VAT special scheme (One Stop Shop)
The VAT special scheme, i.e. the Mini One Stop Shop expanded into the One Stop Shop scheme on 1 July 2021. The special schemes now cover all the services sold to private consumers in the EU and distance selling of goods to private consumers in the EU. The previous VAT special schemes have been available for the sales of telecommunications, broadcasting and electronic services to private consumers in the EU. Read more: EU value added tax reform to take effect – what is to be expected on 1 July 2021?
The words ‘EU country’, and ‘in the EU’ below are intended to mean the EU VAT territory. Read more about the EU VAT territory (in Finnish)
When can special schemes be used?
Companies can use VAT special schemes in international consumer sales. When you manage your company’s VAT obligations in a special scheme, you handle its value-added taxes in a centralised manner in a single EU Member State, i.e. you do not need to account for VAT separately with every country where you have buyers.
The special schemes cover all the services sold to private consumers in the EU and the distance sales of goods to consumers in the EU. The services sold can include passenger transport services, sales of tickets to events, and restaurant and meal services.
The currently existing special scheme for VAT consists of three parts: the Union scheme, the non-Union scheme and the import scheme:
The Union scheme covers all the services sold to consumers in the EU and the distance selling of goods to consumers in the EU.
You can use the Union scheme to file and pay VAT if:
1) Your company has its domicile or has a fixed establishment in the EU, and you sell services to private consumers in EU countries. Note: The special scheme requires that your customer, the consumer, is in an EU country where your company has no domicile or fixed establishment.
Example: A business enterprise is domiciled in Finland, and it sells services to private consumers in EU countries. For all its selling of services in EU countries other than Finland, the business enterprise can sign up for the Union scheme to file and pay value-added taxes.
However, if Finnish consumers are among the customers, the business enterprise cannot file and pay VAT through the Union scheme. Instead, the business must have a VAT registration with the Finnish Tax Administration and file and pay VAT on its sales of services, completing VAT returns in the usual way.
2) You have a company that conducts distance sales from one EU country to another. Goods are sold to private consumers. It is not necessary for your company to have its domicile or a fixed establishment in an EU country.
Example: A company is domiciled in Finland and makes distance sales of goods to EU consumers. Finland is the only country where this company sends goods off for delivery or dispatch. The company can register for the Union scheme and use it to file and pay VAT on the goods it has sold to private consumers and dispatched to EU countries other than Finland.
However, if the company were to sell goods to Finnish consumers in Finland, no VAT filing or VAT payment through the Union scheme is possible. Instead, the company must submit an application for VAT registration to the Finnish Tax Administration, and then begin to file and pay VAT on its sales of goods on regular VAT returns.
You can file and pay VAT through the non-Union scheme if:
- Your company has no domicile and no fixed establishment in the EU territory, and
- Your company sells services to private consumers in EU countries.
Example: A U.S. company, not established in any Member State of the EU, sells services to private consumers in EU countries. The U.S. company can sign up for the non-Union scheme to file and pay VAT.
You can file and pay VAT through the import scheme if:
- Your company has a domicile or a fixed establishment in the EU, and
- Your company makes distance sales of goods imported from outside the EU to private consumers, and the value of one consignment is at most €150.
Note: If your commercial operation with goods has to do with alcohol, soft drinks or tobacco products, i.e. goods subject to excise duty, you cannot file and pay VAT through the import scheme.
Example: A company domiciled in Finland sells goods to private consumers in the EU. The goods are sent to them from China. The company can sign up for the import scheme to file and pay VAT on its distance sales of goods imported from non-EU countries.
If the company is not established in the EU
The import scheme can also be used by a company that is not established in the EU. In most cases, such a company must appoint an intermediary that has a domicile or a fixed establishment in the EU. The intermediary attends to the obligations under the import scheme in the name of and on behalf of the company it represents. For example, the intermediary is separately liable for filing tax returns and paying taxes on behalf of each company it represents.
Example: A company is domiciled in China. It sells goods from China to private consumers in the EU. Because the company has no fixed or permanent establishment in the EU, it appoints an intermediary that is domiciled in Finland. The intermediary files and pays VAT, on the seller’s behalf, through the special scheme relating to the seller’s distance sales of goods imported from outside the EU.
The 10,000-euro annual threshold for sales of goods
A Finnish small business that is registered in the VAT register and that reports its sales to the Tax Administration with a VAT return can handle its sales paying Finnish VAT if the following requirements are met:
- The business sells telecommunications, broadcasting and electronic services, or goods through distance selling to private consumers in another EU country.
- The net sales figure excluding VAT for all goods and services sold to EU customers is below the threshold of €10,000 during the current calendar year. It is also required that the preceding calendar year’s figure was below threshold, too.
- The business is not treated as having a fixed establishment in any other EU country.
Even if the 10,000-euro threshold is not exceeded, the business can still sign up for the Union scheme. If the business files its sales in the special scheme, the sales are subject to the VAT rate of the Member State of consumption.
If the threshold of €10,000 a year is exceeded, the business has to either register for VAT in the consumer's country or start using the special scheme for VAT.
Example: A company is domiciled in Finland and makes distance sales of goods to EU consumers. It sells goods to consumers in Finland for a total of €10,000 per year, and to consumers of other EU countries for €9,000 per year. The company does not go over the 10,000-euro threshold, because the sales of goods to consumers in Finland are not counted towards the threshold.
As of the start date 1 July 2021, the threshold of net sales (€10,000) is inclusive of the selling of goods. However, the selling of telecommunications, broadcasting and electronic services has been included in the count towards the threshold ever since 1 January 2021. The reason for having the above sales of services included in the count from the beginning of 2021 is that the Union scheme has included them previously.
Why should you use the special scheme?
Using the special scheme is voluntary. If the seller does not register for the VAT special scheme, it will have to register for VAT in all the countries where consumers have purchased the seller’s goods or services covered by the special scheme.
- If the distance seller does not use the import scheme, the transport company can report and pay the VAT on the buyer’s behalf in line with the new Customs special procedure.
- If the import scheme or Customs special procedure is not used, Customs will collect VAT on goods imported by other than VAT-registered parties, for example goods imported by private individuals. Companies that have registered for VAT will report and pay VAT on their imports to the Tax Administration as a self-assessed tax.
A company can have only one Member State of identification in a special scheme at any one time. If the company wants to register for more than one special scheme, however, the Member State of identification can be a different EU Member State in different special schemes.
If the company registers for a special scheme, it must use the scheme for all the sales transactions covered by the scheme.
Instructions for registration, filing and paying
- How to apply for VAT special scheme registration
- Instructions for filing and paying VAT through special schemes