The new ecommerce VAT regime: a not-so-simple tax simplification

On July 1, the new VAT legislation applicable to electronic commerce came into force , a law whose main objective is to overcome barriers to cross-border online sales, under the perspective of “a strategy for Europe’s digital single market”.

Through these new Directives on VAT in electronic commerce, the Value Added Tax continues to be settled at the place of delivery of the good when the threshold established by the standard is exceeded (now harmonized throughout the EU), however , the main novelty is that it will be possible to present a single declaration in the country of origin of the services , avoiding the administrative burden of having to obtain a VAT number in each country of dispatch of the goods sold.

Additionally, it is necessary to highlight the elimination of the thresholds established for each State with the consequent harmonization of the amount in 10,000 euros. That is, as long as the amount of the following transactions does not exceed the established amount, it is possible to pay taxes for these operations in a single State by applying the tax rate of the country where the goods were shipped. If this amount is exceeded, the applicable tax rate is that of the destination country.

Source eleconomista


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