EU ViDA Single VAT registration Jul 2028 underway

Preparations begin for July 2028 Extension of OSS return for cross-border movement of own goods: B2C e-commerce; and B2B call-off stock

Harmonisation of B2B reverse charge. But extension of marketplace ‘deemed supplier’ to EU sellers proposal now dropped

The full EU VAT in the Digital Age (ViDA) was agreed by EU member states on 5th November 2024 at the meeting of EU Finance Ministers. The European Commission has already started planning and preparations for the implementation. There was a 25-27 June Fiscalis meeting to consider:

• defining the (IT) impacts for the implementation of these SVR; and
• revision of the implementing acts, explanatory notes and guides.

The July 2028 extension of the existing One-Stop Shop OSS VAT return to further B2C and B2B stock movements is at the core of the ViDA.  The other two pillars are: Platform Economy January 2030 (mandatory July 2028-30); and Digital Reporting Requirements delayed to 2030-35.

January 2027

• Supplies of natural gas, heating and cooling energy cross-border are deemed distance sales as so may be reported in OSS.
• The EC will adopt special measures to prevent VAT fraud around IOSS identification numbers. Including linking an IOSS ID to the import consignment number.
• The rules on the calculation of €10,000 intra-community distance sales of goods and TBE (telecoms; broadcast; electronic) services may only include supplies from the country of establishment. But with OSS option for the place of supply to be determined in accordance with Article 33 (Member State of final destination)
• Harmonise minor differences on timing of chargeable events in the Union and non-Union schemes.
• Clarify that the non-Union scheme covers B2C services provided in the EU to any customer and not only to EU established customers

July 2028: Extension of OSS for B2C and B2C own stocks

• The extension of the OSS return to e-commerce and own stock movements across EU borders. This will enable hundreds of thousands of e-commerce sellers and B2B businesses to significantly cut their foreign VAT registrations and associated costs.
• For non-EU established businesses, the member state of identification for OSS registration will be the country of dispatch of goods.
• OSS will be extended to: supply and install; goods sold aboard ships, trains and aircraft, and energy through systems. This will also include a range of zero-rated supplies and some exempt suppliers (e.g. diplomatic or consular).
• The proposal to make mandatory the use of the Import One-Stop Shop IOSS single return for B2C imported sales has been dropped from ViDA. But there are a number of other IOSS changes on this date:
  • Additional information to be provided prior to importation between marketplaces and e-commerce merchants and the customs officials.
  • Marketplaces to maintain list of underlying suppliers (for IOSS and OSS)
  • Report in the monthly IOSS the final country of destination for the goods.
  • Provide Customs with IOSS registration information.
• Note: OSS and IOSS may not be applied with the 2025 SME scheme for VAT registration thresholds.
• Call-off stock withdrawal as traders will be able to use OSS. No new call off stock arrangements may be used from 1 July 2027. Goods already transferred prior to this date, and still not released, conditions will cease to apply on 30 June 2028.

• The proposed harmonisation of the non-resident B2B domestic reverse charge (Article 194) rules will go ahead, but it has been modified to give member states some flexibility. Member states will be required ‘shall’ apply the reverse charge when a non-resident supplier supplies a customer that is VAT registered in the country. But Member States are given flexibility if they wish to adopt different rules to apply the reverse charge. For instance, applying the reverse charge only when the customer is established in the Member State that the VAT is due. Margin scheme supplies and works of art are excluded. Such transactions must be disclosed on the ESL.

Original proposal for Marketplaces deemed supplier extending to EU sellers now dropped

• For EU sellers, where cross-border e-commerce sales are facilitated by a marketplace, the VAT on the local domestic sale to the consumer was to flip to the marketplace as the deemed supplier. The exception is sales in the country where the seller is resident.
• This has now been put aside for the future.
• The disadvantage of this decision is that it would favour sellers using marketplaces and penalise own website sales which would still be responsible for the domestic VAT reporting.

OSS Special scheme for movement of own goods

• Plus, under OSS for other own stock movements there will be a special scheme within OSS. The intra-Community acquisition of goods in the Member State where the goods are dispatched or transported to, is exempt. This must be supported by detailed records. The existing call-off stock provisions of the EU VAT Directive will therefore be withdrawn from 1 July 2028 for new movements as no longer required with OSS. Existing stocks already held in call-off stock will still follow the current rules until 30 June 2029.
• There will be ring fence exceptions with right of deduction e.g. cars; capital goods; and non-saleable company assets.
• In addition, traditional cross-border services where the seller is not resident will be added to OSS option, which includes: Installation and assemble of goods; goods made on board means of transport; goods supplied at exhibition or trade fairs; goods at weekly markets; and local hire of transport.
• Purely B2B transactions are not included for the time being in this extension because of the complexities of right of VAT deduction and fraud risks

Extension of OSS to other cross-border services when the seller is non resident

Aside from transfer of own goods, a range of B2C cross-border transactions will also potential now be included:

• Installation and assemble of goods
• Goods made on board means of transport
• Goods supplied at exhibition or trade fairs
• Goods at weekly markets
• Gas, electricity and heating
• B2B supplies of services where there is a ‘may’ option on using the reverse charge
• Immovable property
• Passenger transport services
• Admission to cultural, sporting, exhibition etc events
• Restaurant and catering
• Short-term transport hire

VAT Filer reporting for OSS extension

VAT Calc’s global returns reporting app, ‘VAT Filer’, has been developed with the EU’s VAT in the Digital Age reforms in full focus, the extension of OSS for own stocks and other supplies. And since VAT Filer is built on the same single platform as our VAT Calculator tax engine product, there is full reconciliation on VAT return reporting.

EU VAT in the Digital Age reforms