One Stop Shop (OSS) for B2C EU Sales

Requirement

As of the 2021 EU e-commerce package from July 2021, B2C sellers dispatching their goods or providing electronic services from a single EU country must use the VAT rate of the receiving EU country.

The overall target is to reduce VAT fraud within the EU, to simplify the VAT reporting to one single point OSS (One Stop Shop), and to strengthen the cooperation and data exchange between the EU member states.

Companies can either register in the receiving country for VAT or apply on the electronic OSS portal in one single EU member state.

Exemptions are made for small business with revenues from all EU countries below 10.000 EUR for the current and the year before. In this case, the local VAT rate of the sending country can be applied. However, the OSS rule can be applied independently of the sales amount having reached the 10.000 EUR limit.

M3 solution

The OSS rule can be set per receiving country code and start date. In case the OSS rule should not be used any longer, set a record per country and start date and deactivate the rule. This is only needed if an active OSS record was previously defined.

If no OSS rule is set, the VAT rate is based on the "Base country code" or division.

An VAT code exemption rule can be set for a specific VAT code indicating the use of the OSS rule.

This specific VAT code can be used to set the VAT rate per receiving country code and can be used for VAT reporting.

With a specific VAT report template, a VAT report can be created using the ordinary VAT reporting function.

Note: The OSS reporting on local portals usually requires only one record per country and VAT rate (standard and reduced) showing the base and VAT amount.

Configuration guidelines


Program ID	Program name	Description or comment
TXS031	VAT Rate Rule. Open	When the OSS rule for B2C sales is to be applied for an EU country, specify the EU country code the rule should be applied for. Set flag 'VAT rate rule' = '1'.
TXS020	VAT Exception. Open	Define specific VAT codes (full and reduced VAT) for OSS revenues for 'TEXT/VAT cd' = '2-VAT code – external sales'. Prerequisites: Set up a rule for OSS revenues to replace the ordinary VAT codes of the items with the VAT codes applicable for the OSS rule. In 'Available Object Ctrl Parameters. Open' (CMS016) or 'Generic Object Control Table. Open' (CMS017) for (TXS020), define Start value 1 = the Division ID and Start value 2 = 2. The possible objects can be the the 'Base country' (&BSCD), the 'From/to country code' (&FTCO) and 'VAT reg. no exist' (&VRNE) with value set to '0', and 'VAT code' (&VTCD) with the value set to the ordinary VAT code to distinguish between full and reduced VAT rates.
CRS030 CRS031	VAT Code. Open VAT Rate. Open	Define a specific VAT code for full and reduced OSS sales. Define the VAT rates to be applied per receiving country for the VAT codes to be used for the OSS rule.
TXS005	VAT Report Template. Open	Set up a VAT report template for the OSS revenue reporting. A user-defined VAT report is recommended for reconciliation purposes. Set up a separate reporting line per receiving country code defined for OSS reporting. The OSS VAT code defined in (TXS020) should be selected Field 'From/To country' should be defined Checkbox 'VAT regno exist' should be cleared Field 'VAT rate 1' can be optionally defined (to be able to distinguish between full and reduced VAT rate) Set up a basic report with, at a minimum, the columns 'Base country code', 'From/to country code', 'VAT code', 'VAT rate', 'Base amount', and 'VAT amount'. The user-defined report should be sorted by base Country code, From/to country code, and VAT code. For reconciliation purposes, an additional, more detailed, report can be useful. This can show additional details, such as 'Buyer's VAT registration number', 'Customer number and name', 'Invoice year and invoice number', 'Voucher number', 'Base country code', 'From/to country code', 'VAT code', 'VAT rate', 'Base amount', and 'VAT amount'. The user-defined report should be sorted by Base country code, From/to country code, Buyer's VAT registration number, Customer number, Invoice year, Invoice number, and VAT code. Use 'VAT Run. Open' (TXS100) to create the OSS summary and reconciliation report.