The new EU VAT e-commerce package – Implications for distance sellers

From 1 July 2021, the European Union’s (EU) e-commerce reform will be introduced, which will include the withdrawal of the current VAT distance selling regime.

The current regime allows businesses that sell goods to consumers (B2C) from one EU country, to charge the VAT rate of the country of dispatch until defined sales thresholds are exceeded. Once these thresholds are met in the country where the goods are delivered (typically €35,000 or €100,000), you (the seller) will have to register in that country and start charging the VAT rate of that country.

When the new VAT e-commerce package is introduced, the current thresholds will be replaced by a €10,000 EU wide sales threshold applicable to sellers established in the EU and a zero threshold for non-EU sellers.

To reduce the administrative burden and costs for sellers potentially required to VAT register in all 27 EU countries, the EU will introduce an the option to report all cross-border B2C distance sales in the form of a One-Stop-Shop (OSS) VAT return.

Source: fiscalsolutions.co.uk

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