Background
A taxable person can leave a scheme voluntarily (deregistration), or he can be excluded from the scheme by the Member State of identification. Similarly, an intermediary can cease to act as intermediary voluntarily or be deleted from the registry by the Member State of identification.
The taxable person is barred from using all three schemes (non-Union scheme, Union scheme and import scheme) for a certain period if he persistently fails to comply with the rules. Similarly, an intermediary is barred from acting as such if he persistently fails to comply with the rules of the import scheme. This period is called the quarantine period.
In order to deregister from the non-Union or the Union scheme, the taxable person is required to inform the Member State of identification at least 15 days before the end of the calendar quarter prior to that in which he intends to cease using the scheme. This means that if a taxable person wants to deregister from the scheme from 1 July, he must inform the Member State of identification by 15 June. In order to deregister from the import scheme, the taxable person (or the intermediary acting on his behalf) is required to inform the Member State of identification at least 15 days before the end of the month prior to that in which he intends to cease using the scheme.
Member States will implement their own processes for notification of the intention to deregister from a scheme, but it must be done electronically.
Once the taxable person has ceased using a scheme, obligations arising from supplies where VAT becomes chargeable after the date of cessation shall be discharged directly to the Member State(s) of consumption.
It is important to note that there is no blocking period for re-registration. The taxable person can register for the scheme he deregistered from at any moment provided that he fulfils the conditions to use the scheme.
An intermediary who wants to cease acting as intermediary in the import scheme has to inform his Member State of identification thereof. The Member State of identification will then delete the intermediary from the identification register. This deletion will be effective from the first day of the next calendar month. All the taxable persons he represents will consequently be excluded from the import scheme. Their exclusion will be effective from the first day of the month following the day on which the exclusion decision is sent to them electronically.
Those taxable persons can – if they fulfil the conditions – register directly for the import scheme or appoint another intermediary to be able to continue using this scheme.
If a taxable person
moves his place of business from one Member State to another, or
ceases to be established in the Member State of identification, or
ceases to have a stock of goods in the Member State of identification,
but wants to continue using the scheme, the taxable person will be required to deregister from the scheme in the current Member State of identification, and register for the scheme in another Member State (in the Member State he moved his place of business to, in a Member State in which he has another fixed establishment or in which he has a stock of goods).
In this instance, the date of deregistration from the former Member State of identification and that of registration in the new Member State of identification will be the date of the change (i.e. relocation of business to another Member State, closure of a fixed establishment in the Member State of identification; no stock held in Member State of identification anymore). There will be no quarantine period. However, the taxable person is required to inform both Member States (the old Member State of identification and the new Member State of identification) of the change no later than on the tenth day of the month following the change.
As an example, a taxable person has established his business in the Netherlands, and has registered for the Union scheme in the Netherlands from 1 January 2022. Following a restructuring, the place of business is moved to France on 21 March 2022. To continue to be able to use the Union scheme, the taxable person will be required to deregister from the Union scheme in the Netherlands, and register for the Union scheme in France. The date of deregistration in the Netherlands, and registration in France, is 21 March 2022. The taxable person has to inform both Member States of this change by 10 April 2022.
Failure to inform both Member States within this time period will result in the taxable person being required to register and account for the VAT in each Member State in which he has a customer with respect to his supplies made as of 21 March 2022.
The same procedure applies in case an intermediary moves his place of business from one Member State to another or moves his business outside the EU, but has a fixed establishment in a Member State. This instant change of Member State of identification is only possible for the intermediary himself, but not for the taxable persons he represents. These taxable persons will be excluded from the import scheme as from the first day of the month following the day on which the decision on exclusion is sent to them electronically. They are free to appoint the same intermediary (in a new Member State of identification) or another intermediary to continue using the import scheme. In both cases, the intermediary has to register each taxable person he represents for the import scheme and will receive a new IOSS VAT identification number for each of those taxable persons. They may also register directly if they do not need to appoint an intermediary to use the import scheme (i.e. if they are established in the EU or in a third country with which the Union has concluded an agreement on mutual assistance for the recovery of VAT).
If a taxable person moves his business establishment or fixed establishment from the Member State of identification to a third country and wants to continue using a special scheme, it will have an impact on his registration if he is using the Union scheme and/or the import scheme (EU => third country):
Union scheme:
The consequences depend on the supplies (goods or services) the taxable person carries out.
Services: If the taxable person is no longer established in the EU, he does not fulfil the conditions to use the Union scheme to declare supplies of services anymore. He will be excluded from the scheme. The exclusion will be effective from the first day of the calendar quarter following the day on which the exclusion decision has been sent. If he wants to continue using a special scheme to declare supplies of services, he has to register in the non-Union scheme in a Member State of his choice. The commencement date will be the first day of the following calendar quarter.
Goods: If the taxable person is no longer established in the EU, he can still use the Union scheme to declare intra-Community distance sales of goods, if these goods are stored in and dispatched or transported from a Member State to a customer in another Member State.
There are two possible scenarios:
The goods are dispatched or transported from the Member State that is the taxable person’s current Member State of identification. The taxable person can continue using the Union scheme in the same Member State of identification, but has to inform this Member State of the change of the place of business or fixed establishment by updating his registration information.
The goods are dispatched from another Member State than the current Member State of identification. The taxable person will be excluded from the Union scheme in his current Member State of identification. The exclusion will be effective from the first day of the calendar quarter following the day on which the exclusion decision has been sent. If he wants to continue using the Union scheme to declare intra-Community distance sales of goods, he has to register in a Member State from which he dispatches or transports goods. The commencement date will be the first day of the following calendar quarter.
Import scheme:
If the taxable person is no longer established in the EU or in a third country with which the EU has concluded an agreement on mutual assistance, he can continue using the import scheme, but has to appoint an intermediary for this purpose. The taxable person will be excluded from the current Member State of identification and the intermediary he has appointed will register him in the (new) Member State of identification. Note that the Member State of identification could possibly remain the same, but a new registration is necessary and a new IOSS VAT identification number will be attributed. The exclusion will be effective from the first day of the month following the day on which the exclusion decision has been sent. The taxable person can use the import scheme in the (new) Member State of identification as from the day he or his intermediary has been allocated an individual IOSS VAT identification number.
If the taxable person is no longer established in the EU or in a third country with which the EU has concluded an agreement on mutual assistance, but is already using the import scheme via an intermediary -although appointing an intermediary was not mandatory-, he can keep using the scheme but his intermediary has to update the registration information of the concerned taxable person accordingly.
If a taxable person moves his place of business or fixed establishment from a third country to a Member State and wants to continue using a special scheme, it will have an impact on his registration if he is using the non-Union, the Union or the import scheme (third country => EU):
Non-Union scheme:
The taxable person no longer fulfils the conditions to use the non-Union scheme to declare supplies of services, since he is now established in the EU. He will be deleted from the non-Union scheme and can register in the Union scheme to declare B2C supplies of services. The Member State in which he is established will be the Member State of identification. The exclusion from the non-Union scheme will be effective from the first day of the calendar quarter following the day on which the exclusion decision has been sent. The commencement date in the Union scheme will be the first day of the following calendar quarter.
Union scheme:
A taxable person who has been using the Union scheme to declare intra-Community distance sales of goods, can now use the Union scheme to declare B2C supplies of services as well. The Member State of identification will be the Member State in which he is established (place of business or fixed establishment).
If he has been using the Union scheme in the same Member State (Member State of identification) to which he has moved his place of business (or fixed establishment), he can continue using the scheme in this Member State, but has to update his registration information.
If he has been using the Union scheme in another Member State than the Member State to which he has moved his place of business (or fixed establishment), he does not fulfil the conditions to use this scheme in that Member State anymore and will be excluded. The exclusion will be effective from the first day of the calendar quarter following the day on which the exclusion decision has been sent. He can then register in the Member State in which he is now established. The commencement date will be the first day of the following calendar quarter.
Import scheme:
If the taxable person has been using the import scheme via an intermediary and wants to keep using the import scheme with the intermediary, nothing changes, but he has to update his registration details.
If the taxable person has been using the import scheme via an intermediary and wants to continue using the scheme without intermediary, he must ask his intermediary to deregister him from the import scheme and he can then register without intermediary in the Member State in which he is established. This applies even in case the Member State of identification would be be the same. The exclusion will be effective from the first day of the month following the day on which the exclusion decision has been sent. The commencement date in the (new) Member State of identification is the day he or his intermediary has been allocated an individual IOSS VAT identification number.
The place of supply of TBE services to non-taxable persons in other Member States is, in principle, in the Member State of the customer. However, to reduce the administrative burden for microbusinesses, a derogation to this principle has been introduced. The threshold applies since 1 January 2019 to TBE services and since 1 July 2021 to TBE services and intra-Community distance sales of goods (total sum of both types of supplies). This derogation provides that the place of supply of these services and goods is in the Member State of the supplier, provided that:
he is established or, in the absence of an establishment, has his permanent address or usually resides in only one Member State, and
the total value of these supplies does not exceed EUR 10 000 (exclusive of VAT) in the current and the preceding calendar year.
The supplier can opt to apply the Member State of the customer-rule though and will in this case be bound by this decision for two calendar years.
As soon as the threshold is exceeded, the place of supply will in any event be in the Member State of the customer (services)/in the Member State in which the transport of the goods ends (goods).
This means that taxable persons whose relevant supplies of services did not exceed the value of EUR 10 000 in 2020 can voluntarily deregister from the Union scheme in 2021. They are however not obliged to do so and can opt to apply the general place of supply rule and continue using the Union scheme, in particular if they expect that their turnover is going to exceed this threshold in 2021.
The threshold of EUR 10 000 is calculated as the sum of supplies of TBE services and intra-Community distance sales of goods and does not apply to goods and services separately. Furthermore, it only applies to taxable persons who are established in only one Member State.
These Member States should calculate the national value by applying the exchange rate published by the European Central Bank on 5 December 2017 (the date of adoption of Directive (EU) 2017/2455 which introduced this threshold).
Exclusion
A taxable person shall be excluded by the Member State of identification from the scheme he is using for any of the following reasons:
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He or his intermediary notifies that he no longer supplies goods and/or services falling under the scheme he is using;
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It may be assumed that his activities under the special scheme have ceased
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where he has made no supplies under the special scheme for 8 consecutive calendar quarters;
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He no longer meets the conditions necessary for using the scheme, for example:
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a taxable person using the non-Union scheme moves his business to a Member State or sets up a fixed establishment in a Member State;
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an intermediary who has been appointed by a taxable person to use the import scheme has notified that he no longer represents this taxable person.
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He persistently fails to comply with the rules relating to the scheme - this is defined as being so in at least the following cases:
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Reminders to submit a return have been sent to the taxable person (or his intermediary) for three immediately preceding return periods, and no VAT return has been submitted for the respective return period within 10 days after the reminder has been sent;
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Reminders to make a payment have been sent to the taxable person (or his intermediary) for three immediately preceding return periods, and the full amount has not been paid within 10 days of receiving each of these reminders, unless the outstanding amount for each return is less than EUR 100;
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Where the taxable person/his intermediary has failed to make his records electronically available to the Member State of identification within one month of the reminder by the Member State of identification.
If a taxable person is excluded from one scheme for persistent failure to comply with the rules, he will be excluded from all other schemes he is currently using and will not be able to register for any of the three schemes before the quarantine period has come to an end (see quarantine period below). If the taxable person is registered for another scheme in another Member State, that Member State of identification will have to exclude the taxable person for persistent failure as well. The exclusion is communicated by the Member State of identification to all other Member States without delay.
If a taxable person is excluded from the import scheme, his IOSS VAT identification number will remain valid for a period up to 2 months to allow the import of goods that were supplied prior to the date of exclusion. This does not apply in case the taxable person is excluded for persistent failure to comply with the rules of the import scheme. In this case, the IOSS VAT identification number is not valid anymore as from the day following that on which the exclusion decision is sent to the taxable person.
An intermediary is deleted from the identification register if
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for a period of two consecutive calendar quarters (6 months) he has not acted as intermediary on behalf of a taxable person making use of the import scheme or
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he no longer meets the conditions necessary for acting as intermediary (for example if the intermediary is no longer established within the EU) or
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he persistently fails to comply with the rules relating to the import scheme.
If an intermediary persistently fails to comply with the rules of the import scheme, he will be excluded from the identification register. The taxable persons he represents will consequently be excluded from the import scheme, because they are no longer represented by an intermediary and therefore do no longer fulfil the conditions to use the import scheme.
If a taxable person is aware of having appointed an intermediary who is not compliant, he can choose to appoint another intermediary.
Whilst any Member State can ask the Member State of identification to exclude a taxable person or to delete an intermediary from the register, only the Member State of identification can take the decision on whether or not to exclude. The taxable person or an intermediary can appeal the exclusion decision according to the national procedures that apply in the Member State of identification.
Date on which deregistration/exclusion becomes effective
Voluntary cessation
Where the taxable person voluntarily leaves the non-Union or the Union scheme, the cessation shall be effective from the first day of the next calendar quarter. The cessation is effective from the first day of the next month if the taxable person voluntarily leaves the import scheme. Supplies carried out as from that day cannot be declared in the import scheme anymore.
Where the intermediary voluntarily ceases to act as such, the deletion from the identification register is effective from the first day of the month following the deletion decision.
Exclusion for a) no longer carrying out supplies eligible for the scheme in use, b) no longer meeting the conditions to use the scheme, or c) for no longer having an intermediary in the import scheme
In these cases, the exclusion of the taxable person from the non-Union scheme or the Union scheme is effective from the first day of the calendar quarter following the day on which the decision on exclusion is sent by electronic means to the taxable person.
An exclusion from the import scheme is effective from the first day of the month following the day on which the decision on exclusion is sent by electronic means to the taxable person.
The deletion of an intermediary from the identification register for not having acted as such for two consecutive calendar quarters or for no longer meeting the conditions necessary to act as intermediary is effective from the first day of the month following the day on which the decision on deletion is sent by electronic means to the intermediary and the taxable persons he represents.
Deregistration (change of Member State of identification) for moving the place of business or the fixed establishment to another Member State (Union scheme, import scheme)
If the exclusion of a taxable person/intermediary is due to
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a change of the place of business or fixed establishment (Union scheme or import scheme) or
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a change of the place from which goods are dispatched or transported (only Union scheme),
it is effective from the date of that change provided the information about the change is communicated by the taxable person/intermediary to both Member States no later than the tenth day of the month following that change.
Exclusion for persistent failure to comply with the rules
Where the taxable person persistently fails to comply with the rules relating to the non-Union or the Union scheme, the exclusion shall be effective from the first day of the calendar quarter following the day on which the decision on exclusion was sent by electronic means to the taxable person.
The exclusion of a taxable person from the import scheme for persistent failure is effective from the day following that on which the decision on exclusion is sent by electronic means to the taxable person.
The deletion of an intermediary from the identification register for persistent failure to comply with the rules of the import scheme is effective from the day following that on which the decision on deletion is sent by electronic means to the intermediary and to the taxable persons he represents.
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EXCLUSION/DELETION - EFFECTIVE DATE |
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Taxable person in the Non-Union scheme |
Taxable person in the Union scheme |
Taxable person in the Import scheme |
Intermediary |
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Voluntary cessation |
First day of calendar quarter following notification |
First day of month following notification |
First day of month following notification |
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Exclusion (no longer any eligible supplies; conditions not fulfilled anymore; no intermediary anymore)
Intermediary (not acting as such for 6 months; conditions not fulfilled anymore) |
First day of calendar quarter following exclusion decision |
First day of month following exclusion decision |
First day of month following deletion decision |
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Moving place of business/fixed establishment to another Member State |
Not possible |
Date of that change |
Date of that change |
Date of that change |
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Persistent failure |
First day of calendar quarter |
First day |
First day |
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Quarantine period
The quarantine period is the period during which the taxable person is excluded from using any of the schemes of the One Stop Shop or during which the intermediary cannot act as such on behalf of a taxable person using the import scheme. A quarantine period only applies when
- the taxable person persistently fails to comply with the rules relating to a special scheme - there is a quarantine period of 2 years following the (quarterly/monthly) return period during which the taxable person was excluded. He will be excluded from all schemes he is currently using and will remain excluded from using any of the three schemes for 2 years. He can only (re)register for a scheme once the quarantine periods of all schemes have elapsed.
Example:
A taxable person has established his business in France. He uses the Union scheme and the import scheme (Member State of identification for both schemes is France).
He persistently fails to comply with the rules of the Union scheme and is therefore excluded from this scheme on 21 May 2024 (exclusion decision).
The exclusion from the Union scheme is effective on the first day of the calendar quarter following the exclusion decision, i.e. 1 July 2024. The quarantine period is 2 years following the return period (calendar quarter) during which the taxable person was excluded.
The quarantine period for the Union scheme is: 1 July 2024 – 30 June 2026.
The exclusion from the Union scheme for persistent failure triggers the exclusion from all other schemes and the taxable person cannot (re)register for any of the three schemes while he is quarantined.
Therefore he will also be excluded from the import scheme on 21 May 2024. The exclusion from the import scheme is effective from the first day following the exclusion decision, i.e. from 22 May 2024. The quarantine period is 2 years following the return period (month) during which the taxable person was excluded.
The quarantine period for the import scheme is 1 June 2024 – 31 May 2026.
The taxable person can (re)register for any of the schemes as soon as all quarantine periods have elapsed, i.e. as from 1 July 2026.
- the intermediary persistently fails to comply with the rules relating to the import scheme. There is a quarantine period of 2 years following the month during which he was deleted from the register. As a consequence, the taxable person(s) he represents will be excluded as well for not fulfilling the conditions to use the import scheme anymore. They can, however, reregister for the import scheme immediately if they fulfil the conditions to do so, i.e. directly if they are established in the EU or by appointing another intermediary.
Example:
A taxable person is registered as intermediary in Belgium. He persistently fails to comply with the rules relating to the import scheme and is excluded by his Member State of identification Belgium. The exclusion decision is sent to the intermediary and the taxable persons he represents on 6 April 2027.
The deletion of the intermediary from the identification register is effective from the day following that on which the decision on deletion is sent to the intermediary and to the taxable persons he represents, i.e. 7 April 2027.
The intermediary is not allowed to act as intermediary for 2 years following the month during which he was deleted from that register. The quarantine period is therefore 1 May 2027 – 30 April 2029.
The taxable person(s) the intermediary represented is excluded from the import scheme. His exclusion will be effective from the first day of the month following the day on which the exclusion decision has been sent. He can reregister via an intermediary to continue using the import scheme. The reregistration will be effective as from the day on which the new intermediary has been attributed the individual IOSS VAT identification number in respect of the taxable person he represents.
Note that a taxable person who is acting as intermediary and gets deleted from the identification register for persistent failure, is only deleted from this register. If he is using any of the special schemes himself, he will not get excluded from these schemes as a result of that persistent failure.