Entrepreneurs looking for the tax solutions pay attention to make them as tailored to their needs as possible, while at the same time allowing the simplification of complex operating schemes. One of such solutions applicable to VAT is the OSS procedure.
What is the OSS procedure?
The OSS procedure (One Stop Shop) is a system that allows to settle output VAT by entrepreneurs selling goods or services to natural persons located in various countries of the European Union. Due to the OSS procedure registration for VAT purposes in each country where consumers are located is not necessary, as submission of collective return is possible. The taxpayer has the possibility to settle such transactions in the country of the identification. In the case of EU entities, the country of the identification is one selected country where their registered seat or fixed establishment is located. Entities from outside the European Union have the possibility to choose one of the countries from which they carry out the sale of goods or provide services.
Under OSS procedure we can distinguish the union and non-union scheme. In case of the first, taxpayers can settle the sale of goods and services, provided that they have registered seat or fixed establishment in one of the member states of the European Union. Entities located outside the European Union, can use it for the sale of goods, whereas for services they have to use non-union scheme.
Sales limits
Sales of goods or services to consumers from other member states may be settled in the Polish VAT return up to a certain fixed-amount threshold. For entrepreneurs located in the European Union, the amount of threshold is EUR 10’000 or the equivalent amount expressed in the national currency of the member state (in Poland is PLN 42’000). Once the indicated limit is exceeded, there are two possible courses of action:
- registration in each of the member states to which sales or services are provided to,
- registration under the OSS procedure in one member state of identification.
It is worth noting that if the company is not established in the EU, the above limit does not apply and as soon as the entity starts making transactions, it is obliged to use one of the above VAT settlement methods.
Registration for OSS purposes in Poland
In Poland, the competent authority for registration under the OSS procedure is Second Tax Office Warszawa-Śródmieście. The first step is submission of the registration form. It shall be submitted electronically using a qualified signature or an electronic signature, if the form is submitted via Portal Podatkowy. When acting through a representative, it is also necessary to submit additional documents such as a power of attorney and the appropriate stamp duty.
Registration for the OSS procedure is effective from the first day of the quarter following the quarter in which the first transactions were carried out. Retroactive registration is also possible, but in this case it is necessary to submit the information to the Tax Office by the 10th of the month following the month in which the sale of goods or the supply of services subject to OSS settlement began. If this deadline is exceeded, it is not possible to avoid the obligation to register in each of the member states where the recipients of the goods or services are located.
Maintenance of VAT settlements under the OSS
After registration for OSS purposes, the taxpayer is obliged to submit quarterly returns, which should be completed in accordance with the VAT rates in force in each member state. The return is sent electronically to Head of Second Tax Office. It is also possible to submit the draft of return. In response, the office sends information regarding any potential errors to the e-mail address of taxpayer indicated in registration documents.
It should be noted that the return has to be submitted by the end of the month following the settlement quarter, even if the last day falls on a weekend or public holiday.
Payments resulting from the OSS return
The amount of output VAT should be paid on the special bank account of Second Tax Office Warszawa-Śródmieście. It is important to make the payment in EUR currency. Moreover, the title of transfer should indicate the assigned UNR number, which allows the funds to be allocated to the return. This number is assigned by the Head of Second Tax Office Warszawa-Śródmieście and taxpayer receives it on the e-mail address indicated during the registration after submitting the quarterly return.
Records kept for OSS purposes
One of the conditions for applying OSS procedure is to collect detailed records of transactions, which should be handed in at the request of the authority within two weeks. With respect to short period to provide the required data, it is worthwhile for the taxpayer to collect and verify the data on an ongoing basis. The details that the records should contain are set out in Regulation 282/2011. This includes information such as:
- the member state of consumption where the supply of goods or performance services are carried out;
- type of services provided or description and quantity of goods supplied;
- the date of performance of services or delivery of goods;
- tax base amount with indication of currency used;
- any subsequent amounts increasing or decreasing the taxable base;
- VAT rate used.
The taxpayer is obliged to keep the records for 10 years. In addition, it must be made available whenever requested by the authority.
Summary
The OSS procedure allows for a significant simplification of tax settlements. Although its implementation may appear to be a complicated process, it enables a significant facilitation of operations through the ability to register in only one country of identification.
Please do not hesitate to contact our advisors if you need assistance related to the implementation and application of the OSS procedure.
