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BRUSSELS – The European Union’s VAT in the Digital Age (ViDA) reforms are set to expand the scope of the One-Stop Shop (OSS) VAT return system by July 2028, bringing significant changes for businesses involved in cross-border e-commerce and B2B stock movement. This extension will cut down the need for foreign VAT registrations and reduce the administrative burden for hundreds of thousands of companies operating across the EU.
The EU’s ViDA reforms, which aim to modernize VAT processes, will see the full implementation of the Single VAT Registration (SVR) starting in 2025, with a series of key milestones leading to the full launch by July 2028. The reform’s primary goal is to reduce VAT fraud and administrative complexity by simplifying VAT reporting across the EU.
In particular, the OSS system, which was introduced in 2021, will be expanded to cover new scenarios. These include cross-border movements of B2C and B2B goods, as well as stock movements within the EU. The extension is expected to significantly reduce the number of VAT registrations businesses need to maintain in multiple member states, resulting in considerable cost savings and enhanced efficiency.
Impact on E-Commerce and B2B Businesses
For e-commerce businesses, especially those involved in cross-border sales, the July 2028 OSS extension will be a game-changer. It will allow sellers to report VAT for B2C transactions and stock movements in a single, centralized return. This will streamline VAT compliance across multiple EU countries, saving time and reducing the administrative complexity associated with dealing with multiple tax authorities.
For B2B businesses, the extension will simplify VAT reporting on movements of their own stocks between EU member states. Additionally, the planned withdrawal of the “call-off stock” rule will impact businesses by aligning stock movements with OSS reporting, starting from 1 July 2027. This change is intended to eliminate the need for businesses to maintain separate VAT registrations in each EU country where they hold stock.
Government & Expert Reactions
The EU Commission has emphasized that the OSS expansion is part of a broader effort to improve VAT efficiency, reduce fraud, and enhance the digitalization of tax reporting. Experts agree that these reforms will simplify the VAT process for businesses, especially SMEs that previously struggled with the complexities of multiple VAT registrations.
The proposed harmonization of non-resident B2B domestic reverse charge rules is another key element of ViDA. While EU member states will be required to apply the reverse charge for non-resident suppliers, they will also have the flexibility to implement different rules based on their specific tax policies. This is expected to make VAT treatment for cross-border B2B transactions more predictable and uniform across the Union.
As the timeline for the OSS extension moves toward its July 2028 target, businesses are encouraged to prepare by familiarizing themselves with the upcoming changes. The EU’s Digital Reporting Requirements (DRR), including mandatory e-invoicing for intra-community transactions starting in 2030, will further shape VAT compliance in the coming years.
For businesses currently using the Import One-Stop Shop (IOSS), new reporting obligations will come into effect by March 2028, including more detailed information exchange between marketplaces, e-commerce merchants, and customs authorities. These changes will impact how VAT on imported goods is reported and secured against fraud.
The extension of the OSS system for B2C and B2B stock movements in July 2028 marks a significant step in simplifying cross-border VAT compliance within the EU. By reducing the need for multiple VAT registrations, the reform is expected to streamline operations for e-commerce businesses and B2B traders alike. As the EU moves toward a more digitalized VAT landscape, businesses should begin preparing for these changes to take full advantage of the efficiencies they bring.
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