One-Stop-Shop, non-Union scheme and VAT on e-Services
The One-Stop-Shop, non-Union scheme is the advancement of the VAT on e-Services scheme. It is a special arrangement in the field of VAT that is aimed at businesses that are not established in the EU. It enables registered businesses to transmit a single tax return centrally to the Member State of identification and to pay the resulting tax as a total sum for their sales carried out in the EU Member States that are covered by this special arrangement.
Entry into force
The regulations for the One-Stop-Shop, non-Union scheme will enter into force on July 01, 2021. Sales that fall within the scope of the special arrangement and are generated after June 30, 2021 can be reported by registered businesses for the first time in the context of the special arrangement for the assessment period that includes the third quarter of 2021. Pre-registrations for the special arrangement will be possible as early as April 01, 2021.
The special arrangement One-Stop-Shop, non-Union scheme replaces the previous scheme VAT on e-Services and offers an extended scope (see explanations in the "Group of Persons" section). The VAT on e-Services scheme can be used by registered businesses for sales that fall within the scope and were generated until June 30, 2021. Businesses who are already registered for the VAT on e-Services scheme do not need to register again for the One-Stop-Shop, non-Union scheme (see explanations in the "Registration and deregistration" section).
Group of Persons
The One-Stop-Shop, non-Union scheme is aimed at businesses that
- are not established in the European Union (EU)
and - are liable for payment of the tax as suppliers of services to individuals in an EU Member State against payment.
As opposed on this the scope of the VAT on e-Services scheme is restricted to telecommunications, radio and television broadcasting services or services supplied by electronic means.
Example:
A Swiss business that has not established its seat of economic activity and has no fixed establishment (for VAT purposes) in the EU supplies services to individuals in Germany, France and Austria where the supplies are taxable. This special arrangement enables it to register in any EU Member State for taxation purposes and to meet its tax obligations there (single-place registration).
Advantages of the Special Arrangement
The special arrangement enables businesses to declare sales, covered by the special arrangement, carried out in the EU Member States,
- in a single tax return,
- transmit this tax return centrally to the Member State of identification by electronic means and
- pay the resulting tax as a total sum.
Registration and deregistration
In order to participate in the special arrangement, businesses must apply for participation in an EU Member State of their choosing. In doing so, it must be noted that it is not permitted to be registered in more than one Member State at a time for this scheme. In Germany, participation in the special arrangement can be requested at the BZSt by electronic means. Participation is effective for all EU Member States.
Businesses who are already registered for the previous VAT on e-Services scheme will automatically participate (without having to register again) in the special arrangement One-Stop-Shop, non-Union scheme.
Businesses who are not yet registered can electronically request from the German Federal Central Tax Office (BZSt) to participate in the special arrangement as of April 01, 2021.
Detailed information can be found on the Electronic Data Transmission page.
Registration generally starts on the first day of the calendar quarter after the request is placed. Businesses should therefore be registered before they supply corresponding sales in the Community territory.
The BZStOnline portal (BOP) is available for applications.
The BZSt will upload the message regarding the completed processing of the registration notification to the inbox in the BZStOnline portal usually within five working days. This message will also contain the registration number allocated to the business registered for the scheme.
Businesses registered for the special arrangement can change their registration data, submit their tax returns, and deregister from the scheme in the BOP. Revocation of participation is generally possible, observing a revocation period of 15 days at the start of a new assessment period (calendar quarter) with effect from this period.
Duties
There are various duties associated with participating in the special arrangement. A few basic duties are explained below.
Timely submission of the tax return
In the special arrangement One-Stop-Shop, non-Union scheme (assessment periods as of 3rd quarter 2021) the tax return must be submitted electronically to the BZSt no later than the last day following the end of the assessment period (calendar quarter). This means that the tax return must be transmitted for:
1st calendar quarter by 30 April,
2nd calendar quarter by 31 July,
3rd calendar quarter by 31 October,
4th calendar quarter by 31 January of the following year.
In the previous special arrangement VAT on e-Services (assessment periods up to 2nd quarter 2021 inclusively) the tax return must be submitted no later than the 20th day following the end of the assessment period.
Even if no sales were carried out in the relevant calendar quarter, a tax return (“nil return”) must be submitted on the deadline stated.
On the tax return, enter the registration number and the assessment period, and separately for each Member State, in which services underlying the special arrangement have been supplied to non-businesses, the following information:
- Total sales (to non-businesses) without tax
- VAT type (standard / reduced)
- Tax rate
- Tax amount (calculated automatically)
- The total tax liability (calculated automatically) is also required.
- Corrections regarding previous assessment periods (not applicable to VAT on e-Services scheme).
The amounts must be specified in EUR. The uniform exchange rate determined by the European Central Bank on the last day of the assessment period applies when converting values in foreign currency. If no exchange rate was determined on that day, then the exchange rate of the next day applies.
Timely payment of the reported taxes
The tax amounts reported in the special arrangement One-Stop-Shop, non-Union scheme must be paid in a timely manner, so that the payment is received by the end of the month following the end of the assessment period (calendar quarter) by the relevant federal treasury.
In the previous special arrangement VAT on e-Services, the payment deadline is the 20th day following the end of the assessment period (calendar quarter).
Direct debiting is not possible. You can find additional information under the key point "Bank details."
Changing the Registration Data
The registered business must notify the BZSt of changes to its registration data by electronic means no later than the tenth day of the month that follows the month in which the circumstances changed.
In case details change, all updated registration data must be specified.
Registration data can be changed within three years following the effectiveness of deregistering from the special arrangement.
Under the "Form" section in the BZStOnline portal there is a special form available that must be used to report the updated registration data.
Deregistering from the Special Arrangement
The registered business must deregister from participating in the special arrangement on the 10th day of the month following the change, in the following cases:
- Discontinuation of the service
- Preconditions for participation cease to apply (establishment in the EU)
For the deregistering from the special regulation, there is a special form available under the "Form" section in the BZStOnline portal.
Even after deregistering from the special arrangement, a tax return needs to be filed for the assessment periods during which there was a registration. Due or incurred tax amounts must continue to be paid.
Record-keeping requirements
Records about sales carried out as part of the special arrangement must be kept in order to check the accuracy of tax returns and payments. The records must be provided by electronic means to the BZSt, the responsible German local tax office or the central competent authority of the other EU Member States on request. The retention period for the records is ten years.
Bank Details
The tax amounts declared in the One-Stop-Shop, non-Union scheme or VAT on e-Services scheme must be transferred to the following account.
Payee: Bundeskasse Trier Sonderkonto EU/UST
Bank name: Deutsche Bundesbank, Saarbrücken branch
BIC Code: MARKDEF1590
IBAN: DE81 5900 0000 0059 0010 20
The costs of the transaction are at the expense of the business ("our" charging scheme).
The reference number of the relevant tax return must be indicated as the payment reference. The format for this is "DE/registration number/assessment period as QN.YYYY".
Example of a reference number: DE/EU276999999/Q3.2021
Input tax
Input tax can be claimed only as part of the VAT refund process.
A condition for this case is that the tax for the services underlying the special arrangement have to have been paid and that the VAT amounts are associated with these sales.
The VAT refund(s) must be claimed in the Member State the input tax accrued in.
Further information can be found on the "VAT refund" page.
Background
The VAT on e-Services scheme will be replaced on July 01, 2021 by the One-Stop-Shop, non-Union scheme. The scope of the special arrangement includes in the new regulation all in the EU taxable services provided to private customers in the EU, and is therefore significantly expanded.
Under the special arrangement, businesses not established within the Community territory can opt for tax identification in a single Member State. This is a right of option. If a business uses this right, then it no longer has to register for VAT purposes in every EU Member State in which it supplies services that fall under the special arrangement to non-businesses (especially individuals) established in the EU. The business not established in the Community territory can rather choose one Member State in which it registers to participate in the special arrangement.
The services covered by the special arrangement are always subject to the VAT applicable in the Member State in which the non-business is established. This applies regardless of which Member State the business not established in the EU is registered in.
The BZSt is the competent authority for the special arrangement in Germany.
Notes on Brexit
Due to the Brexit agreements made between the European Union and the UK - Great Britain and Northern Ireland, the following must be noted for the special arrangement:
Submission of original tax returns:
Original tax returns showing turnover for the United Kingdom of Great Britain and Northern Ireland are to be submitted by January 20, 2021 for tax periods up to and including the fourth quarter of 2020.
According to the arrangements under the withdrawal agreement, the United Kingdom of Great Britain and Northern Ireland and the Member States will temporarily grant reciprocal access to the IT systems for tax returns submitted by January 31, 2021. For returns that are not submitted on this date at the latest, the special arrangement can no longer be used. Turnover that can no longer be reported under the special arragement must be reported directly in the UK, in accordance with the applicable tax laws there.
Submission of amended tax returns:
Turnover declared for the United Kingdom of Great Britain and Northern Ireland can be corrected subsequently in amended tax returns, provided that:
- the corrections are sent by no later than December 31, 2021 and
- the correction pertains to a tax return that you have submitted by no later than January 20, 2021.
Turnover reported for other member countries can be corrected even without meeting the above requirements. In this case, the turnover reported for the United Kingdom of Great Britain and Northern Ireland must be listed in the previous turnover amounts in the correction.
Payments:
Payments relating to the United Kingdom of Great Britain and Northern Ireland must be made by no later than January 20, 2021 for original tax returns relating to the fourth quarter of 2020.
According to the arrangements under the withdrawal agreement, the United Kingdom will temporarily grant the Member States the possibility to forward payments that are received by the Member States for original tax returns by January 31, 2021. Payments received by the federal treasury for original tax returns after January 31, 2021 can thus no longer be forwarded to the United Kingdom of Great Britain and Northern Ireland.
For amended tax returns, the payments must have been received by the federal treasury on December 31, 2021 at the latest. Payments received after December 31, 2021 can no longer be forwarded to the United Kingdom of Great Britain and Northern Ireland.
The arrangements made on the basis of the withdrawal agreement do not constitute a general deadline extension.
Questions & Answers
What are electronically supplied services?
An electronically supplied service is a service supplied via the internet or an electronic network, including networks for the transmission of digital content, and where, due to the nature of the service, the performance of the service relies heavily on information technology. This means that the service is essentially automated, involves minimal human intervention, and would not be possible without information technology.
The complete definition and further details can be found in Section 3a.12 of the Umsatzsteuer-Anwendungserlass (UStAE – German VAT Application Decree).
The sale of items is not an electronically supplied service, even if the order process is carried out electronically.
What are telecommunications services?
Other services in telecommunications are particularly the services with which it is possible to transfer signals, writing, images, sound or information over fixed networks, mobile networks, satellite or internet.
The complete definition and further details can be found in Section 3a.10 UStAE.
What are radio and television broadcasting services?
Radio and television broadcasting services are radio and television programs that are distributed based on a broadcasting schedule using communication networks such as a cable, antenna or satellite, by a provider whose responsibility is to serve the public through sound or image.
The complete definition and further details can be found in Section 3a.11 UStAE.
How can a business not established in the Community territory check whether the customer is a business or not?
A business established in the EU will want to provide documentary evidence of its business status to the supplier not established in the Community territory by specifying its VAT Registration Number (VAT REG NO).
When determining the tax status of its customer, the business participating in the special arrangement scheme has the opportunity to check the validity of both the VAT ID No. issued by the BZSt and the foreign VAT ID No. issued by the tax authorities of EU Member States. In addition, there is the possibility to check information, e.g. company name including legal form, place, postcode and streets, related to a VAT ID No. by making a so-called qualified confirmation enquiry. Further information on the confirmation procedure for businesses participating in the special arragement process can be found here.
The online form for performing the confirmation enquiry can be found here.
The validity of VAT ID No. can also be checked on the website of the European Commission. However, qualified confirmation enquiries cannot be carried out there.
Does the special arrangement apply even when services are supplied to businesses in the EU?
For using the special arrangement, it is not relevant if services covered by the special arrangement are also supplied to other businesses in the EU if they owe the VAT on those services in the respective Member State.
What are the VAT rates in the EU Member States?
The VAT rates of EU Member States can be found on the EU Commission’s website.
Can a registered business be excluded from the process?
Businesses that repeatedly fail to meet their obligations from participating in this process or that fail to do so in a timely manner will be excluded from this process by the BZSt. The same applies to businesses of which it can be assumed that sales will no longer be carried out as part of the special arrangement.
Where do I find the general EUR exchange rates of the European Central Bank (ECB)?
EUR exchange rates of the European Central Bank (ECB) can be found on their website.
What should be taken into account with regard to corrections/adjustments of tax returns?
If, in the special arrangement One-Stop-Shop, non-Union scheme (assessment periods from the third quarter of 2021), an already filed tax return must be adjusted, the correction must be made in one of the following tax returns. The tax return form includes a special section for corrections, which must be broken down there by assessment period and member state.
If the business has terminated their participation in the special arrangement and already filed the tax return for the last assessment period for which they were registered for the special arrangement, any necessary corrections must be directly reported to the affected EU member states.
If, in the previous scheme VAT on e-Services (assessment periods until the second quarter of 2021), an already filed tax return must be adjusted, the tax return form must be marked as an adjustment. The adjustment must report all sales (i.e. not just the adjusted sales) of the relevant assessment period with the correct values.
Tax returns may be adjusted by the participant in the special arrangement within a period of three years of the date on which the original tax return was due to be submitted.
Is it possible to offset resulting credit balances?
In the One-Stop-Shop, non-Union scheme, credits resulting from corrections are first offset within the tax return with the reported tax amount for the relevant member state. The credit remaining after the offset must then be reimbursed by the relevant member state to the business in question.
Example:
The business reports for the assessment period of the fourth quarter of 2021 taxes in the amount of 100 euros for member state X and in the amount of 20 euros for member state Y. In the same tax return, the business reports for the third quarter of 2021 a correction in the amount of -30 euros for member state X and in the amount of -80 euros for member state Y.
Following the adjustment, for member state X, there is a tax amount of 100 euros minus 30 euros = 70 euros.
With regard to member state Y, there is a reimbursement claim of 20 euros minus 80 euros = -60 euros.
In this simplified example, based on the tax return, the business has a payment obligation in the amount of 70 euros and a reimbursement claim toward member state Y in the amount of 60 euros.
In the VAT on e-Services scheme, the adjustment of a tax return can lead to a credit in favor of the business.
This credit cannot be offset with other payment obligations available in the VAT on e-Services special arrangement. This applies even if the credit and the payment obligation reference the same assessment period.
Example:
The business declares and pays tax for a certain assessment period in the amount of EUR 100.00 for Member State X and EUR 20.00 for Member State Y. At a later time, the taxable person determines that he mixed up the Member States and transmits an adjusted tax return, in which he declares tax in the amount of EUR 20.00 for Member State X and EUR 100.00 for Member State Y.
A claim for refund towards Member State X in the amount of EUR 80.00 as well as a payment obligation towards Member State Y in the amount of EUR 80.00 arises due to the tax return’s adjustment. In this case, the business must transfer the additional EUR 80.00 to the BZSt and receives a refund of EUR 80.00 from Member State X.
Where do I find contact details of the Member States?
The EU published the contact details of the Member States and further information regarding the special arrangement One-Stop-Shop on its website.
Contact
Bundeszentralamt für Steuern (Federal Central Tax Office)
One-Stop-Shop, non-Union scheme
Ludwig-Karl-Balzer-Allee 2
66740 Saarlouis
Phone:
+49 228 406-3804
Fax: +49 228 406-3801
Jurisdiction:
Value Added Tax
