For any non-EU businesses selling into Europe, one question always comes up: “Where do we need to register for VAT and is there a way to make it simple?”
EU VAT rules and VAT registration requirements depend on what you sell (goods or services), how you sell, where goods are located, and who your customers are. Get it right, and VAT becomes manageable. Get it wrong, and businesses can face unexpected registrations, delayed deliveries, compliance risk and unnecessary cost.
In this second part of our series, we cut through the noise and outline a straightforward route to understanding your VAT registration obligations with a focus on how One Stop Shop (OSS) and Import One Stop Shop (IOSS) can genuinely make life easier.
At HaysMac, we help businesses minimise complexity and design VAT strategies that are compliant, proportionate and scalable while aligning with the business strategy and direction. If you want reassurance that you’re registered in the right places – and only the right places – speak to our VAT team.
In the meantime, read on…
Start with the fundamentals: what are you supplying and how do you want to do it?
For a lot of our clients, VAT is usually on the backburner whilst the business focusses on logistics, customer needs, pricing etc – and we think this is the right way for businesses to think – VAT definitely shouldn’t be the tail that wags the dog. However, maybe goods have already moved into the EU to service a client demand without Tax or Finance being fully informed. Maybe an EU sales model is already in place, but goods have been shipped to a country that isn’t on the “approved” list. Internal alignment between Customer Service, Logistics, Tax, Finance, etc is important because EU VAT registrations are not driven by turnover alone. In addition, they typically arise when you:
- Import goods into the EU
- Hold stock in an EU country
- Sell goods locally within an EU Member State
- Make certain Business-to-Consumer (B2C) supplies across borders
- Are deemed to be responsible for VAT under marketplace or platform rules
- Supply services to private individuals located within the EU (e.g. streaming, e-books, agency services or software)
Understanding where a VAT registration obligation may arise and why is essential before looking at whether there may be a simplification available. To keep it simple, if any of the above (amongst other things) apply, your business may have a VAT registration requirement. The good news is that HaysMac can help you.
Planning for Europe is key as VAT touches the customer experience journey, accounting, pricing and a lot more. If VAT isn’t involved in the strategy to enter Europe and structure accordingly, your business risks:
Common mistakes we see
We regularly see businesses:
- Discovering too late that new fulfilment or stock locations trigger VAT registration requirements
- Receiving fragmented advice across multiple EU countries
- Lacking a single owner of VAT risk internally
A future-proof VAT structure requires clarity, coordination and an understanding of when simplifications apply but more importantly, when they don’t.
What simplifications are available?
For many businesses trading in Europe, a high number of local VAT registrations have historically been held. Not only does this increase the compliance burden but it can also be difficult for lean Finance and Tax teams to stay on top of deadlines and differing reporting structures.
There are simplifications which can be powerful gamechangers for businesses but it’s important to ensure that any simplification is implemented correctly and backed up by robust processes. Applying a simplification doesn’t mitigate the need to ensure that systems are set-up correctly and capable of keeping up with changing EU VAT legislation (e.g. VAT rates and invoicing requirements).
We discuss the main simplifications (OSS and IOSS) below.
What is OSS (One Stop Shop), when it helps and when it doesn’t
The One Stop Shop (OSS) is a simplified way for suppliers to account for VAT due on sales to consumers (i.e. B2C) across the EU. For suppliers who fulfil deliveries from inventory within the EU, a return is submitted in 1 EU Member State reporting sales made to customers resident in all other EU Member States at the rate applicable in each Member State, rather than having to register for VAT in every EU country where they sell to consumers. There are 2 types of OSS scheme: Union (for businesses established in the EU supplying services or non-EU businesses fulfilling sales of goods from EU based stock), and Non-Union (for non-EU businesses supplying services only).
We have outlined below an overview of where OSS can be used and (maybe more importantly) where it cannot be used. This list is not exhaustive and also does not cover all scenarios.
It is important to note that OSS simplifies reporting, not liability. Correct VAT rates must still be applied by country, and data accuracy is critical in order to ensure compliant reporting.
What is IOSS (Import One Stop Shop), when does it apply and its limitations
The Import One Stop Shop (IOSS) is an electronic portal for e-commerce sellers to register, declare and pay VAT on imported goods (valued up to €150) sold to EU consumers. The scheme simplifies VAT compliance by allowing a single, monthly VAT return for all EU sales by collecting VAT at the point of sale, ensuring faster customs clearance and preventing extra fees for customers upon delivery.
What good looks like
This is quite a subjective topic and will vary business to business. A robust VAT strategy:
- Is based on your actual supply chain, not assumptions
- Uses simplifications where appropriate, not automatically, without compromising on compliance
- Is documented and understood across Finance, Tax and Operations
- Can scale as European sales grow or change
How HaysMac can help: your one-stop VAT roadmap
At HaysMac, we help businesses design VAT strategies that work in practice, not just on paper. We can:
- Map your supply chain and identify registration triggers
- Advise whether OSS or IOSS would simplify your position
- Assist with implementing the chosen VAT strategy from a practical perspective
- Coordinate VAT registrations and representation across EU Member States
- Act as a single point of contact as your EU operations evolve
If you’re unsure whether you’re registered in the right places or whether OSS or IOSS could simplify your position speak to HaysMac’s VAT team. We’ll help you build a clear, compliant route into Europe, so VAT supports growth rather than slowing it down.
Coming next in the series…
Part 3: How to run EU VAT compliance monthly/quarterly (operating model)
Previously:
Part 1: How to trade in the EU – the VAT decisions and structure you need from day one
