Teemu Konttinen

Teemu Konttinen

MA in Design Management. Market focused strategist with bids eye view.

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VAT registrations, why are there so many?

Before the 1st of July, there was a single one for each country where the sales exceeded their threshold. Sounds simple, but in reality, for anyone serious about their business it was VERY expensive and created a significant barrier to a single EU market. After all, if you sold at any significant quantity you had to register and provide full reporting, and for the other countries, you had to monitor your thresholds in order not to incur potentially significant liabilities. 

Let’s start with the simplest one: OSS 

OSS is used for intra-EU sales, it is only valid with goods stored in the EU at the time of sale. In other words, they have been imported or manufactured in the EU. The registration is done in the country of registration of your company or where you are storing goods (we will come back to this later). Straightforward with quarterly reporting at the already familiar tax office portal you have used so far. 

VAT registration via OSS portal
One stop shop - The official portal (European Commission, 2022)

VAT registration is a bit more complicated but again nothing to worry about. VAT registration has to happen if you store goods in another country of your company registration. The most common occurrence of this is obvious when one uses Fulfillment centres like FBA (Fulfillment by Amazon). So contrary to the previous situation, the registration has nothing to do with the sales threshold. Once you go over the sales threshold in one country you are liable for VAT everywhere in the EU. Reporting period varies from one country to another, but as it contains only domestic sales VAT reports it is not as excessive as in the country of incorporation. Some countries require you to appoint a Fiscal Representative if you are not incorporated or don’t have a fixed establishment in the EU. 

The fixed establishment is between VAT and incorporation. You are liable for full accounting, unlike with VAT registration. You are required to register and pay income tax in that country. You will be considered to have a fixed establishment for example when you directly rent or own your own warehouse or other premises, or employ staff in the country. 

IOSS is needed if you deliver goods valued below 150€, to customers in the EU from outside the EU. This is regardless of where you are registered, in the EU or outside of the EU. 

Sales thresholds do not apply as VAT must be collected on all EU sales, IOSS is just the most customer-friendly and efficient way to do it. If you are incorporated or have a fixed establishment in the EU, the registration is simple: just register at your national tax office. If you are not incorporated in the EU or only have VAT registration, you have to appoint an Intermediary for IOSS. 

Ok, it is a jungle, no denying it.

EAS helps you with all registrations and can act as an intermediary for IOSS users.

EAS also automates the tax reporting for your EU sales.

Get in touch with us, you’ll be fine! 

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