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New Guidance on Reporting Northern Ireland to EU B2C Sales Using the OSS

The UK’s HM Revenue and Customs (HMRC) has issued updated guidance on how businesses based in Northern Ireland or elsewhere can register and report their B2C sales of goods to the European Union (EU) through the EU’s One-Stop Shop (OSS).

This new guidance is particularly significant for businesses navigating the post-Brexit landscape and the specific VAT obligations that apply to Northern Ireland.

 

Northern Ireland’s unique VAT status

 

Under the Northern Ireland Protocol, which later evolved into the Windsor Framework, Northern Ireland remains part of the EU’s single market for goods.

This arrangement means that businesses in Northern Ireland must adhere to EU VAT regulations when selling goods to consumers in the EU.

The critical aspect of this is the VAT treatment of B2C sales from Northern Ireland to EU countries.

When a business sells goods from Northern Ireland to consumers in the EU and exceeds the distance selling threshold of £8,818 (€10,000), it must account for VAT in the EU country where the goods are delivered.

In practice, this could require businesses to register for VAT in multiple EU member states, which can be a complex and burdensome process.

To simplify this, businesses have the option to use the VAT One-Stop Shop (OSS) Union scheme.

This scheme allows companies to manage VAT on all their distance sales of goods from Northern Ireland to the EU through a single registration and reporting system.

 

HMRC’s updated OSS guidance

 

HMRC’s new guidance provides detailed instructions on several key areas related to the OSS:

  1. Who can register: The guidance outlines the criteria businesses must meet to be eligible for OSS registration. This includes businesses based in Northern Ireland that sell goods to consumers in the EU.

 

  1. How to register: The guidance details the step-by-step process for registering for the OSS through HMRC. This process allows businesses to access the OSS portal and streamline their VAT reporting.

 

  1. Post-registration actions: After registration, businesses need to follow specific procedures to ensure they remain compliant. This includes submitting VAT returns and making payments through the OSS portal.

 

OSS options for non-EU sellers

 

The OSS is also crucial for non-EU businesses selling goods or digital services to EU consumers.

Prior to the creation of OSS, these businesses had to register for VAT in each EU member state where they made sales.

The OSS simplifies this by allowing them to manage their VAT obligations through a single electronic portal.

There are two relevant OSS schemes for non-EU businesses:

 

  • Non-Union OSS: This scheme is for non-EU businesses providing services like digital services, telecommunications, or broadcasting to EU consumers. With a single registration in one EU member state, businesses can declare and pay VAT on all eligible services sold across the EU via quarterly returns.

 

  • Import One-Stop Shop (IOSS): The IOSS is for non-EU businesses selling goods to EU consumers with a value up to €150. This scheme allows businesses to charge VAT at the point of sale, simplifying the customs process and enhancing customer satisfaction. Businesses registered under IOSS file a single monthly VAT return, which streamlines compliance and speeds up customs clearance.

 

In conclusion, the OSS significantly reduces the administrative burden for businesses, enabling them to comply with EU VAT rules across multiple member states through a single, streamlined process.

This new guidance from HMRC is a vital resource for businesses navigating the complexities of post-Brexit trade with the EU.