Last updated on Nov 25, 2021
Kate Bailey
Freelance Editor
Oct 7, 2021
The effects of recent changes to the VAT requirements for online sales of goods and services both within the E.U. market and abroad will be coming clear as tax agents, freelancers and self-employed folks globally begin to implement the new regulations into their businesses. A huge part of this, for German freelancers and self-employed folks, may involve signing up for OSS or IOSS themselves - they may not need a tax advisor and even using a service like Kontist but taking care of this could be a huge money saver. So, let’s take a look at the process!
The regulations on the one-stop shop, E.U. regulation come into force on July 1, 2021. Sales that fall within the scope of the special regulation and are generated after June 30, 2021, can be declared by registered entrepreneurs under the special regulation for the first time for the tax period 3rd quarter 2021. Pre-registrations for the special regulation are possible from April 1, 2021. The special regulation one-stop-shop, E.U. regulation replaces the previous mini-one-stop-shop procedure and offers a significantly expanded area of application (see explanations in the section “Addressees”).
The previous Mini-One-Stop-Shop process can be used by registered entrepreneurs for sales that were generated by June 30, 2021. A new registration of these entrepreneurs for the special one-stop shop, E.U. regulation is not required (see explanations in the section "Registration and deregistration").
The procedure is aimed at entrepreneurs who are resident in Germany and for a fee
Provide services to private individuals in member states of the European Union in which they are not resident or make intra-Community distance sales of goods or provide an electronic interface through the use of which they assist the delivery of goods within a Member State by a taxable person outside the Community and are therefore treated as if they had supplied the goods themselves.
In addition, the procedure is aimed at entrepreneurs who are not based in the European Union and who work in Germany through an institution, such as having a warehouse from which goods are delivered to private individuals in other EU member states. You will find detailed explanations of the terms 'intra-Community distance sales' and 'electronic interface' in the section 'General questions'.
For entrepreneurs with small and medium-sized sales, the explanations in the section 'Exception for entrepreneurs with small and medium-sized sales' may be of interest.
Entrepreneurs who are already registered for the previous Mini-One-Stop-Shop procedure automatically take part in the special one-stop shop, EU regulation. In order to take part in the special regulation, other entrepreneurs must apply to the BZSt electronically by stating their sales tax identification number. In the case of sales tax unions, participation in the special regulation must be requested by the controlling company using its sales tax identification number.
The information required for assigning a German VAT identification number is published on the BZSt website.
Please note that you will need
After the form has been sent, the BZSt will confirm in writing that the application for registration for the OSS procedure has been made. You can view the application with its corresponding details in the personal area in "My BOP" at any time. Now you’ve done that, how does this affect your tax reporting circumstances?
Well, as with all things tax in Germany - there are various obligations associated with participating in the special arrangement. Some basic duties are outlined below.
The tax return must be submitted electronically to the Federal Central Tax Office by the end of the month following the end of the tax period (calendar quarter). The tax return must therefore be submitted for the:
Even if no sales have been made in the relevant calendar quarter, a tax return (so-called zero return) must be submitted on the specified dates.
The tax amounts declared in the one-stop shop procedure must be transferred in good time so that the payment has been received by the responsible federal treasury by the end of the month following the end of the tax period (calendar quarter). A direct debit is not possible. You’ll need to arrange payment to the Bundeskasse.
The registered entrepreneur must notify the BZSt electronically of any changes to his registration data no later than the tenth day of the month following the change in circumstances. However, changes to the company name and address must only be reported to the responsible tax office. If the data is changed, all registration data must be given according to the current status. To change the registration data, a change form is available in the BZStOnline portal under the heading "Forms".
Records are to be kept of the transactions made within the framework of the special regulation, which enable the tax return and payments to be checked for correctness. The records must be made available electronically on request to the Federal Central Tax Office, the responsible tax office or the centrally responsible authorities of the other EU member states. The retention period for the records is ten years. We have written extensively about how to keep the finanzamt happy so do be sure to add this to your list.
Overall, this is a step towards simplification but in many other ways you will have to jump through a few hoops to get there. Thankfully it is indeed not as difficult as many other German tax tasks, and hopefully you’re able to get it done with our handy wee guide above!
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