When it comes to VAT
On July 1, 2021, the new EU VAT rules were introduced for E-commerce sales (distance sales to non-entrepreneurs in other Member States). Under these rules, entrepreneurs are liable to pay VAT earlier and more often in other Member States. This often means that these entrepreneurs must register for VAT in those Member States. However, the new rules offer simplification by making it possible to pay this foreign VAT in the Netherlands on the basis of a separate VAT return. Also known as the OSS (one Stop Shop) declaration. This prevents VAT registrations in other Member States. The foreign VAT due is also paid via the Dutch tax authorities. The returns and VAT payments are then exchanged with the other Member States. This system has been introduced in every Member State so that an entrepreneur from Germany, for example, can also arrange his Dutch VAT payment via the OSS declaration in Germany.
The OSS declarations can only be submitted electronically. This required an adjustment to the tax authorities' IT systems. These adjustments turned out to be so complex that timely introduction of the new rules was at risk. For that reason, a so-called emergency track was devised and implemented at the time. On the basis of this emergency track, entrepreneurs can submit OSS declarations (and the declarations can be exchanged with other Member States). However, the OSS declarations within the emergency track can only be processed manually. The processing and checking of an OSS declaration therefore takes approximately 6 months. In addition, it has become apparent that tax authorities in other Member States also have great difficulty handling OSS declarations. The result of this is that entrepreneurs are often wrongly imposed default fines in the Netherlands, for example because the OSS declaration of the aforementioned German entrepreneur is processed too late in the Netherlands.
An arrangement has now been made for this situation. No default fines will be imposed until June 1, 2024. From June 1, 2024, this problem must be solved by an update of the IT system. Default fines that have already been paid will be refunded and pending objections will be honored.
If you have any questions about this topic or if you would like to discuss the topic further, please do not hesitate to contact us at info@vatpartners.com
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