As previously noted, with effect from 1 July 2021, the new One Stop Shop (“OSS”) and the new Import One Stop Shop (“IOSS”) schemes replaced the traditional distance selling rules which were previously in place across the EU and brought to an end the historic low value consignment VAT relief threshold of €22. Effectively, the introduction of both the OSS and IOSS sought to extend the Mini One Stop Shop (“MOSS”) which was previously in place across the EU in respect of supplies of telecommunications, broadcasting and electronic (“TBE”) services to private customers.
An OSS or IOSS registration application should be available electronically in the relevant EU Member State and should enable the supplier to declare by way of a single VAT reporting and payment mechanism, VAT on specific B2C supplies across multiple EU Member States. The supplier remits the VAT payable to the tax authorities in the jurisdiction the OSS or IOSS registration is held and this is in turn disbursed as appropriate to the relevant Tax Authorities across the EU. As a result, multiple EU VAT registrations should not be required to be held.
While the OSS registration is somewhat straightforward, with regard to the IOSS registration, this is dependent on the establishment of the supplier. For suppliers seeking to register for the IOSS, the following apply:
- In respect of an EU established supplier, they should register in the EU Member State in which they are established.
- In respect of a non-EU established supplier, they should be able to register in an EU Member State of choice provided they hold an establishment in a country that the EU holds a VAT mutual assistance agreement with, and the goods as supplied from that third country to the EU.
- In all other scenarios, the non-EU established supplier must register for the IOSS indirectly through an intermediary. The non-established EU supplier should be registered through the appointed intermediary in the EU Member State in which the intermediary is established.
Role of the Intermediary & Joint and Several Liability
Initially, confusion arose as to the role of the intermediary and in particular, surrounding the joint and several liability held by the intermediary. As such, clarification was sought from Revenue as to the approach to the application of joint and several liability for VAT due under the IOSS.
Revenue have clarified that although the role of the intermediary is to fulfil the IOSS VAT obligations on behalf of the supplier, including having responsibility for the payment of the VAT due, filing of returns and keeping records, the VAT liability will remain the liability of the taxpayer. Revenue have further clarified that the application of joint and several liability will not apply automatically (as is the case in certain EU, non-Irish, Member States) and would only be used in circumstances where it is deemed necessary to do so for the protection of the exchequer (such as cases where risk management procedures are not implemented by the intermediary). Where the intermediary is to be held jointly and severally liable, this will apply prospectively and Revenue will issue a notice to both the intermediary and the taxpayer notifying of same.