EU VAT and B2C E-Commerce, the rules will change July 1, 2021 – Chapter 5 – Union scheme – Extension of the OSS

Extension to intra-EU distance sales of goods (B2C):

• Become systematically subject to VAT in the MS of the customer (where the transport ends – transport direct or indirectly paid by the supplier)
• Current thresholds of EUR 35K to 100K (per MS of destination) are removed => replaced by EUR 10K threshold (supplies to ALL MS)
• The OSS can be used to declare and pay VAT due in other MS
• No more mandatory invoice requirements for such sales

Above thresholds – How it works:

• VAT of jurisdiction of consumption applies and VAT accrues to jurisdiction of consumption
• Example: A German (DE) retailer sells goods via distance selling to consumer in other EU Member States
• Before July 1, 2021: DE retailer to register for VAT in all jurisdictions of consumption
• Simplified compliance: OSS in Member State of identification
• Single VAT reporting and VAT payment covering all countries where goods are sold

Below thresholds

• DE retailer to register for VAT in Germany
• German VAT applicable on all sales incl. to non-German consumers

See also

• Chapter 1 – Current VAT rules on Distance Sales of Goods (Before July 1, 2021)
• Chapter 2 – Legislative acts for the implementation of the new E-Commerce VAT rules
• Chapter 3 – Services: Improvements to the Mini One Stop Shop in 2019-2021
• Chapter 4 – New art. 33 in the EU VAT Directive 2006/112/EU – Place of Supply Rules for Distance Sales of Goods

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