VAT OSS and IOSS procedure and the cash register

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From July 1, there was a revolution in e-commerce accounting. As a result of the changes, taxpayers have to settle their activities differently. For all new regulations, they have to check which ones apply to them and how to apply them in practice. Is it necessary to have a cash register for the settlement of VAT OSS and IOSS procedures? Answer in the article.

VAT OSS procedure - simplifications

By design, the VAT OSS aims to simplify the VAT obligations imposed on taxpayers supplying goods and services to non-taxable persons (consumers) within the EU by enabling them to:

  • electronic registration for VAT purposes in one Member State;

  • declaring and paying the VAT due as part of a single, electronic, quarterly declaration.

Example 1.

A taxpayer established in Poland, who does not have permanent establishments in other countries, sells goods to consumers in Germany and Austria. The sale is made through your own online store. Goods are shipped to consumers from a warehouse in Poland. Importantly, the total value of sales (excluding tax) to consumers exceeds PLN 42,000. Can the taxpayer apply the VAT OSS procedure?

In this situation, the total value of sales exceeds the threshold of PLN 42,000, so the place of delivery of the goods is, respectively, Austria and Germany, i.e. the place where the goods are located at the time of completion of their shipment or transport to the buyer.

A taxpayer can choose to register for VAT in all these Member States and to file VAT returns and pay VAT directly in each of these Member States. Alternatively, it may decide to simplify and use the VAT OSS.

The VAT OSS procedure is addressed to the entrepreneur:

  1. having a registered office or a permanent place of business in the territory of the European Union, for the purpose of declaring and paying VAT due for:

  • ESTO,

  • services to consumers (B2C) for which the place of supply is a Member State where he has no registered office or a fixed establishment; services to the consumer, for which the place of supply is the Member State where the trader is established, cannot be declared under the EU procedure, but must be declared in the national tax return of the relevant Member State;

  1. who do not have a registered office or a permanent place of business in the territory of the EU, for the purpose of declaring and paying VAT due under the ESPO;

  2. facilitating by using the electronic interface in accordance with Art. 7 sec. 2 of the VAT Act (regardless of whether it has its registered office in the territory of the EU or in a third country), making:

  • ESTO,

  • domestic supplies of goods to a consumer whose dispatch or transport begins and ends within the territory of the same Member State.

A taxpayer who decides to register in the VAT OSS procedure will be obliged to settle the VAT due on all activities covered by this procedure, exclusively within its framework.

IOSS VAT procedure

IOSS is an electronic system that enables taxable persons supplying goods shipped from third countries to consumers (B2C) located in Member States where they are, in principle, not established. The IOSS VAT procedure allows you to declare and pay VAT due in these Member States for the above-mentioned one-stop-shop via a dedicated web portal. The taxpayer can therefore pay in the Member State where he is identified. Thus, thanks to IOSS, taxpayers avoid registration and registration and reporting obligations in each Member State where the supply of goods takes place, these are the so-called member states of consumption.

The IOSS procedure is available for taxpayers established in the EU and for taxpayers not established in the EU who conduct the above-mentioned delivery of goods, i.e. distance selling of imported goods (SOTI) with an actual value of up to 150 euros.

Cash register and the VAT OSS and IOSS procedure

As it is easy to see, in both procedures, taxpayers make deliveries to natural persons.

Let us remind you that the obligation to keep sales records using a cash register applies to all taxpayers who sell to certain recipients, i.e. natural persons who do not conduct business activity and flat-rate farmers.

We would like to remind you that taxpayers using the OSS and IOSS VAT procedure are required to keep separate records.

In the case of the VAT OSS procedure, the additional VAT register should include, among others:

  • the indication of the Member State of consumption where the goods are supplied or the services are provided;

  • the type of services provided or the description and quantity of the goods supplied;

  • the date on which the services were provided or the goods were delivered;

  • tax base with an indication of the currency used;

  • any subsequent amounts to increase or decrease the tax base;

  • the VAT rate applied;

  • the amount of VAT due with an indication of the currency;

  • date and amount of payments received;

  • advance payments received prior to the delivery of goods or services;

  • invoice information;

  • in the case of services, the information used to determine the place where the customer is established or has his permanent address or usually resides;

  • in the case of goods, the information used to determine the place where shipment or transportation of the goods begins and ends to the buyer;

  • any other evidence regarding possible returns of goods.

Start a free 30-day trial period with no strings attached! IOSS VAT taxpayers also need to keep separate records to be able to account for the tax in each country.

The legislator pointed out that the above documentation is extremely complex and meticulous. In the opinion of the Ministry of Finance, separate records kept by these entities are sufficient in terms of the correctness of the control of their activities in this respect.

Therefore, from July 1, 2021, new exemptions from the obligation to keep records at the cash register, introduced in relation to changes in e-commerce, have been added. The sale was released from the obligation to record at the cash register under the VAT OSS and IOSS procedure.

The delivery of goods by Poczta Polska will also benefit from the exemption.

In the case of taxpayers who do not use the above procedures, the exemption will not apply.

Summing up, the exemption from recording at the cash register the supplies made by taxpayers using this procedure should be regarded as right. These entities already keep very accurate records and re-recording on the cash register is completely unnecessary.