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Are you ready for the new EU VAT rules for B2C e-commerce (effective 1st July 2021)?
May, 2021
Status: Open
The new Europen Union (EU) rules pertaining to value added tax (VAT) are due to come into force on 1st July 2021. The new rules will affect everyone in the e-commerce supply chain.
Specifically, the rules relate to cross-border business-to-consumer (B2C) e-commerce.
This includes
online buyers and sellers, marketplaces, platforms, as well as websites that facilitate trade of goods both inside and outside the EU. The new rules would also affect
postal operators and couriers, customs and tax administrations.
As with all regulatory changes, forward planning and preparedness are key to ensuring efficacious and timely compliance.
According to the EU policymakers, the new rules are designed to reduce
the barriers to cross-border online
sales. They are also intended to streamline the administration of VAT regimes for distance sales
of goods and for low-value imports.
Changes at a glance
- One Stop Shop (OSS) registration facility will allow online sellers of all types to register in any one of the EU Member States for their VAT administration for sales of goods and cross-border supply of services to customers within the EU.
- The existing thresholds for distance sales of goods within the EU will no longer apply, but will be replaced by a new EU-wide threshold of EUR 10 000 (ten thousand Euros). The exception to the latter will be telecommunications,
broadcasting and electronic goods and services.
- For VAT purposes, a new terminology is introduced for online marketplaces/platforms facilitating supplies of goods. They will be treated as recipients and suppliers of the goods themselves (“deemed supplier”).
- New record keeping rules will apply to online marketplaces/platforms facilitating supplies of goods and services.
- For imports, ALL goods imported into the EU will be subjected to VAT. However, a special scheme called the Import One Stop Shop (IOSS) will be established to simplify the VAT administartion pertaining to
distance sales of low-value goods imported from third territories or third countries. As an alternative to the IOSS, simplified measures for distance sales of imported goods of less than EUR 150 (one hundred and fifty Euros)
will be introduced.
More information
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is proactive in European framework programmes in a number of areas.
We do this to ensure that our clients receive up-to-date advice and services that are cognisant of
current and future developments in new technologies, business paradigms and the
EU's (and post-Brexit UK's) wider relationship with the rest of the world.
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