On 30 September 2020, the Commission published Explanatory Notes on the new VAT e-commerce rules. They contain extensive explanations and clarifications on these new rules including practical examples on how to apply the rules if you are a supplier or an electronic interface (e.g. marketplace, platform) involved in e-commerce transactions. These explanatory notes are meant to help online businesses and in particular SMEs to understand their VAT obligations arising from cross-border supplies to consumers in the EU.
The Explanatory Notes will be accompanied by the update of the Guide to the One Stop Shop and by guidance in the customs field.
The Notes are heavily caveated as not being legally binding and only contain practical and informal guidance about how EU law should be applied and are not exhaustive.
The main changes are summarised in section 1.1 and are:
- Extension of the current Mini One Stop Shop (MOSS) to other B2C services, to intra-Community distance sales of goods as well as to certain domestic supplies of goods, creating a bigger One Stop Shop (OSS);
- New EU-wide threshold of EUR 10,000 threshold for intra-Community distance sales of goods, replacing the current thresholds;
- Special provisions under which a business facilitating supplies through the use of an online electronic interface is deemed for VAT purposes to have received and supplied the goods themselves (“deemed supplier”);
- Current exemption at importation of small consignments (LVCR) replaced with a special scheme for distance sales of goods imported from third territories or third countries of an intrinsic value not exceeding EUR 150 – Import One Stop Shop (IOSS);
- Simplification measures for distance sales of imported goods in consignments not exceeding EUR 150 where the IOSS is not used (special arrangements);
- New record-keeping requirements for businesses facilitating supplies of goods and services through the use of an electronic interface, including where the electronic interface is not a deemed supplier.