The European Commission has published proposals for a new directive and regulation containing detailed rules introducing the VAT one-stop-shop for online sellers of goods to consumers in the EU, and making online marketplaces responsible for ensuring VAT is collected on goods sold on their platforms to EU consumers by non-EU companies.
In December 2017, the Council adopted the VAT e-commerce package, which provided for new rules on cross-border e-commerce intended to come into force in two main stages by January 2021. The first part of the package, taking effect from 1 January 2019, will allow businesses whose total supplies of digital services across the EU fall below a €10,000 threshold to apply the VAT rules of their home country, rather than those of the country where their customers are located. Non-EU businesses already registered for VAT will be allowed to use the ‘non-union’ VAT mini one-stop-shop (VAT MOSS) scheme to account for VAT on sales of digital services to EU member states.
The new proposal lays down technical implementation rules needed to support the next set of changes which will apply from 1 January 2021. These changes involve:
introducing special provisions for large online marketplaces, such that businesses operating electronic marketplaces or platforms will, in certain situations, be deemed for VAT purposes to be the supplier of goods sold to customers in the EU by companies using the marketplace or platform and will have to collect and pay the VAT on these sales; and
turning VAT MOSS into a one-stop-shop, by extending it to all types of services as well as to intra-community distance sales of goods and distance sales of goods imported from non-EU countries.
The one-stop-shop will:
extend the non-union scheme for supplies of telecommunications, broadcasting and electronic services by taxable persons not established in the EU to all types of cross-border services to final consumers in the EU;
extend the union scheme for intra-EU supplies of telecommunications, broadcasting and electronic services to all types of business-to-consumer services as well as to intra-EU distance sales of goods, in conjunction with the abolition of the current distance sales threshold;
create an import scheme covering distance sales of goods imported from third countries or territories to customers in the EU, up to a value of €150, under which the seller will charge and collect VAT at the point of sale to EU customers and declare and pay that VAT globally to the member state of identification in the one-stop-shop, resulting in a VAT exemption on import; and
lead to abolition of the current VAT exemption for goods in small consignments up to a value of €22.
The proposed amending directive ‘relating to distance sales of goods and certain domestic supplies of goods’ and amending regulation ‘as regards supplies of goods or services facilitated by electronic interfaces and the special schemes for taxable persons supplying services to non-taxable persons, making distance sales of goods and certain domestic supplies of goods’ are available on the Commission’s VAT for cross-border e-commerce page at bit.ly/2gLGO7a.
The European Commission has published proposals for a new directive and regulation containing detailed rules introducing the VAT one-stop-shop for online sellers of goods to consumers in the EU, and making online marketplaces responsible for ensuring VAT is collected on goods sold on their platforms to EU consumers by non-EU companies.
In December 2017, the Council adopted the VAT e-commerce package, which provided for new rules on cross-border e-commerce intended to come into force in two main stages by January 2021. The first part of the package, taking effect from 1 January 2019, will allow businesses whose total supplies of digital services across the EU fall below a €10,000 threshold to apply the VAT rules of their home country, rather than those of the country where their customers are located. Non-EU businesses already registered for VAT will be allowed to use the ‘non-union’ VAT mini one-stop-shop (VAT MOSS) scheme to account for VAT on sales of digital services to EU member states.
The new proposal lays down technical implementation rules needed to support the next set of changes which will apply from 1 January 2021. These changes involve:
introducing special provisions for large online marketplaces, such that businesses operating electronic marketplaces or platforms will, in certain situations, be deemed for VAT purposes to be the supplier of goods sold to customers in the EU by companies using the marketplace or platform and will have to collect and pay the VAT on these sales; and
turning VAT MOSS into a one-stop-shop, by extending it to all types of services as well as to intra-community distance sales of goods and distance sales of goods imported from non-EU countries.
The one-stop-shop will:
extend the non-union scheme for supplies of telecommunications, broadcasting and electronic services by taxable persons not established in the EU to all types of cross-border services to final consumers in the EU;
extend the union scheme for intra-EU supplies of telecommunications, broadcasting and electronic services to all types of business-to-consumer services as well as to intra-EU distance sales of goods, in conjunction with the abolition of the current distance sales threshold;
create an import scheme covering distance sales of goods imported from third countries or territories to customers in the EU, up to a value of €150, under which the seller will charge and collect VAT at the point of sale to EU customers and declare and pay that VAT globally to the member state of identification in the one-stop-shop, resulting in a VAT exemption on import; and
lead to abolition of the current VAT exemption for goods in small consignments up to a value of €22.
The proposed amending directive ‘relating to distance sales of goods and certain domestic supplies of goods’ and amending regulation ‘as regards supplies of goods or services facilitated by electronic interfaces and the special schemes for taxable persons supplying services to non-taxable persons, making distance sales of goods and certain domestic supplies of goods’ are available on the Commission’s VAT for cross-border e-commerce page at bit.ly/2gLGO7a.
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