April 15, 2021
The European Commission reports that EU member states are losing out on an estimated €7 billion ($8.38 billion) in VAT revenue each year as the boom in online shopping grows and low value goods, like inkjet cartridges, are exempt from VAT when imported into the EU. At the same time, this exemption is not available for sales of low value goods produced within the EU.
The current rules are now being modernised. From 1 July 2021, the new rules will impact everyone in the e-commerce supply chain, from online sellers and marketplaces/platforms both inside and outside the EU, to postal operators and couriers, customs and tax administrations, right through to consumers.
The justification for these changes is to overcome the barriers to cross-border online sales and address challenges arising from the VAT regimes for distance sales of goods and the importation of low value consignments.
One fundamental change is that online sellers, including online marketplaces/platforms, can register in one EU Member State. This will be valid for the declaration and payment of VAT on all distance sales of goods and cross-border supplies of services to customers within the EU. The EU envisages that there will be a reduction in red tape of up to 95% when registering with the new One Stop Shop (OSS).
The rules are being introduced to ensure that VAT is paid where consumption of goods takes place, enabling consumers to see public revenues increase – thanks to increased VAT payments and less VAT fraud, all Member States will benefit, the EU said.
Main changes at a glance:
Find out about the VAT changes, here.
You can find out more about the EU One Stop Shop (OSS) here.
You can find out more about the EU Import One Stop Shop (IOSS) here.
Categories : World Focus