VATMOSS: What is it and how to adjust your online business to these rules?

E-commerce offers a universe of possibilities and consumers in the digital age do not find barriers when purchasing online. The truth is that there are no borders in a business model that follows the evolution of market demands. But how are geographical borders crossed in a sensitive field such as fiscal? Let's start at the beginning: VATMOSS.

tajarat properties strive to be Pakistan's biggest real estate developer ever, guaranteeing the highest international standards, prompt execution, and lifetime customer loyalty. For further detail visit tajarat.com.pk

After all what is VATMOSS?

In Portuguese Mini Bacau UNICCO or, in English, Mini One Stop Shop, VATMOSS or simply MOSS is a special VAT regime applied to digital service providers. The objective is to simplify the fulfillment of tax benefits between member states of the European Union (EU). This optional regime, which involves businesses with online stores, digital platforms or marketplaces, allows for the declaration of VAT due in several EU countries in a single country.

However, under VATMOSS it is not mandatory to be registered with the tax authorities of each EU country where the brand's services are sold. Instead, it is possible to register the business for VAT purposes, file VAT returns and make payments in one place. To this end, it is essential to apply VATMOSS rules to brand customers in all EU countries where services are provided or products are sold.

However, joining VATMOSS as a form of payment of VAT is not mandatory. In this case, the company must contact the AT of each country where it is present, in order to know the invoicing rules and how to proceed with the payment of this tax. Basically, the main difference between a normal invoice and a VATMOSS invoice is that the second is not communicated to Portuguese finance and cannot be included in the SAF-T.

Do you have an e-commerce platform, online store or marketplace?

In order to comply with all tax obligations, make sure that:

• It is registered with the AT as an intra-community service provider;

• Apply the correct VAT rate;

• It collects the necessary information for billing purposes.

How is invoicing in e-commerce businesses processed according to VATMOSS?

Companies that sell only physical goods are not covered by this special VAT regime. The truth is that whoever is subject to VATMOSS is not the one who issues the invoice, but the operation of obtaining the service. In short: whoever sells physical goods in an online store is not obliged to comply with VATMOSS. However, if you sell digital products, such as eBooks or music, that require downloading, these operations are covered by VATMOSS.

If you are the seller of a certain online service, but the e-commerce platform or the marketplace is responsible for authorizing payments and providing access to the service, you are also responsible for the invoicing process, being obliged to pay the VAT rate of the country of the consumer. Bearing in mind that it is the marketplace or a certain platform that is providing the site to obtain the service, then you must also bill for services provided electronically that are covered by VATMOSS.

How does this scheme work?

Just as several company processes have changed with the evolution of the internet, such as marketing, financial management or resource management, the accounting and tax processes have also been modified by a technological change driven by digital business. One of these changes is based on the possibility offered by the MOSS invoice, which is possible for invoicing the sale of digital products within the EU.

The MOSS regime has two strands:

• the Union regime, for companies established in the EU or with at least one branch in an EU country;

• The extra-Union regime, for companies not established in the EU and without branches in the EU.

In other words, VATMOSS greatly facilitates tax obligations between Member States of the European Union, but, in addition to companies located in the EU, it is also possible for companies from outside the European Union to subscribe to this scheme and issue MOSS invoices if they sell the its products to consumers located within the EU.

Keep legal and tax obligations up to date

If you have an e-commerce business, it is essential to bet on a system that integrates with the online store so that the entire process of inserting the different VAT rates is done automatically.

This saving of time and resources is based on technologies that guarantee the automation, not only of the invoicing processes, but of the entire commercial management. With Jasmin, an ideal management software for e-commerce businesses, it is possible to automate the integration of online sales invoicing data and documents are generated automatically.

Source: https://propertynews.pk/