Single VAT Registration: relief from administrative burdens

Single VAT Registration is one of the three core pillars of ViDA. Its aim is to reduce the need to register for VAT in several member states. Most of the measures take effect on 1 July 2028.

SVR consists of three elements for businesses trading across borders.

1. Extension of the One Stop Shop

The OSS, already used to declare VAT on cross-border B2C services and distance sales, is being extended considerably. From 1 July 2028 the scheme will cover more B2C transactions, such as supplies of goods with installation or assembly and supplies of gas, electricity, heating and cooling. It will also cover domestic B2C supplies of goods by a business not established in the member state of consumption.

This means that in more situations VAT can be declared and paid through the OSS return in the member state of identification, avoiding local registration obligations.

2. A new OSS scheme for transfers of own goods

At present, transferring own goods, for instance stock to a warehouse abroad, requires a VAT registration in the member state of arrival. To reduce that burden, a dedicated OSS simplification is being introduced.

The new scheme, effective from 1 July 2028, allows businesses to report transfers of their own goods through a monthly OSS return. The deemed intra-Community acquisition in the member state of arrival is then exempt with a right to deduct. A local registration for transfers is therefore no longer needed.

3. A mandatory B2B reverse charge

The SVR pillar also introduces a mandatory reverse charge for specific local B2B transactions, replacing the current mechanism, which is optional for member states.

The reverse charge becomes mandatory for supplies of goods and services where the supplier is not established in the member state in which the VAT is due and does not hold a VAT identification number there, provided the customer does hold one in that member state. This avoids a registration for the non-established supplier and produces a more uniform application across the EU.

Note that where a supplier is registered for VAT in the country concerned but not established there, this mandatory reverse charge does not apply. The member state may, however, provide in its own legislation that the reverse charge applies in that case too.

Points to watch

SVR is designed to lighten the administrative load, but there are important points to watch:

• No VAT refunds through OSS. The OSS does not provide for reclaiming input VAT paid in other member states. Businesses must continue to use the existing refund procedure, which can be slow and uncertain. That may lead businesses to keep local registrations after all, at odds with the purpose of SVR.
• Knowledge of local VAT rules. Businesses using the OSS still need to know the applicable rates, exemptions and rules in every member state of consumption in order to calculate and report the correct amounts.
• Deduction on transfers of own goods. The new OSS scheme excludes goods for which there is no full right of deduction in the member state of arrival. Local registration obligations therefore remain for those transactions.

SVR is an important step in modernising the European VAT system, but it still calls for a careful weighing of the pros and cons of optional schemes and for knowledge of local rules and refund procedures. We advise businesses to start exploring the opportunities and risks now.