VAT eCommerce Rules – 1 July 2021
Updated April 2021
Significant changes have been made to the Value-Added Tax (VAT) Directive to simplify VAT obligations as regards eCommerce activities.
Changes will enter into force from 1 July 2021.
These amendments will change the way VAT operates for cross-border business-to-consumer (B2C) e-commerce activities in the European Union (EU).
We recommend businesses affected by these changes to prepare for their impact as soon as possible.
The main changes that will enter into force from 1 July 2021 are as follows:
- Extension of the VAT Mini One Stop Shop (MOSS) to a One Stop Shop (OSS).
Currently VAT MOSS applies only to the supply of telecommunications, broadcasting and electronic (TBE) services. However, from 01 July 2021, the scope of VAT Mini One Stop Shop (VAT MOSS) will be improved and extended to allow the reporting of more supplies, turning it into a VAT One Stop Shop (OSS).
- The treatment of Online Marketplaces and Platforms as deemed suppliers for certain transactions.
Digital marketplaces – such as Amazon or EBay – will be deemed as supplier for VAT purposes for the supply of the goods facilitated on their platform. As such, the online platform will be responsible for accounting for the VAT on those supplies.
- Introduction of a new Import One Stop Shop (IOSS).
The current VAT exemption for goods in small consignments of a value of up to €22 will be abolished with effect from 1 July 2021. From this date, all goods imported into the EU will be subject to VAT, irrespective of their value. The customs duty exemption for goods of up to an intrinsic value of €150 which are imported into the EU will not change. A new Import One Stop Shop (IOSS) will be introduced to simplify the importation of low value goods into the EU.
- Introduction of Special Arrangements for certain imports of goods.
Special arrangements are being introduced for goods in consignments of an intrinsic value not exceeding €150, excluding goods subject to excise duty. These arrangements are designed in particular for postal operators, express carriers or other customs agents in the EU who typically declare low value goods for importation, either as direct or as indirect customs representatives.
Businesses eligible for the Union or non-Union schemes in the OSS or for the IOSS can pre-register from 1 April 2021. A new Tax and Duty Manual was recently published, which outlines the requirements for pre-registration for the OSS and IOSS from 1 April 2021. See further reading below
These changes may have commercial implications which need to be carefully considered. If you have any queries with regard to your own business, get in touch with Jamie O’Hanlon at firstname.lastname@example.org or call us on 0818 303 087.
- Revenue Guidance March 2021: VAT eCommerce – Registration for the One Stop Shop (OSS) and Import One Stop Shop (IOSS) from 1 April2021
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