The new EU e-commerce VAT package aims to simplify VAT compliance for online sales to customers in the EU. But how do the rules affect Northern Ireland?
For instance, the new One Stop Shop (OSS) enables e-commerce businesses to account for intra-EU sales using a single OSS VAT registration. A recent EU note recently clarified that, according to EU policymakers, the OSS applies to Northern Ireland. That makes sense given the special trading conditions laid out by the Northern Ireland Protocol.
However, the situation is complicated because Northern Ireland VAT is administered by UK tax authorities. There has been some question as to how (and indeed whether) HMRC would roll out the OSS.
UK authorities now say they do not expect UK OSS registration (which would be applicable to Northern Ireland) to be ready by the EU’s 1 July 2021 deadline.
Northern Ireland OSS portal delays
In a policy paper, the UK government says that the OSS digital portal will likely be delayed and that further guidance will be forthcoming:
“It is not expected that the UK OSS registration portal will be fully implemented for the 1 July 2021 launch. Further guidance will be made available before 1 July 2021 for Northern Ireland businesses making supplies to the EU on what do if the UK OSS registration portal is not fully implemented in time.”
Why the delay could affect NI sellers
The new EU e-commerce rules specify where to register for the OSS. According to the rules, EU businesses must register in the country in which they are established.
Given the provisions of the Northern Ireland protocol, it stands to reason that Northern Irish businesses would plausibly have to register via the UK OSS.
NI companies involved in distance selling to customers in the EU should therefore seek expert VAT advice. Be sure to note the 1 July 2021 deadline.
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