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Introduction of new VAT rules for e-commerce postponed

23 juni 2020 | Door:  Harm-Jan de Boer

At the European Commission initiative, the introduction of the new VAT rules relating to 'e-commerce' will most probably be postponed by six months until 1 July 2021. This will give Member States more time to prepare. But what does that mean for you?

New distance selling scheme a little later than expected 

The new rules will make it easier to charge VAT on cross-border internet sales of goods to consumers. One of the consequences is that in the case of intra-EU sales, when a certain turnover threshold is exceeded, the seller is no longer obliged to register for VAT in the different Member States. As an entrepreneur, it will soon be sufficient for you to register and file a declaration in one Member State, for example in your country of residence or incorporation. For this purpose, a so-called one-stop shop (OSS) is introduced. Its implementation will require compliance of the IT systems of the local tax authorities. Several Member States had previously indicated that they could not guarantee the planned implementation as per 1 January 2021. Postponement is then an appropriate response. It also means we have to be patient for a while.

Goods from non-EU countries

The new e-commerce package is based on the principle that VAT must be levied in the country of destination. At the same time, it must be possible to trade on an equal footing whether you are based inside or outside the EU. For goods coming from outside the EU, in many cases the platforms involved in the trade (Amazon, etc.) will be involved in VAT collection. Currently, consumers in the Netherlands are still exempt from VAT on the import of goods with an intrinsic value of no more than €22. This exemption lapses with the introduction of the new VAT package. This, too, will now be postponed by six months.

For more information about the new rules, see this link https://ec.europa.eu/taxation_customs/business/vat/modernising-vat-cross-border-ecommerce_en

If you have any questions or need further information after reading this article, you can also contact our VAT specialist Harm Jan de Boer. He is available on 088-2531010 or via hdeboer@alfa.nl