OSS in Sweden Updated VAT regulation for B2C

OSS in Sweden (One stop Shop)

Does your company manage e-commerce sales transactions (B2C) with other countries in the European Union? If yes, do you have knowledge of the updated VAT regulations for these types of transactions? Here you can read about the updated VAT regulation for B2C transactions with other European Union countries. Everything about OSS in Sweden.

E-commerce sales of goods to consumers in other EU countries

From July 1st, 2021 we have a new updated legislation when it comes to VAT on transactions to citizens in other European Union countries. According to the new legislation should a company which has a total net sale over SEK 99 680 / year (combined) to private individuals in other European Union countries charge VAT on the sale. The regulation says that the VAT should be calculated on the buyer country´s rate, not the sellers.

The simplified example: A Swedish entity has a total net sale (B2C) of SEK 150 000 to costumers in Germany during 2021. Since the company exceeds the threshold of SEK 99 680 / year, is the company in Sweden required to charge and report VAT in accordance with the VAT rate in Germany for this sale.

To make the VAT report correct, you have two opportunities to report:

• Option 1: The company will be registered for VAT in each country they have consumers in. Basically, this means you will submit VAT returns in every country, potentially you need to submit 28 returns each month.
• Option 2: The company will be registered at the Swedish Tax Agency for OSS (One stop shop). If the company is registered for OSS, will the company only get one platform for submitting the VAT once a quarter, which drastically will reduce the work load.

What is OSS (One Stop Shop)?

The One Stop Shop is a single point of contact where online merchants that become liable to pay VAT in other EU member states as a result of their cross-border B2C sales can report their sales via the One Stop Shop and  settle their VAT payments. A company in Sweden can be registered for OSS (One Stop Shop) at the Swedish Tax Agency. An OSS report is only usable for companies which are selling services or goods to non-taxable individuals inside the European Union.

OSS (One Stop Shop) threshold?

Please notice, if the company has a total turnover, to private individuals in EU, below the threshold of SEK 99 680/year, does the company not have to create an OSS reporting. When you report OSS it is important to keep in mind that you always submit the reports in the currency of EURO in accordance with the current exchange rate at the European Central Bank.

Digital market platforms

In addition to the mentioned VAT legislation, has also new regulation been added for so called digital market platforms. A digital platform can be explained as a platform where different companies are selling their products, which also could include international purchases. According to the new regulation could the platform be considered to have purchased and sold the product, even if the platform only mediates the sale. The platform will then be obligated to report VAT for the transaction.

The new regulation is mandatory and applies if:

• The seller is located in a country outside the European Union and/or
• The product is transported from a country outside the European Union and the parcel exceed Euro 150.

To simplify the first point: Assume your seller is in Canada, but the product is in a warehouse in Sweden and the buyer is in Sweden as well. According to the regulation should this transaction be interpreted as the platform has bought and sold the product even if the product, from a civil law point of view, never has been owned by the platform.

That’s it!

I hope you have received some new information regarding this regulation. If you have any questions or need advice in this matter, you are more than welcome to contact us. We at Revideco have a lot of experience of assisting our clients and we can provide you consultations regarding OSS.