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Member State Access

VAT rules from 1 July 2021 to Cross-border VAT e-commerce. 

Life made simpler and fairer for all. 

Who is concerned? 

Everyone in the e-commerce supply chain is affected, 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.

Find out how! 

What changed? 

From 1 July 2021, the VAT rules on cross-border business-to-consumer (B2C) e-commerce activities changed. The rationale 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 for the importation of low value consignments. 

The main changes are the following: 

Online sellers

Online sellers, including online marketplaces/platforms can register in one EU Member State and this is 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.

They will benefit from a reduction in red tape of up to 95% by registering with the new One Stop Shop (OSS).

New EU-wide threshold of EUR 10 000

The previous thresholds for distance sales of goods within the EU have been abolished and replaced by a new EU-wide threshold of EUR 10 000. Below this EUR 10 000 threshold, supplies of TBE (telecommunications, broadcasting and electronic) services and distance sales of goods within the EU may remain subject to VAT in the Member State where the taxable person is established.

Online marketplaces

Online marketplaces/platforms facilitating supplies of goods are, in certain circumstances, deemed for VAT purposes to have received and supplied the goods themselves (“deemed supplier”).

New record keeping requirements

In addition, there are new record keeping requirements for online marketplaces/platforms that facilitate supplies of goods and services, including where such online marketplaces/platform are not a deemed supplier.

Vat exemptions

The VAT exemption at importation of small consignments of a value up to EUR 22 is removed. This means all goods imported in the EU are subject to VAT.

Two simplifications measures have been introduced to collect the VAT

The Import One Stop Shop (IOSS) has been created to simplify the declaration and payment of VAT for distance sales of low value goods not exceeding 150€ imported from third territories or third countries.  

Special arrangements for distance sales of imported goods in consignments not exceeding EUR 150 have been introduced where the IOSS is not used.

What transactions are covered? 

  • Distance sales of goods within the EU carried out by suppliers or deemed suppliers (electronic interfaces)

  • Domestic sales of goods by deemed suppliers (electronic interfaces)

  • Supplies of services by EU and non-EU sellers to consumers in the EU

  • Distance sales of goods imported from third territories or third countries carried out by suppliers and deemed suppliers, except for goods subject to excise duties

For more information, please see the explanatory notes (section 1.2)

The benefits are wide and varied 

  • When buying goods online from outside or inside the EU, Consumers know that the VAT rate applied is the same as for goods acquired in their home country as VAT is paid where consumption of goods takes place 

  • EU businesses can grow in a simplified, fairer environment and overcome the barriers to cross-border online sales - the European Digital Single Market aims to make technology work for people in a fair and competitive digital economy 

  • EU citizens can see public revenues increase - thanks to increased VAT payments and less VAT fraud, all Member States benefit