VATupdate

Share this post on

New VAT rules for online purchases brought €1.9 billion in revenues for Member States in their first six months alone

A new Value-Added Tax (VAT) system for online shopping came into force on 1 July last year as part of efforts to ensure a more level playing field for all businesses, to simplify cross-border e-commerce and to introduce greater transparency for EU shoppers when it comes to pricing and consumer choice.

Preliminary figures released today show that the new measures delivered strong results in their first six months of operation, with Member States already collecting around €1.9 billion in  VAT revenues until end 2021, translating to €3.8 billion annually. However, available figures so far relate to only one facet of the new rules – those related to imported online shopping parcels valued at less than €150.

The figure includes €690 million in extra revenues related to parcels valued at less than €22. This is particularly significant given their high susceptibility to fraud under the previous VAT regime, when goods with a real value of over €22 were frequently undervalued to avail of a special VAT exemption.

Further statistics on the extra VAT revenues collected as a result of the remaining reforms, such as new rules applied to online sales within the EU and new obligations for online shopping platforms that store goods in warehouses in the EU, should become available in the coming weeks.

Over 8000 traders have now registered to use the electronic portal known as the ‘Import One-Stop Shop’ through which they can take care of VAT on all their online sales into the EU. Overall, EU customs handled around 500 million items covered by the new simplified dataset in the six months from July 2021, with 94% of them supplied by IOSS registered traders.

On 15 March, EU Finance Ministers adopted Council Conclusions welcoming the success of the new system and looking ahead to further action to improve the VAT framework, in particular through the forthcoming ‘VAT in the Digital Age legislative package, which should be adopted by the Commission later this year.

Source ec.europa.eu

Sponsors:

VAT news
VAT news

Advertisements:

  • vatcomsult