Schemes create one stop shop for VAT on EU trade

The schemes are:

  • Union
  • Non-Union
  • Import

The three schemes are designed to facilitate the collection of VAT by one European Union member state. This is then passed onto the member state in which the supply is deemed to take place.

The ‘Union’ scheme covers intra-EU supplies of goods and services. This is for businesses with their place of business or a fixed establishment within the EU.

The scheme will also allow a UK business to hold stock within the EU, such as the Netherlands. They will pay VAT for all EU sales to the relevant tax authorities.

In contrast, the ‘non-Union’ scheme covers supplies of services to EU customers by businesses with no establishment within the EU.

Finally, the third scheme, ‘import’ covers the distance sale of goods below €150 fulfilled from stock held outside the EU.

If businesses register for VAT using one of these schemes, they will complete one return for all EU sales, rather than being required to register for VAT in all member states in which their customers are based. These schemes will allow businesses to declare sales across all EU member states.

Samantha Bennett from Harvey, Telford & Bates comments on the schemes:

“The nature of your business will affect the scheme that applies to you. Whilst businesses will benefit from a substantial reduction in cross-border VAT compliance costs, we understand the potential complexities. If you require assistance in determining what scheme is right for you, we can help.”

For more information or guidance, please call us on 01743 462604 or email us at [email protected] and our team is on-hand to support you.

Please click here to the guide to the One Stop Shop (OSS)