Signing up for the new VAT e-commerce program for freelancers and the self-employed

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.

Registration - step by step

Please note that you will need

1. Where now?
   
   a. Registration happens at the BZSt - the central federal tax office.
   b. Visit the OSS website of the Federal Central Tax Office (BZSt).
   c. To register for the one-stop shop, click on the "Registration and login" button.
   
2. BOP who?
   Under “Registration and Deregistration” you will find the link to the “BZSt-Online-Portal”  (also known as BOP for short).
3. ELSTER certificate is handy, and expect to wait if you need to apply for one: 1. Login to the BZSt online portal. You must now log in to the BZSt online portal via “My BOP - Log in now”. 2. Due to the existing tax obligations as a trader, either you or your tax advisor should already have such an account and the corresponding access data. If this is not the case, an account must be requested via “Not yet registered? Create Account.
   3. Please note that applying for and confirming an account takes time and thus delays registration for the OSS procedure.
4. Who are you really, though?
   a. Identification in the portal
   b. The login to the BZSt online portal takes place, for example, via a pfx. Certificate file and your password. Other login options (e.g. ID card, mobile login) are also available. Select the option you have saved for managing your account.
5. Once you’re in...
   - Find ‘’Forms and services’’
6. And find...
   a. In the “Forms & Services” area you will find a link to the “Registration display for participation in the OSS EU regulation” by selecting “All forms”.
7. Follow the steps, tell them your hopes and dreams...
   a. The registration process for the one-stop-shop procedure starts as soon as you click on “Next”. Read all information and explanations carefully and always contact your tax advisor if anything is unclear or in doubt.
   b. Help with questions - the fields marked with a blue question mark ("?") Will help you in the event of any ambiguities or questions.
8. Double check, check 1-2...
   a. At the end of the registration process, you will be asked to double-check all the entries before you finally send the form. Take the time to do so and then confirm your details.

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.

Timely submission of the tax return

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:

1. Calendar quarter by April 30,
2. Calendar quarter by July 31,
3. Calendar quarter up to October 31
4. 4th calendar quarter up to January 31 of the following year.

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.

Timely payment of the registered taxes

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.

Change of registration data

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".

Record keeping

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!