With the long announced reform, the EU Commission wants to facilitate cross-border (online) trade of EU businesses with private customers (B2C). For at present, the situation is rather complicated for traders and winegrowers, for example: A company based in Germany, for example, which sells and delivers goods online or by catalogue to private customers based in another EU country, must in principle collect the VAT of the country of destination, declare it in that country and pay it. This also applies to wine. A winegrower or wine merchant with private customers in other EU countries must therefore account for the VAT with possibly up to 26 different tax offices in several languages. The additional effort involved is considerable - according to the EU Commission, this results in costs averaging 8,000 euros per year per country. Clearly, this has so far deterred many shops and wineries from cross-border end-customer trade.
This is soon to change: From 1 July 2021, VAT for such deliveries can be settled at a single point of contact in one's own country, the so-called "One Stop Shop" (OSS). The procedure has already been used since 2015 as a "Mini One Stop Shop" (MOSS) for certain services, including digital services, and is said to work well. Now it will also be extended to "intra-Community distance sales of goods".
In concrete terms, a company registers once with the OSS and uses it to digitally settle the VAT for all other EU countries on a quarterly basis. The OSS then forwards the tax returns and payments to the respective EU countries. In addition, the obligation to issue invoices no longer applies to B2C deliveries. These are indeed significant simplifications.
The use of the OSS is voluntary. So anyone who only delivers to private customers in a single other EU country and is already registered for VAT there does not have to switch. Those who switch, on the other hand, must account for all B2C sales in other EU countries via the OSS. Now it is either - or: you cannot account for VAT in some EU countries yourself and for others via the OSS or distinguish between distance sales and services.
In Germany, the Federal Central Tax Office is responsible for the OSS. Businesses will be able to register on its online portal with their "Elster certificate" from 1 April 2021, and further information will be available in due time. Until then, the EU Commission's explanations - which are not legally binding - provide some clarity. Some of the examples described there can be applied to winegrowers and wine merchants:
Example 1: The vintner / wine trader sells wines - also via his own online shop - to private customers in other EU countries. If his total sales to private customers in other EU countries are below the new EU-wide threshold of 10,000 euros, he can charge German VAT and settle his accounts in Germany. The previous mail order threshold per country will be abolished on 30 June 2021. However, if these sales are above this amount, he must collect VAT at the rate of the respective country of destination and account for it in each of these countries - or once via the OSS. In any case, records of these sales / deliveries must be kept for ten years for control purposes.
Example 2: The winegrower / wine merchant sells wines to private customers in other EU countries via an online portal, platform or digital marketplace. They assist them in ordering and paying, for example, via forms provided. As long as the winegrower / wine merchant delivers the wines to the private customer himself (B2C), he remains responsible for VAT. Firstly, he must ensure that the portal or platform indicates and charges the VAT at the correct rate. To do this, he settles it himself in the respective destination countries or via the OSS. The tax liability is therefore not transferred to the portal or platform operator. However, the latter must also keep records of these sales and deliveries for ten years.
Example 3: The winegrower / wine merchant operates a portal or marketplace himself. He uses it to sell
a) his own wines to private customers in Germany
b) his own wines to private customers in other EU countries. He supports
c) other German winegrowers / wine merchants in their sales to private customers in Germany and other EU countries, and
d) Swiss winegrowers / wine merchants in their sales in the EU.
All wines in the warehouse at the company's headquarters are considered "own". It does not matter whether these are wines produced by the company itself, purchased via wholesalers or previously imported into the EU. The portal operator must account for VAT for sales under a) in Germany, for those under b) in each country of destination or via the OSS. For the sales under c), however, the VAT must be settled by the other German winegrowers / wine merchants. For sales and deliveries under d), i.e. from outside the EU, the portal operator becomes the so-called "fictitious supplier". He must account for the VAT in each country of destination himself or via the OSS. This also applies to deliveries to German private customers.
This means that cross-border end-customer trade in wine is indeed simpler thanks to the OSS. Under certain circumstances, however, the matter remains complicated: for example, the threshold mentioned in case 1 does not apply if the wines are delivered not only from Germany but also from another EU country. Winegrowers / wine merchants who, in addition to the end-customer wine trade, also provide cross-border B2C services in an EU country because they have another branch cannot even claim the OSS. This is because in the case of services, VAT must always be settled in the country of the branch office. Finally, the OSS only facilitates the settlement of VAT - the excise duties of the countries of destination must still be settled with the competent customs authorities.
Markus Blaser works as a freelance journalist and historian in Florence. The Swiss wrote for "Merum" until 2016 and publishes on the economic, political, cultural and historical background of wine and olive oil in Italy.