authorities in the 27 Member States and to ensure the full implementation of the OSS by 2015.