FAQ
Check the answers to the most frequently asked questions about our consulting services.
VAT OSS – IOSS Registration
1. I sell online in several European countries using warehouses to manage the goods. I intend to sell in other European countries as well, but without using other warehouses on site. Can I use the OSS regime to manage VAT obligations?
In countries where you use warehouses, therefore where you have stock of goods, you will have to open a VAT number and pay VAT in these EU countries, relating to domestic sales. For example, if you use the Amazon warehouse in France, you need to open a VAT number in France and pay VAT monthly in France for sales that start from the French warehouse and are purchased by French end customers (b2c).
For cross-border sales (e.g. goods leaving France and arriving in Germany, or leaving Italy and arriving in Belgium), however, you can join the OSS regime.
2. Is registration in the OSS VAT regime mandatory?
No. If you exceed the threshold of €10,000 in annual sales at a pan-European level, you can decide whether to open a VAT number in the EU countries where you sell or whether to join the OSS regime, declaring VAT in the country of residence of your company and paying it in the countries of destination of the goods.
If you do not exceed the threshold of €10,000 in annual pan-European sales, you can still opt for the OSS regime to benefit from lower VAT rates in some countries compared to the country where your company is based.
VAT Registration - Fiscal Representation
1. I sell online in several European countries, am I obliged to open a tax position in each country I sell in?
In countries where you use warehouses, therefore where you have stock of goods, you will have to open a VAT number and pay VAT in these EU countries, relating to domestic sales. For example, if you use the Amazon warehouse in France, you need to open a VAT number in France and pay VAT monthly in France for sales that start from the French warehouse and are purchased by French end customers (b2c).
For cross-border sales (e.g. goods leaving France and arriving in Germany, or leaving Italy and arriving in Belgium), however, you can join the OSS regime.
2. How is the appointment of the tax representative carried out?
The tax representative can be appointed through one of the following options: a public deed, a private deed, a letter recorded in a special register of the competent Revenue Agency, a deed authenticated by the notary of the foreign State of interest. Following the appointment, the representative must open the VAT position for the applicant.
3. Can I appoint a tax representative and also open a tax position to handle VAT obligations in the same country?
No, it is not possible. The appointment of a tax representative is an alternative solution to other possible options, such as: opening a tax position (direct identification for VAT purposes), setting up a permanent establishment, setting up a foreign company or using the optional VAT OSS regime. Therefore, based on the needs of their business, the VAT taxable person will have to choose between the possible solutions.
Foreign E-commerce - Warehouses in the EU
1. I have an Italian e-commerce company and I also sell in France and Germany. I invoice about €40,000/year in France and €50,000/year in Germany, where do I have to pay VAT?
From 1 July 2021, the country-by-country thresholds have been eliminated. VAT on distance sales to consumers located in other EU countries must be declared at destination if the seller has reached the threshold of €10,000 in distance sales to consumers located in the EU. This is a threshold to be considered at EU level, cumulating all sales to EU consumers. Otherwise, VAT applies in the country where the company is based. Therefore, if you exceed the threshold of €10,000 in annual sales at a pan-European level, you can decide whether to open a VAT number in the EU countries where you sell, or whether to join the OSS regime.
If you do not exceed the threshold of €10,000 in annual pan-European sales, you pay VAT in the country where the goods are shipped from.
2. I sell online in different parts of Europe through marketplaces and I have chosen to rely on it also for the management of goods and warehouse. What do I have to do to fulfill VAT obligations, avoid penalties or account blocking?
If you have stock of goods in EU countries, relying – for example – on the Amazon FBA program or Zalando or any other marketplace, you are required to open a VAT number and pay VAT in those countries, relating to domestic sales. Cross-border sales must always be declared in OSS.
VAT refunds across the EU
1. What are the requirements to request a refund?
They do NOT have in the foreign country concerned either a registered office, permanent establishment, domicile or habitual residence;
They have NOT carried out VAT-relevant transactions in the State concerned, with the exception of:
- Transport services and related services, exempt
- Transfer of goods and provision of services with VAT charged to the VAT debtor
All VAT-charged expenses for which a refund is requested must have been incurred for business commercial purposes and NOT for private use.
2. On which goods and services can I request a refund?
The possibility of recovering the VAT paid varies from country to country; in general, here are the admissible expenses:
- Fuel (including excise duty refund);
- Expenses relating to means of transport (including rental), with the exception of goods and services referred to in codes 1 and 2;
- Road tolls and charges for road use;
- Travel expenses, such as taxi fares, for the use of public transport;
- Accommodation;
- Food, beverages and catering services;
- Entrance to fairs and exhibitions;
- Luxurious, entertainment and entertainment expenses;
- Other: education-related services, work on property, purchase or rental of property, etc.
3. Who can request a refund of foreign VAT?
The refund of foreign VAT can be requested by all VAT taxable persons (businesses and professionals) who incur costs in EU member countries other than their country of residence, including those who pay VAT to foreign suppliers.
According to Directive 2008/9/EC of 12 December 2008, in force since 1 October 2010, the refund of VAT paid abroad is recognized to the taxable person only in relation to transactions that give the right to deduct the tax in the State in which he is established.
4. What are the deadlines for submitting refund requests?
The refund request can be submitted quarterly (minimum credit €400) or annually (minimum credit €50). It can be submitted starting from the first day of the month following the reference quarter and by September 30 of the year following the reference period.
EU Transnational Posting
1. A driver employed by a company based in Italy drives a truck full of goods from Italy to France; he unloads all the goods in Paris. Then, for the return trip, he loads the goods in Paris to deliver them to Italy. Does he need a posting certificate?
No, as he has carried out two bilateral transport operations: one from Italy (Member State of establishment) to France (host country) and another from France to Italy. Therefore, he is not subject to secondment rules during the entire journey.
2. A driver employed by a company based in Portugal (PT) transports a truck full of goods from Lisbon (PT) to Marseille (FR). The driver unloads the goods in Marseille. In Marseille (FR), the driver then loads a truck full of goods and unloads them in Berlin (DE). In Berlin, the driver loads a truck full of goods and unloads them in Porto (PT). Does the driver need to obtain a posting certificate?
Yes, as the driver performed two separate bilateral operations and one cross-trade operation. The first bilateral operation started in PT (Member State of establishment) with the loading of the goods and ended in FR with the unloading of the goods. The second bilateral operation involved the loading of the goods in DE and the unloading of the goods in PT (State of establishment).
During the two bilateral operations the driver was not subject to the posting rules. The operation of loading the goods in FR and unloading them in DE was a cross-trade operation, not linked to either of the two bilateral operations. Therefore, the driver starts to be posted in FR after the end of the bilateral operation when he starts driving to the loading point to load the goods to be transported in the context of the cross-trade operations.
The posting in FR ends when the driver leaves French territory. Therefore, the driver is considered to be posted in DE, from the moment of entry into DE territory until the unloading of the goods in that Member State.
3. If I transit through French territory without loading or unloading, am I obliged to comply with the rules set out in the European Law on Posting?
No, because transit alone does not imply any obligation to detach.
4. What is the validity of the European Posting Certificate?
The European posting certificate, for each country, is valid for six months.
5. Do combined transport operations affect the impact of detachment?
Combined transport operations – the nature of the service on the initial or final road section is assessed based on the road route itself - that is to say, if this takes place exclusively within a Member State, or if it is a question of non-bilateral international transport or bilateral transport..
In the first two cases, the following apply rules on the secondment of drivers..
6. Does a driver who carries out cabotage need a certificate of detachment?
You need the certificate.
A driver carrying out cabotage operations,as defined by Regulations (EC) No 1072/2009 and (EC) No 1073/2009,, is considered as detached pursuant to Directive 96/71/EC..
7. Does passenger transport affect the impact of the disruption?
Notwithstanding Article 2, paragraph 1, of Directive 96/71/EC, a vehicle driver shall not be considered posted within the meaning of Directive 96/71/EC when carrying out bilateral passenger transport operations.
For the purposes of this Directive, a bilateral transport operation carried out in the context of an occasional or regular international passenger transport service, within the meaning of Regulation (EC) No 1073/2009, shall be considered to be such where a driver of a vehicle carries out one of the following operations: (a) picks up persons in the Member State of establishment and sets them down in another Member State or in a third country; (b) picks up persons in a Member State or in a third country and sets them down in the Member State of establishment; (c) picks up and sets down persons in the Member State of establishment for the purpose of local excursions in another Member State or in a third country, in accordance with Regulation (EC) No 1073/2009.
From 2 February 2022, the date from which drivers of vehicles are required, pursuant to Article 34(7) of Regulation (EU) No 165/2014, to manually record border crossing data, Member States shall apply the exemption for bilateral passenger transport operations provided for in the first and second paragraphs of this Article also where, in addition to carrying out a bilateral transport operation, the driver of a vehicle picks up and/or sets down persons in the Member States or third countries crossed, provided that he does not provide passenger transport services between two points in the Member State crossed. The same provisions shall also apply to the return journey.
The exemption for additional activities provided for in the third paragraph of this Article shall apply only until the date on which smart tachographs, compliant with the obligation to record border crossings and additional activities referred to in the first subparagraph of Article 8(1) of Regulation (EU) No 165/2014, must be installed in vehicles registered for the first time in a Member State, pursuant to the fourth subparagraph of Article 8(1) of that Regulation. From that date, the exemption for additional activities provided for in the third paragraph of this Article shall apply only to drivers of vehicles using vehicles equipped with smart tachographs, as provided for in Articles 8, 9 and 10 of that Regulation.
8. Is the certificate mandatory in all countries?
Yes, in all countries, as well as in the UK and Norway.
9. If I transit through French territory without loading or unloading, am I obliged to comply with the rules set out in the European Law on Posting?
This applies to all countries, not just France.
10. Do light vehicles require an EU detachment certificate?
No, however, they remain under the directive of national laws regarding secondment. For example, in France the Macron certificate is mandatory.
