With the One-Stop-Shop (OSS), from 1.7.2021, online traders should be able to carry out the Value Added Tax compliance for their cross-border sales to end consumers - so-called distance sales - from their country of residence.

Compared to other EU states, Germany has fallen behind in the technological implementation of the OSS. To what extent German online retailers will therefore have access to this technology from 1.7.2021 is still questionable.

Representatives of the EU Commission are currently explaining at conferences and other events that German online traders will be left behind in this case from 1.7.2021.

We will explain in this blog post what this means and whether this threat is economically credible.

Elimination of all delivery thresholds and direct tax liability in (almost) all EU countries

According to the current state of planning, the delivery thresholds of all EU countries will be abolished as of 1.7.2021.

Accordingly, you or your clients will be taxable in every EU country to which you send even one parcel, if your cross-border deliveries within the EU exceed 10,000 Euros net.

Removal of all delivery thresholds as of 1.7.2021

Basically you would have to register in every EU country where you have only one customer (end user).

In order to avoid this becoming mandatory, there should be the possibility of doing this centrally from the country of domicile - e.g. Germany.

For this purpose, the tax authorities are to provide a technology through which they can centrally report sales and also centrally manage Value Added Tax - the so-called one-stop shop.

In Germany, the Federal Central Tax Office (BZSt) will provide the OSS. You will also have to transfer Value Added Tax to the OSS in other EU countries. The BZSt will take over the distribution to the individual EU states.

At present, however, Germany is one of the EU states that are having problems meeting the deadline of 1 July 2021.

What can this mean in the worst case?

Background: Lack of IT resources and no will to exchange

In July 2020, Germany had last suggested postponing the reform at least until 2022. The background is that even the little brother or precursor of OSS - the mini one-stop shop for digital services - is not yet mature and scalable.

This was last stated by the Federal Audit Office on 29.10.2020, as the following extract shows.

Federal Audit Office 29.10.2020: https://www.bundesrechnungshof.de/de/veroeffentlichungen/produkte/sonderberichte/langfassungen-ab-2013/2020/massnahmen-zur-verbesserung-der-umsatzsteuerbetrugsbekampfung-chancen-der-digitalisierung-nutzen

Elimination of all delivery thresholds but no OSS! Is that realistic?

Representatives of the EU Commission currently declare that the cut-off date of 1.7.2021 has been set. EU states which are unable to provide their companies with OSS by then will be left behind.

Better said, online traders in these EU countries should be left at a disadvantage, as they will become taxable in many - often all - EU countries as a result of the abolition of delivery thresholds.

Without OSS technology, these traders will have to register locally in each individual EU country.

Is this threat credible to the EU Commission?

In economics - or in the special field of game theory - threats are divided into credible and implausible.

The threat of the EU Commission is likely to be implausible.


Imagine that all EU states complete the OSS on time, but Germany does not.

This would mean that Germany would receive more Value Added Tax than before from the other EU states - the OSS model pupils - due to the elimination of the delivery thresholds.

On the other hand, online traders of the former export world champion Germany would not easily have the opportunity to declare their Value Added Tax in other EU countries. Very few - especially small companies - would have the resources to register for tax purposes in any EU country and would therefore continue to declare their Value Added Tax in Germany.

This seems plausible because, despite broad-based information campaigns, there is still a large proportion of dealers who, despite having exceeded delivery thresholds in other EU countries, continue to deliver their Value Added Tax in Germany.

Germany would thus benefit from its own failure to provide the OSS model pupils with the necessary support. The threat by the EU Commission - and also by many other EU states - is therefore not credible from an economic perspective.

In this respect, the reform is only likely to take effect on 1 July 2021 if all EU states have implemented the OSS by that date. Otherwise we will see a postponement to 1.1.2022.

Is the 1.7.2021 realistic and who benefits from the OSS?

In the current issue of Juve Steuermarkt I explain that the probability is currently not so bad that we will see the OSS on 1.7.2021.

Juve tax market November/December 2021

However, the OSS will only be of use to traders who do not use fulfilment centres in other EU countries.

Otherwise, the topic Value Added Tax compliance will become even more complex due to the OSS.

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