What is the purpose of the VAT MOSS procedure?
The VAT MOSS procedure, namely the VAT mini one stop shop, applies to entrepreneurs carrying out business activities in the supply of telecommunications, television, and radio broadcasting services or the sale of digital services to non-taxable persons. The idea behind this system is to simplify VAT accounting procedures and allow businesses to avoid having to register for VAT in each EU Member State.
Functioning of the VAT OSS and VAT IOSS systems
The VAT MOSS mechanism in July 2021 was replaced by expanded systems with the following names: VAT OSS and VAT IOSS. These extend the operation of VAT MOSS and it means that the possibilities available in the former system have been retained. In addition, features to further simplify the VAT accounting process have been added. These changes notwithstanding, the VAT MOSS mechanism can still be used to correct registration information. This will be possible until the end of 2024.
How to correctly select the identification country?
It is very important when using the MOSS VAT system to use the correct country of identification, i.e. the EU country in which the operator has registered. This country must not be chosen at random, but in compliance with the applicable rules. The country of identification can be the place of business if it is located within the European Union. The same applies if the entity is established outside the EU, but also has permanent branches within the EU. A third possibility is applicable when a company is established outside the EU and at the same time has no offices in the EU. The VAT MOSS mechanism is then not applicable at all.
Methods of submitting VAT returns
Under the rules of the MOSS VAT mechanism, a registered entity submits VAT returns in the country of identification. Afterwards, all transactions carried out are accounted for across the EU and there is no need to charge VAT in each country separately. If an overpayment of VAT is identified, the amount due is refunded by the tax authorities of the countries involved in the transactions. In addition, a certain part of the amount due is paid by the tax authorities in the country of identification, resulting from the deduction of costs of an administrative type. This means that doing business in the European Union becomes easier and faster, regardless of the countries in which goods and services are sold.
Specialist tax consultancy support
The volatility of tax settlements makes it advisable to use the services of specialized firms dealing with a wide range of accounting services. An example of a recommendable office is INTERTAX, which provides tax advisory services for business. You can read more about tax mechanisms on the company’s website, including at: https://polishtax.com/what-is-vat-moss/ . By taking advantage of professional support, you can get effective assistance regardless of the specifics of your business activity.