We have experience with the One Stop Shop (“OSS”) scheme since the beginning of its operation. This is a voluntary special scheme, which significantly simplifies the tax obligations of businesses that supply services and sell goods directly to final consumers (known as non-taxable persons) in other Member States.
The OSS scheme allows these businesses to meet their VAT obligations across the EU without having to register for VAT in the individual EU countries, where their customers are located.
We offer our clients registration to all types of OSS schemes that they are entitled to use in the Czech Republic. We will prepare the tax return and arrange communication with our tax administration arising from the scheme.
We are also ready to assist in setting up systems, including identifying mechanisms for determining the customer’s place of establishment. We also communicate with the tax administrations in the respective Member States of consumption.
Eliminating excessive administrative burdens on businesses by registering in a single State (the so-called Member State of Identification) and fulfilling obligations through it to all Member States where their end customers are located. The system first started operating in 2015 under the name Mini-One-Stop-Shop (MOSS) on a defined range of services (telecommunications, broadcasting and electronic services – hereinafter “TBE”), for which the place of supply in the country of the customer as a non-taxable person was newly established at that time.
Under the new designation of One-Stop-Shop (OSS), the scheme currently already covers all cross-border services supplied to non-taxable persons, as well as cross-border “distance selling” (formerly known as consignment), where goods are sold and dispatched or transported to the final customer in another Member State. In the case of TBE services and distance sales of goods to end customers in another Member State, there is in some cases a limit of EUR 10,000, which can still be taxed in the country of the supplier.
The OSS scheme also covers the sale of goods imported from 3rd countries to end customers in the EU under the Import-One-Stop-Shop (IOSS) scheme. Among other things, this scheme makes things easier for the consumer who would otherwise have to pay VAT to the customs office himself or through a customs agent (e.g. the post office or another carrier). The supplier can use it in the case of imports of goods in consignments up to a value of EUR 150.
European Union scheme
This special scheme can be used (for registration to OSS in the Czech Republic) by taxpayers and identified persons who:
Service providers must be based in the Czech Republic, or have an establishment here, if they are not based in the EU. In the case of distance selling, a seller who does not have a registered office or place of business in the EU can also register for the scheme if the dispatch or transport of the goods starts in the Czech Republic.
In the case of supplies of services to final customers, the special scheme covers only supplies in Member States where the supplier is neither established nor has an establishment. Example: An entrepreneur based in the Czech Republic provides electronic services to Germany, Croatia and Poland. He has an establishment in Poland, though. Under the EU scheme, he can only report transactions to Germany and Croatia. In Poland, he must be registered for VAT and report his transactions in the local tax return there. He cannot include services provided directly in the Czech Republic in the special scheme, either, but must report them in its standard domestic tax return.
Role of the electronic interface operator
The operator of an electronic interface is a taxable person who facilitates the supply of goods or services using an electronic interface (e.g. an electronic marketplace, platform or portal). If the operator of the electronic interface facilitates the supply of goods between a foreign seller and a non-taxable person, he becomes the so-called deemed supplier of the goods. The transaction is viewed in two steps: a) as a supply of goods to the operator of the electronic interface and b) as a distance sale of goods to a non-taxable person with dispatch or transport. Similar rules apply in some cases to the provision of services.
This scheme is only for service providers who are not established in the EU – i.e. have no registered office or place of business anywhere in the EU. If they provide services to end customers in the EU, they must tax these services in their customers’ countries. The country of identification (i.e. the country in which the provider subscribes to the OSS scheme) can be chosen freely by such provider.
The import scheme applies to distance sales of imported goods (i.e. sales of goods from third countries to end customers in the EU) which are not subject to excise duty and the value of which does not exceed EUR 150.
This special scheme is open to both EU sellers and sellers who do not have a registered office or place of business in the EU and typically sell their goods via an e-shop to end customers in the EU.
The following can register for the import scheme in the Czech Republic:
EU sellers can also choose an intermediary to carry out their obligations in connection with the import scheme for them. However, for sellers from third countries, authorising an intermediary is a condition for the use of the import scheme.
Role of the intermediary in the import scheme
As mentioned above, the intermediary is entrusted by the supplier to fulfil the obligations arising from the import scheme on his behalf. In particular, the intermediary files tax returns for the supplier, makes tax payments, fulfils reporting obligations (e.g. change of registered office or other registration data) and keeps relevant records. The intermediary may even be entrusted by more than one person for whom he performs duties. An important aspect is the fact that, from the perspective of the tax administration, the obligations of the delegating persons are considered to be the obligations of the intermediary and the tax authorities turn directly to the intermediary, not to the delegating person, in matters relating to the import scheme (including, for example, the recovery of tax due).
Only a taxable person who is a taxpayer or an identified person and has a registered office in the Czech Republic or, if applicable, an establishment (if it does not have a registered office in the country) may be appointed as an intermediary in the domestic import scheme in the Czech Republic.
The tax is denominated in euros and paid to a special account of the Tax Administration held in euros. The tax return is filed for all Member States where the selected transactions are provided. An authenticated part of the tax portal in a special application for the OSS scheme, set up for this purpose by the tax administration, is used for filing returns. The tax administrator in this case is the Financial Office for the South Moravian Region.
The tax period is the calendar quarter for the EU and non-EU schemes, and the calendar month for the import scheme. In both cases, the tax return must be filed by the end of the calendar month following the end of the tax period (regardless of whether or not the last day of the month is a working day). The tax is also due on the same date. For example, in the EU scheme, the deadline for filing the tax return for Q2 2024 is 31 July 2024.
In addition to the usual records for VAT purposes that tax entities are obliged to keep under the VAT Act, the European legislation imposes an obligation to keep special records for the purposes of the OSS scheme for all transactions carried out under this scheme. This includes, for example, the type of transaction selected, the tax rate used, the information used to determine the place of transaction, etc. The tax entity must be able to make these records available electronically at the request of both domestic and foreign tax authorities.
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